WASHINGTON — State and local schools are bracing for the impact when the money they received from the stimulus package comes to an end next year.
Public schools have shed nearly 58,000 teachers and other education workers this year because the economy has not recovered quickly enough, despite the influx of cash some districts received from the American Recovery and Reinvestment Act.
According to the Labor Department’s September employment report, out of the 83,000 government jobs lost, 76,000 local positions were cut, the largest reduction in 28 years.
The spike in the September numbers reflects the layoffs that took place when schools ended in spring.
After scrambling with a budget squeeze in the early years in downturn, states have turned to the last resort: firing education workers. Without another influx of money, either from another stimulus package or an upturn in state coffers, the layoffs are likely to continue.
“[The loss of teachers] signals that there’s a massive problem,” said Heidi Shierholz, an economist with the Economic Policy Institute, in a phone interview.
At least 48 states struggled with budget shortfalls for fiscal year 2010, totaling $191 billion or 29 percent of state budgets — the largest gaps on record. Most states managed by cutting spending and increasing taxes, according to the Center on Budget and Policy Priorities’ report.
Prince George’s County in Maryland laid off 115 school employees for fiscal 2011 and cut an additional 435 positions out of 9,000 positions, excluding teachers, according to Darrel Pressley, the county’s spokesperson.
“I’m hopeful that there will be some additional funding either coming from the state or nationally, right now we’re trying to determine what the financial needs are for fiscal 2012,” Pressley said.
Economists expect more cuts before next September, unless Congress approves another economic stimulation package.
The White House has been on the stump recently to tout what would have happened without the stimulus package, and presumably to begin making the case for another infusion of cash into the still-struggling U.S. economy.
Last week, President Barack Obama stressed the effectiveness of the stimulus on the labor markets.
“These continuing layoffs by state and local governments would’ve been even worse without the federal help that we provided to states over the last 20 months,” Obama said after touring a small business in Bladensburg, Md.
The federal aid provided to states undoubtedly eased tight budgets, but only $60 billion remains to help with 2011 fiscal problems and just$6 billion will be left for fiscal 2012, the Center on Budget and Policy Priorities reported.
With the Federal Reserve’s short-term rates at near zero, officials will decide at the Fed’s Nov. 2-3 meeting whether to buy more government debt in order to lower the interest rates for mortgages and other loans, which could pump more consumer spending into the economy