Nonprofit Newswire | Schools Perched on Funding Cliff

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March 16, 2010; Omaha World-Herald | How many nonprofits are bracing themselves for the stimulus funding cliff—that point in the not too distant future when the extra moneys that reached nonprofits through the American Recovery and Reinvestment Act are no longer available?

Are they bracing for the inevitable occasion of laying off new hires and closing down new programs, expecting a second round of the stimulus to keep new programs going, or trying not to think about their fiscal and programmatic devolution in the hope that somehow they’ll be saved when the time nears?

Some public sector agencies are calculating the future stimulus-less future now, and the picture isn’t pretty. In Omaha, the school district is already beginning the process of determining which and how many of its 8,224 employees will be laid off over the next two years as stimulus funds disappear, leaving a $26.8 million gap after the 2010-2011 school year (Note that 15 percent of state government aid to local school districts in Nebraska this year is ARRA funding). Among those to be cut are lots of “non-certified staff” such as bus drivers, food service workers, and maintenance staff, but also teachers and assistant principals.

Although the process contemplated in Omaha doesn’t seem to be as draconian as Kansas City—Missouri is where the decision was made to shut down half the city’s schools—officials anticipate layoffs and program cutbacks that will hurt. There’s some thinking about the possibility of new resources for the schools, but taxpayers don’t appear to be jumping at the prospect of paying higher property, sales, or income taxes to the state. According to one suburban Omaha school board member, “The forecast just doesn’t look good . . . the stimulus dollars really helped last year and this coming year, but it all goes away”. It seems to us that the Omaha schools’ thinking about a post-stimulus future is going to have to be replicated throughout the nonprofit sector as well.—Rick Cohen