On July 25, 2012, the Texas Education Agency announced that the U.S. Department of Education had released guidance to states clarifying that the 2013-14 school year, rather than the 2012-13 school year (as announced in May 2012), would be most affected by sequestration, a provision of the Budget Control Act of 2011 that could result in $4.1 billion in across-the-board cuts to federal education spending if Congress fails to develop a deficit reduction plan by Jan. 2, 2013.

The July 20, 2012, USDE guidance states: “Assuming Congress enacts a 2013 appropriations bill that is structured similarly to the pending House or Senate bills – a reasonable assumption based on past practice – there is no reason to believe that a sequestration would affect funding for the 2012-13 school year.”

Concern over preemptive cuts for 2012-13

Given the severity of the cuts that could occur in 2013-14 due to sequestration, the July 2012 USDE guidance notes that administrators in some school districts might be tempted to make funding cuts during the upcoming 2012-13 school year in preparation for the sequestration-related cuts of 2013-14.

However, the USDE states that federal funds have already been appropriated for and will be provided for 2012-13 and stresses that the potential for sequestration “should not upset planning and hiring decisions” for 2012-13.

Impact Aid would be affected in 2012-13

One program that would feel the impact of the cuts as soon as 2012-13, however, is the $1.2 billion Impact Aid program. Due to the timing of when this program awards funds, the 1,192 districts across the nation that receive Impact Aid funds could experience more significant short-term funding problems due to sequestration than other districts, according to the USDE.

Texas receives a large share – $101 million – of the Impact Aid program’s Basic Support funds, according to data published in March 2012 by the Federal Education Budget Project. Impact Aid funds, which are distributed directly to districts rather than via state agencies such as TEA, compensate districts that contain federally owned, tax-exempt lands, and educate “federally connected” students, such as the children of military personnel serving at nearby bases and students with disabilities.

What the 2013-14 cuts could mean for schools

The Congressional Budget Office projects that sequestration would reduce programs by 7.8 percent in 2013-14. For Texas, this would mean that all federal grants that the Texas Education Agency administers may be reduced by 8 to 14 percent. The USDE estimates that the following programs would be at risk:

  • Title I funding would be reduced by $1.1 billion as of fall 2013, cutting funding to more than 4,000 schools that serve approximately 1.8 million disadvantaged students. Without state or local monies to replace these lost funds, districts could have to cut the jobs of more than 15,000 teachers and aides across the country. This would result in students losing access to individual instruction, after-school programs and other interventions.
  • Funding for special education would be reduced by $900 million as of fall 2013. This could result in the loss of more than 10,000 jobs held by teachers, aides and other staff who provide essential instruction and other support to 6.6 million children with disabilities across the U.S.

Will sequestration really happen?

When lawmakers added the sequestration proviso to the Budget Control Act of 2011, they did not intend for it to be implemented. It was a measure intended to force Congress to develop a $1.2 trillion deficit reduction plan by January 2013.

However, the congressional committee charged with developing the deficit reduction plan announced in November 2011 that it could not reach agreement. While Congress has until Jan. 2, 2013, to act, if it doesn’t send the president a balanced deficit reduction plan that does away with sequestration by that deadline, the cuts will take effect.

“Essentially, we’re playing chicken with the lives of the American people – our schools, communities, small business, farms, public safety, infrastructure and national security,” said U.S. Secretary of Education Arne Duncan in his July 25, 2012, testimony before a U.S. Senate subcommittee. “If we don’t work together to solve this problem, it further erodes what little faith remains in our elected leadership to put partisan politics aside and do the right thing for children and families.”