Issue Brief: Impact of Sequestration on Education Funding

Yesterday, Whiteboard Advisors had the opportunity to participate in a briefing call with U.S. Secretaryof Education, Arne Duncan, regarding the potential for fiscal sequestration, and its potential impact onstate and local education agencies.

K12 education funds will face the full force of the cuts in July, when the U.S. Department of Education transmits funding to the states and districts for disbursement. The across‰-the‰-board, 5.1% cut applies to every federalaccount (Title I, IDEA, Head Start, Perkins, etc.) at the national level, excluding school nutrition and PellGrants. After applying the cut, The U.S. Department of Education calculates the distribution as it normallywould, meaning that a state and district with dipping demographic census data stands to lose more than 5.1%. This, for states like Maryland, is even worse news. K12 districts that rely on Impact Aid (those with military children and who share land with national parks) stand to lose 5.1% (or whatever the final number turns out to be) of that federal support immediately. It is immediate because the cut applies to fiscal year 2013 funds which, on the federal budget cycle, began last October.

For additional background and information, see our attached Issue Brief.