In December of 2008, I was asked by the Association of School Business Officials, International (ASBO) to represent California school business officials at an economic crisis summit in Washington, D.C. More than twenty school business officials from across the United States and Canada convened for two days to consider the ramifications of the current economic crisis and contemplate what the future of public education funding may look like as a result. Our two days of brainstorming has been published in a document entitled “Economic Crisis Summit: A New Future for Education Funding,” posted on the ASBO web site.
What I learned at the summit was that the depth and breadth of this recession would be like no other. The summit’s report states that: “This recession will likely prove to be a watershed moment. Many areas will undergo changes not seen since the post-World War ii era and the start of the 1970s post-industrial economy. The public education system will not be immune to these changes. The nature of this recession is such that you will not be able to wait it out. Current projections suggest that the technical end of the recession will be in the first quarter of 2010. It will take much longer for property tax and sales tax to rebound.” What I couldn’t have known then is what I know now; that this forecast was frightfully accurate—at least for California.
After grappling with multi-billion budget deficits in each of the last three years, the “golden state” still clings to a $25 billion budget deficit, remains the victim of a devalued housing market and boasts the third highest unemployment rate in the nation. California has lost 1.3 million jobs since the employment peak, and is not expected to see employment at pre-recession levels until 2016—eight years from the beginning of the great recession.
There is a glimmer of good news on the horizon, however. The University of California at Los Angeles, (UCLA) Economic Forecast predicts that California is poised for economic recovery, with the education, health care, exports and technology sectors leading the way. However, whereas coastal cities, like Santa Barbara, are expected to thrive, the forecast is that the interior of the state--areas that were hit particularly hard during the sub prime mortgage meltdown—will continue to struggle.
While it is true that we don’t know when an economic recovery will take place, or the speed at which it will occur, we do know that ultimately there will be a recovery. Armed with this knowledge, we also know that when the recovery comes, there will be immense pressure from labor to increase compensation, as well as from our communities to restore programs cut during the great recession. It is imperative that we are not caught flat footed when this pressure emerges, and that we have a plan to deal with this post-recession reality. This plan should not only identify which programs should be restored, but indicate which ones should be permanently abandoned. It should balance labor demands with program restorations, and the plan should be developed and board-approved in advance of the economic recovery. As school business officials, it is incumbent on us to keep all stakeholders informed--both during and after an economic crisis.