Finding lemonade in the big old batch of lemons the coronavirus has given us

While Idaho is in the midst of navigating the day-to-day, even hour-to-hour, challenges wrought by the Coronavirus, we are already starting to see the outlines of the fiscal crisis that is bearing down on Idaho and the rest of the country. Many of us remember the pain that faced schools and educators a decade ago when per pupil funding in Idaho dropped almost 20 percent from FY2009 to FY2010. It took a better part of the last decade for per pupil funding to claw its way back to pre-recession levels.

How bad things will get this time around depends on a variety of factors not least of which is how much worse will the virus get and how long will we have to deal with it. “Uncertain times, uncertainties all over,” said Lucy Dadayan, a researcher with the Urban-Brookings Tax Policy Center who focuses on state-level tax and economic issues. “This is not just a particular sector of the economy shutting down, it’s the whole world shutting down,” she added. “It feels like it’s going to impact every single state, particularly the states that were the early victims of the coronavirus.”

The federal government is already looking to pump upwards of $1 trillion into the economy in the coming days and weeks. And according to some sources, at least $70 billion of this will be in the form of an education package.

The good news for Idaho is that we were one of the last states to have a confirmed case of the Coronavirus. We are also blessed to have a relatively low population density. That’s true even of our larger metropolitan areas like the Treasure Valley. Seattle, San Francisco and New York City we are not, but that doesn’t mean we are out of the woods. The worse is surely yet to come. but the math and density factor work to our advantage. Hopefully the actions taken by the state, local communities, and local schools will also bend the curve.

After the Coronavirus fades into history, and it will in time, its economic impacts will still be felt. Fortunately, Idaho is better positioned than many other states. We have the benefit of a fiscally conservative state government that has worked hard over recent years to build up its rainy-day fund. In recent days, the Legislature increased the Budget Stabilization Fund from 10 percent to 15 percent of general fund revenues. In eerily prescient comments from his state-of-the-state address in January, Gov. Brad Little said, “My budget leaves an appropriate cash balance and shores up our rainy-day funds, which have helped us weather economic storms that forced other states to raise taxes.” He continued, “Idaho is ranked in the top 10 states nationally for the balance of our budget reserves, but a credible stress test showed we have more work to do to prepare for a recession.”

Credit Gov. Little and the Legislature for their conservative approach to budgeting and preparing for an economic downturn. Other states are in much dire situations heading into an economic recession. Consider Illinois where I was born and raised. With a population of 12.74 million people that state had a rainy-day fund of just $4 million in 2018, while Idaho, with a population almost seven times smaller than Illinois, had a 2018 rainy-day fund of $354 million.

Idaho is in the midst of a battle with the Coronavirus and it will surely have an impact on our state’s economy and ultimately funding for public education. But, we should take some encouragement in the fact that our state leaders took steps during the good times to prepare for the bad economic times we now face.

 

Terry Ryan

About Terry Ryan

Terry Ryan is CEO of the Boise-based education nonprofit Bluum and Board Chair of the Idaho Charter School Network.

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