As The Advocate recently reported, Louisiana public school officials are worried about the prospect of the first cut in state aid in decades. It’s a distinct possibility because of the state’s looming budget crisis, which Gov. John Bel Edwards and lawmakers will address in a special session next month. The state is grappling with a shortfall of up to $750 million between now and June 30 — and another $1.9 billion shortfall for the fiscal year that begins on July 1.
Much of that red ink can be traced to the failed budget policies of former Gov. Bobby Jindal, as well as the lawmakers who agreed to his no-new-taxes absolutism.
But the budget picture has been complicated by the plummeting price of oil, which means less revenue for state coffers. That misery is being shared in other energy states, with potentially profound consequences for public school systems, according to a recent story in Education Week, a national journal for educators.
“During the energy boom of the last decade, when a barrel of oil cost close to $100, school administrators in energy-producing states built football fields and gleaming new schools,” Education Week writer Daarel Burnette II tells readers.
But with the price of oil now less than half of that boom-time high, the budget picture in energy states has changed dramatically.
“It’s not just tax revenue from oil and gas companies that’s hurting these states,” Richard Auxier, a research associate at the Urban Institute, told Education Week. “It’s that oil and gas have become such a big part of the economy.”
The drop in oil prices is affecting income tax collections in energy states, too, Auxier said. “People aren’t making as much, and so they’re not spending as much. So much in these states is tied to that industry.”
Governors in at least eight states are expected to propose cuts in the near future that could include reduced support for public education. During the recent oil boom, Oklahoma Gov. Mary Fallin and her fellow Republican lawmakers approved big tax cuts and tax breaks, and the state now collects half the taxes it did in 2007. That state now faces a $900 million budget shortfall. In Alaska, which generates 89 percent of its state revenue from oil, the state recently told its education department to cut a third of its budget.
If there’s a lesson in this for Louisiana, it’s probably summarized best by North Dakota state Rep. Jeff Delzer.
“Education is not a one-time expense,” he told Education Week. “If you use oil revenue for ongoing expenses and then that money goes away, you’ve got big problems.”