The Pew Charitable Trusts

The economic crisis has hit the classroom, and public schools and colleges are taking extreme measures to cope.

In Alabama, lower-than-expected revenues forced the state to hold back 25 percent of the schools' October allocations until more money arrived. The state paid the rest of the money by Nov. 6, but in the meantime, schools dipped into reserves or borrowed money to pay their bills.

Georgia's DeKalb County school district was faced with cutting $10.5 million from its budget. Anticipating a worsening economy, the school board instead approved plans to cut $20 million and will lay off 127 employees by June. It's also scaling back its signature door-to-door bus service, instead creating pick-up and drop-off hubs for students who travel by bus to school.

"This is the most difficult time many have experienced in their tenure with the district," said Dale Davis, a district spokesman. "The possibility of layoffs and forgoing programs and things of that sort - how much more difficult does it get?"

In higher education, Rhode Island's three public universities and Michigan State University have taken the unusual step of raising tuition midyear, while the presidents of the 30 colleges in the State University of New York system are asking for a $545 increase for spring 2009. It would be the system's first tuition increase in five years.

Midyear increases are "a measure of last resort," but one that other colleges and systems will have to consider, said Dan Hurley, the state relations director of the American Association of State Colleges and Universities (AASCU). Cutting education spending is an indication of how bleak the economy looks. States are usually reluctant to cut school funding in times of economic hardship, because education is "politically sacrosanct," said Scott Pattison, the executive director of the National Association of State Budget Officers.

During the economic downturn after the 9/11 attacks in 2001, half the states still managed to avoid major cuts to education, he said.

Yet already this year, South Carolina cut 3 percent funding to K-12 education, while California Gov. Arnold Schwarzenegger (R) told schools and community colleges that their budgets will be up to $2.5 billion poorer for the rest of this school year because of the state's money crisis.

On Wednesday (Nov. 12), New York Gov. David Paterson (D) presented a budget that will chop $1.43 billion from schools over the current and next fiscal years. The last time the state made midyear cuts to K-12 schools was in the early 1990s.

Although some experts knew it would be a rough budget year, the fallout has come sooner than expected. "We thought this year was going to be okay, and next year would have problems. Now we think this year will have some problems, and next year will have even more problems," said Mike Griffith, an analyst for the Education Commission of the States , a nonpartisan think tank that researches education issues.

As a result, schools are also delaying buying new textbooks and cutting back on extra services, such as after-school and summer-school classes. Rhode Island cut almost a million dollars from its state-run school for deaf children. In Hawaii, the Board of Education is working out a plan to charge more for lunch, from $1.25 to possibly more than $2.

Schools also are looking at ways to raise money. South Carolina's superintendent of education held a meeting Nov.13 to discuss how private foundations - and private dollars - can help out public schools. The Clark County school district in Nevada is considering selling ads on the sides of school buses, while the Los Angles school district might sell ad space on billboards on school grounds that face the freeway.

But there's only such much schools can do to raise money on their own. In Texas, 51 school districts asked voters on Election Day to approve a property tax increase to help supplement their budgets, but only half the district increases were approved.

In Alabama, voters passed a ballot measure that allows the state to borrow money from its rainy day fund to help pay for education while the economy is stalled. If they hadn't, "it would mean that individual school systems would be on their own to borrow money to meet their obligations, to pay teachers, to sustain programs that they would not have had the financial cushion to afford," said Michael Sibley, an education department spokesman.

Legislatures often slash higher education funding first in tough economic times, because tuition is seen as a built-in funding source. But besides being forced to raise tuition, some cash-strapped colleges are turning away eligible students. This year's Florida State University freshmen class has about 1,000 fewer students than last year because of diminished funds and spaces.

The 23-school California State University system, the country's largest four-year university program, is considering turning away eligible students next year for the same reason. While individual campuses have had to deny eligible students before, this would be the first time the whole system did so. In the past, a B-average and completion of the required courses were enough to guarantee a California resident a spot.

Yet, tuition increases and enrollment cutbacks come as more students are flocking to college, particularly community colleges and public universities, as the weak economy forces students to find cheaper college options or encourages the unemployed to further their education. "I know going into this year that the demand for admission outstrips (colleges') capacity," said AASCU's Hurley. "We are really witnessing some pretty turbulent times right now."