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Schools feel pinch from economic woes

Officials look for the least painful trims, but many worry about their ability to close achievement gaps.

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Ideally, financial crises would be an opportunity for states and local districts to shed less productive initiatives, but it seems to rarely work that way, says Eric Hanushek, a senior fellow at Stanford University's Hoover Institution in California. Often, a simple band-aid measure is the response, he says, such as laying off new teachers. Overall, he says, the challenge is the instability in funding: When "one year you pour a lot of money out to the schools and the next year you squeeze back, it doesn't allow for a lot of rational planning."

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Meanwhile, Georgia since 2003 has been sending less money to schools than the state formula calls for, says Herbert Garrett, executive director of the Georgia School Superintendents Association. This year the schools may face a 2 percent shortfall and next year another 3 percent, which would bring the total shortfall since 2003 to nearly $2 billion, Mr. Garrett says. It appears that state limits on class sizes and initiatives such as one that places a "graduation coach" in each high school are in jeopardy, he says. In his 40 years in education, this economic situation "ranks among the worst," he says.

When states decrease funding, local districts have often found ways to increase theirs – sometimes through higher taxes. "Per-student spending during the downturns of the early '80s and '90s continued to increase," Griffith says.

Now, however, it's not clear how possible that will be in any but the wealthiest districts. "In previous times, school districts have turned to the business community, the parent community for support ... [but now] the well is dry everywhere you look," says Dan Domenech, executive director of the American Association of School Administrators.

Schools are feeling the squeeze just as there's a surging need for the safety net they provide. Hundreds of districts are reporting that in the first few months of school, they've served nearly as many homeless students as in the entire previous year. Las Vegas saw an 82 percent increase in the first two weeks.

Districts are each required to have a liaison to help homeless children stay on track in school. "Some of the liaisons say they can't get through their stack of referrals," says Barbara Duffield, the Washington-based policy director for the National Association for the Education of Homeless Children and Youth.

Cincinnati Public Schools have seen a 28 percent increase – 266 more kids than last year, says Karen Fessler, manager of the district's Project Connect for homeless students. Her program is short-staffed, and a local nonprofit that supports schoolchildren's immediate needs is hitting hard times, too. "You hear about the bailout," Ms. Fessler says, "and you wonder, when is this actually going to trickle down to the individual families we're serving?"