[Busmgrs] A message from ODE Communications: Sequestration Update

[WILTFONG Michael]

To: Superintendents, Principals, and Business Managers
Re: Sequestration Update

As promised, we wanted to provide an update on what we currently know about the impacts of the sequester on federal education funding.  Please note that this is all still subject to change and we will keep you updated as more information becomes available.

What are the program specific cuts?
The most recent numbers we have seen show cuts averaging around 5% to the following federally funded education programs. Numbers vary slightly (although not significantly) from those sent out in our last communication. This also provides additional detail on cuts to some of the smaller federal programs.  The following information was provided by the US Department of Education this week.

PROGRAM

FY 2013 at
FY 2012 Level


FY 2013
Less Reduction (averaging 5%)


Reduction

Title I Grants to Local Educational Agencies

155,776,434

145,339,020

10,437,414

School Turnaround Grants

5,762,843

5,474,701

288,142

Impact Aid Basic Support Payments

3,378,442

3,209,520

168,922

Improving Teacher Quality State Grants

23,673,143

22,337,255

1,335,888

21st Century Community Learning Centers

11,413,138

10,842,481

570,657

English Learner Education State Grants

7,668,179

7,397,256

270,923

IDEA Part B Grants to States*

128,760,236

122,388,011

6,372,225

Career and Technical Education State Grants***

13,452,227

12,410,066

1,042,161

Work-Study Grants

12,445,918

12,121,340

324,577


Notes:
Other grants not mentioned above include:
*         Rural and Low-income Schools
*         Mathematics and Science Partnerships
*         English Literacy and Civics Education
*         Education for Homeless Youth
*         Title 1 Migrant Ed
*         Title 1 Neglected and Delinquent
These programs will also receive reductions averaging around 5%.

*Assuming current funding allocations continued for the 2013-14 school year.

What do we know about how the sequester will relate to the federal education budget for the coming school year?
At this time, it seems most likely that a 2013 Continuing Resolution (CR) budget would be in place for the coming year. The CR budget would continue current 2013 funding at 2012 levels minus the 5% cuts from sequestration.  The numbers in the chart above represent Continuing Resolution with the sequester reductions and are our best guess as to federal funding levels for the coming school year (2013-14).  The U.S House passed its version of the CR budget on March 6, 2013. The U.S. Senate will likely take this up, and amend it, starting next week. Thus,   there is still a possibility the numbers in the chart could change and drop further.

When will these cuts take effect?
We have been informed that these cuts will affect funding starting with the 2013 appropriations. There will be no change in 2012 appropriations. This was confirmed this week in a message directly from Arne Duncan, so we don't anticipate a change to this timeline.

Will these cuts affect Maintenance of Effort?
No. Sequestration does not change the underlying statutory requirements that govern program operations, including within-State allocation requirements. There is no change in maintenance of effort requirements, supplement not supplant rules, hold-harmless requirements, or State or local reservations of funding for required activities.

How do the IDEA cuts impact FAPE?
Districts are still required to provide a free and appropriate public education (FAPE) to students with disabilities.  The IDEA funding reductions with therefore impact other areas of education funding so that districts can continue to provide the needed services.

Will sequestration affect school improvement funding for the coming year?
Funding for Title I-A school improvement comes from required set-asides within the State's Title I-A allocation.  With a potential reduction, as a result of sequestration, funds for school improvement could be affected.  It is too early to determine the exact impact sequestration will have on grants to Priority and Focus Schools.

Given all of this, how should I plan my budget?
Each district will need to consider its individual circumstances.
Since we don't know how the U.S. Senate may amend the Continuing Resolution, a conservative approach would be to plan for up to a 10% reduction in federal education funding (around 5% from the sequester and perhaps up to 5% from possible allocation reductions). Alternatively, you may wish to develop more than one set of budgeted numbers using different assumptions, e.g., one with a 5% cut from sequestration and one with up to 10% reductions, to provide you with information under more than one scenario.
We understand how difficult it is to plan a budget without all of the pertinent information and we will continue to provide updates on any new information regarding the impacts of the sequester.

If you have additional questions regarding sequestration and Title programs, please contact Russ Sweet at russ.sweet at state.or.us<mailto:russ.sweet at state.or.us> or 503-947-5638.

If you have additional questions relating to the IDEA cuts, please contact Steve Smith, Steve.W.Smith at state.or.us<mailto:Steve.W.Smith at state.or.us> or 503-947-5711.




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