Once the recession ended, however, so did the stimulus — long before state and local governments were ready to pick up the slack. Federal per-student spending fell more than 20 percent from 2010 to 2012, and it has continued to fall. State and local funding per student were essentially flat in 2012, the most recent year for which data is available.
I've been doing some thinking what effect Massachusetts' foundation formula has on something like this, and, so far as I can see, it's much the same: if the local community can or is able to step in to take up the missing piece, then the district can see the funding remain stable or keep pace. If not, then, while the foundation formula is going to keep us from the worst of the bumps, districts are still at the mercy of larger entities.
This ties directly in, as well, to what our major challenge in Worcester was this year: the inflation factor. For the FY15 budget, the inflation factor is 0.86%. This is well below the current U.S. inflation rate (ending May 2014) of 2.1%; it's also well below the annual cost increases for the Worcester Public Schools, of about 3%. And this is particularly a problem, because the foundation budget inflation factor's actual name is "the Implicit Price Deflators for Gross Domestic Product, State and Local Government Purchases"* That means that it's based on how much state and local governments spend: local and state governments spend more, the inflation factor goes up; local and state governments spend less, the inflation factor goes down. If we have less to spend, the inflation factor goes down, and then we have even less to spend, and the inflation factor goes down, and...Note that it doesn't necessarily reflect actual cost increases, which it might if it were tied to other things, like the inflation rate. It does put us in a vicious cycle, though, unless we rework the formula, step it up locally, or both.
*Nope, not making that up. See page 68 of the FY15 Worcester Public Schools budget.