Reducing District Budgets Responsibly

Susanna Loeb | Annenberg Institute at Brown University
Nora Gordon | Georgetown University
Marguerite Roza | Georgetown University
Eric Taylor | Harvard University

Breaking Down the Issue

• State revenues will drop for districts in many states. The extent of revenue loss will vary considerably across districts and could be partially mitigated by the federal response.
• If the federal government does not offset state revenue losses, districts will need to cut spending on salaries and benefits.
• School spending cuts negatively affect students’ educational outcomes and apparently neutral budget choices often have disproportionate effects on traditionally underserved students.
• The COVID-19 pandemic creates substantial new demands on schools that will likely require a reallocation of resources.

Strategies to Consider

• Some budget reductions affect student learning and well-being more than others, and the choices often come with tradeoffs. Considering the tradeoffs carefully can help reduce the negative effects of budget cuts.
• Delaying pay raises or furloughing non-working staff can reduce layoffs. Research shows layoffs have negative consequences for students.
• Economic downturns can provide opportunities for districts to bring new, differently qualified employees into the workforce.
• Economic downturns can create incentives for multiple actors to negotiate changes that might have been too difficult during better economic times.

Strategies to Avoid

• Policies that base layoffs on teacher seniority rather than effectiveness (often known as “Last-in, First-out” or LIFO) come with a series of negative consequences.
• Although shifts in retirement benefits could have longterm benefits, these shifts are unlikely to solve current problems.