research paper

School budget cuts and education in the U.S.

Aya Fujita

Ms. Clowser

EFLN 170

5 December 2011

Fujita 1

Table of Contents

I. Introduction― The situation of the budget cuts on campus had been caused by the 1

financial crisis since 2007.

II. The causes of the budget cuts problem

A. Rose up the default rate in housing and housing financial sectors 1

B. The Subprime loan problem 2

C. Strong relation between property tax and state revenue 3

III. The situation of the budgets cuts

A. Example: Washington state 3

IV. The effects in school and measure by the Federal government

A. Inferior quality of school program and services 4

B. Many teachers and faculty laid off 4

C. Fiscal policies by the Federal government 6

V. Conclusion－The cause-and-effect of budget cuts and what I learned 8

VI. Works Cited 9

VII. Appendix 11

Comment [C1]: Table of Contents

includes the Works Cited page and the

Appendix

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Aya Fujita

Ms. Clowser

EFLN 170

5 December 2011

School budget cuts and education in the U.S.

“We are 99 percent!” One day, I found a bunch of protesters by faculty the center of

campus. The teachers and staffs were screaming together with signs that said slogans and

placed blame. I felt it was weird and out of the ordinary. The budget cuts have caused

unemployment of faculty. Some campuses of the Cal State system reduced employed

lecturers 20 percent or more, though lecturers account for more than half

of all the faculty. Lecturers who have Ph.D are expected to specialize to teach their expert

field not research for themselves (Lum 6). The reason obviously is the financial crisis,

which began in 2007. As this crisis has deepened, state budgets especially education

spending has been squeezed more and more. How has the financial crisis affected the

education budget cuts in the U.S.? What problems has the budget cut caused in our

educational system? How did the federal and state government deal with the problem of

the budget cuts?

The causes of the budget cuts problem

At first, I describe the cause of the financial crisis, especially so-called Subprime loan

Comment [C2]: Color Coding =

Yellow – writers voice

Green – In-text citation information

Grey – Paraphrased source information

Pink – Direct quotes from sources

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problem. The end of prolonged run-up in residential real estate in 2007 triggered the crisis.

Ashok Bardhan explains how the crisis had spread out all over the U.S., a downturn in

housing prices led to rising foreclosures, then, enterprises government owned, private

investment banks and financial companies securitized their assets back according to

collapsing real estate (1). “CDO (collateralized debt obligations) and other issuance went

up from $20 billion in 2004 to $180 billion in late 2006. The national amount of

outstanding credit default swaps reached $69 trillion. Thus the whole financial sectors

including the credit market were getting nonfunctional and insolvent” (Bardhan 1). This

is the brief cause of the spread of the financial crisis. Why did the woes spread all over the

U.S. as well as around the world?

Secondly, I would like to clarify the linkage between the housing market and the U.S.

economy. Bardhan describes the U.S. housing market is significant and has played an

important role from a view of demographics; this sector is also bound up with housing

finance, global finance, and shadow banking system(2). Gregory Mankiw explains this

problem from the view of macroeconomics, the Federal government lowered interest

rates to historically lower levels after the recession in 2001, which made the borrowers

easier to get a mortgage and buy a home. It contributes to rising in housing prices (332).

This is why and how housing market is likely to be affected by the shock of the economic

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systems.

As a third cause for the budget cuts in every state, one big issue is housing tax for

revenue in states. In addition, education spending is different between each state in the

U.S. Alyson Klien, in her article "Recession's Toll On Education Budgets Proves Both

Widespread And Uneven", demonstrates about this, though educational spending usually

accounts for more than a half of their budgets, except only a few unscathed states, almost

of all have been struggling terrible fiscal damages to which complex and regional factors

contribute to the worst economic crisis. This great recession has been enormously

widespread all over the United States though there are some differences in degree. A few

states with more agricultural economies or energy based economies protected them from

the funding effects of economic downturn. In some states that bore the brunt of the

foreclosure crisis in the housing market, the economic situation is particularly dire,

including Arizona, California, Florida, and Nevada. The impact on pre-collegiate

education is due to the strong link between property taxes and school funding (19).

The situation of the budget cuts

Therefore, because of the financial crisis, which the subprime loan problem originally

caused, at least 46 states plus the District of Columbia have been struggling to close

budget shortfalls and the effects of the recession. Sean Cavanagh suggests examples of

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severe budget cuts. ”Washington state officials suspended programs to reduce class size

and provide professional development for teachers saving $78.5 million and to $15.6

million”(6). I construct the following paragraphs for three effects, the problem in schools,

unemployment, and fiscal policies by the Federal government.

The effects in school and measure by the Federal government

The budget cuts have directly affected school programs and services. Klien suggests

Nevada to be said as an example of severe effects by the budget. Nevada, which

experienced the biggest housing boom, is still suffering from squeezing revenue and has

already taken drastic action. Many districts had to cut after-school classes like art, music

and drama. McBride, Lawrence, and Braun provide us some board members’ opinion.

They have removed the transportation and custodian services in a school in Michigan. A

school located in a valley is struggling significantly with decreases in enrollment, because

of higher gas prices and more leaving families in Idaho (13). Students and their family

also have to bear higher tuition. In Michigan, the education funding had run up from $154

to $7162 per student (Klien 17). A student at a California State University says her tuition

fees have skyrocketed more than 50 percent from her freshman year up to $4840 (Lum 8).

The other serious effect is many teachers and faculties have been laid off in many states.

The largest district in Nevada laid off more than 500 school employees in 2010 (Klien 18).

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Lum describes the situation in California, three higher education institutions, University

of California, California State University and California Community College have laid

off stuff, cut faculty pay and reduced the number of courses offered. Cal State University

employed less than 2100 lecturers, which accounts for 16 percent less (7). I took the

survey for 30 California State University Chico students about consciousness for this

problem. The following chart shows the results of the survey questionnaire.

(Fujita, Aya, 2011)

According to Table 1, first of all, in the question 1 and 3, ”The budget cuts have affected

your decision for your course” and “The courses and faculties in your department have

been getting less,” more than half of students agreed with these statements. This indicates

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1 Q2 Q3 Q4

5

18

14 12

11

8

9 13 7

3

3

4 5

1

2

1 2 0

2 0

Strongly Disagree

Disagree

Not Sure

Agree

Strongly Agree

Table 1

Comment [C3]: Table 1 correctly

introduced, labeled , and cited.

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the number of courses and faculties have decreased, which caused their decision for

courses. Moreover, 86.6% of the students agreed with the question 2 “You feel some

decrease in quality of programs and services”. Thirdly, we can see clearly most students

in California feel their “state has been damaged seriously” because of the crisis.

Though education differs from state to state, even district to district, the Federal

government cannot leave burgeoning unemployment alone without taking

countermeasures.

Finally, I illustrate the fiscal policies of the Federal government took place as the third

effect. Cindin and Leo suggest a fiscal stimulus by the Bush Administration’s Keynesian

turn of a $150 billion. It is evaluated that this has stimulated at the Federal level, but not

been done at the state level due to their massive dependence on property taxes.(28)

In comparison to the fiscal policy by Bush Administration, Cavanagh discusses about

the ARRA by the Obama Administration,

The financial duress would almost certainly have been much worse had it

not been for an unprecedented infusion of emergency federal aid over the

past two years, most notably some $100 billion in education funding

through the American Recovery and Reinvestment Act, the $787 billion

economic-stimulus package passed by Congress in 2009 at the urging of

Comment [C4]: This paragraph is an

explanation of the content of the Chart.

Comment [C5]: Block Quote (Long

quote) Ten space indentation.

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President Barack Obama (7).

Due to the variance in need, the government has to weigh the amount each state and

district needs from this act. According to the Chart.2 from my survey, the surveyed

students’ opinions were split over government policy. 40 percent of the surveyed students

agreed with the statement, “The government should provide more subsidies for each state

even though our taxes will go up,” but 27 percent disagreed with the statement.

(Fujita, Aya, 2011)

Conclusion: the cause-and-effect of budget cuts and what I learned

In summary, the Subprime loan problem and housing collapse triggered the financial

Strongly Agree

20%

Agree

20%

Not Sure

33%

Disagree

17%

Strongly

Disagree

10%

Q5: The government should provide more subsidies for each state

even though our taxes will go up.

Table 2

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crisis and serious recession that has spread across the U.S. since 2007. The property tax

represents an important part in state revenue. The default problem has squeezed the state

budget. During this time of crisis, the education budget has been reduced, which has

caused many serious problems. Some notable effects of the budget cuts are less courses,

extracurricular activities and higher tuition. The dismissal of many teachers and faculty is

another more serious issue. Many professors who have Ph.D lost their position. The

Federal government proposed policies and put the ARRA in effect as protective measures.

They should have acted earlier to prevent some of the serious effects that we are

experiencing now such as reduced faculty and less courses. Additionally, the government

should consider the need state by state.

I read many articles, books related with the financial crisis and the educational system

in the U.S. in order to deepen the comprehension of the cause and effect of this problem.

All of the processes to complete this research paper became a good experience for me.

Also, I understand how the budget cuts problem is serious because it has caused various

effects on many lives of students and faculty. I hope this situation would get better soon at

least before the faculty’s anger reach the peak ‘100 percent’.

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Works Cited

Bardhan, Ashok. "Housing And The Financial Crisis In The US: Cause Or Symptom?"

Vikalpa: The Journal For Decision Makers 34.3 (2009): 1-7. Business Source

Premier.Web.26.Oct.2011.

Cavanagh, Sean. “Educators Regroup In Recession’s Aftermath”. Education Week,

Vol.30 Issue 16, p6-10, 5p, 13.Jan.2011. Academic Search Premier, EBSCO. 19

Oct.2011

Cindin, Sam, and Leo Panitch. "Perspectives On The U.S. Financial Crisis." Canadian

Dimension 42.4 (2008): 28-31. Academic Search Premier. Web. 6 Dec. 2011.

Fujita, Aya. Personal Survey. Nov. 2011.

Klien, Alyson. "Recession's Toll On Education Budgets Proves Both Widespread and

Uneven." Education Week 30.16 (2011): 16-19. Academic Search Premier. Web.

24Oct.2011

Lum, Lydia. "A Cut Below." Diverse: Issues In Higher Education 26.25 (2010): 6-9.

Academic Search Premier. Web. 7 Nov. 2011.

Mankiw, Gregory, N. Macroeconomics. New York: Worth Publisher, 2009.

McBride, Linda L., Robert Lawrence, and Randal Braun. "Budget-Cutting Season Is

Upon Us." American School Board Journal 195.7 (2008): 12-13. Academic

Comment [C6]: Works Cited starts on its

own page. Title of Works Cited is

centered one inch down from the top.

Comment [C7]: All Source entries are

listed Alphabetically by authors last

name or title of Article, if there was no

author named.

Comment [C8]: NOTICE: You must cite

your Survey in your Works Cited page.

You are the “author”. ; )

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SearchPremier.Web.1Nov.2011.

Appendix

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Table.1,

Table.2

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1 Q2 Q3 Q4

5

18

14 12

11

8

9 13 7

3

3

4 5

1

2

1 2 0

2 0

Strongly Disagree

Disagree

Not Sure

Agree

Strongly Agree

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Strongly Agree

20%

Agree

20%

Not Sure

33%

Disagree

17%

Strongly

Disagree

10%

Q5: The government should provide more subsidies for each

state even though our taxes will go up.