The Economy Today: School’s Out

With Money Tight, Classes Are Slashed

The New York Times leads its print edition with a dispatch about the latest victim of the recession: summer school. The federal government has been urging local school districts to use some of the $100 billion in education funding provided by the stimulus bill to maintain summer programs, but most districts have used the money for other purposes. As a result, summer classes—which, research suggests, help close the achievement gap between students from poor and wealthy families–-are being slashed. The story does a stellar job incorporating social science research on the benefits of summer classes with a roundup of news from around the country.

At the national level, two new reports: One of the “green shoots” variety, the other more of a dark cloud. A key manufacturing index declined less than expected, says The Associated Press, “offering more hope that the longest recession since World War II is near an end.” But there’s no sign that the turnaround will mean more jobs anytime soon. Unemployment reached 9.6 percent in June, a 26-year high, and the rate of job losses, which had been slowing, accelerated. At least the Los Angeles Times pairs this depressing news with a nifty interactive chart.

In non-Argentine-mistress-related Mark Sanford news, South Carolina’s application for federal stimulus funds for its schools was approved, notes The Greenville News. The money amounts to $625 million over the next two years, with $185 million earmarked for K-12 schools this fiscal year–-still not enough to close what had been a $500 million deficit. In what must seem like a prior lifetime, the state’s governor had opposed seeking the federal funds until the state Supreme Court ordered him to do so.

With California still without a state budget and set to begin printing IOUs–-nearly 29,000 of them–-today, the big question is whether banks will accept the notes, San Diego’s Union-Tribune reports. Bank of America says it will do so through July 10, while Wells Fargo has yet to commit. The banks face a dilemma: the longer they accept the notes, the less incentive the state’s dysfunctional legislature has to reach a deal. Meanwhile, small-business owners and others waiting for payments from the state are getting anxious.

California’s not the only state still haggling over its spending plan. In Illinois, Governor Patrick Quinn vetoed a part of the recently passed state budget that provides for payments to social-service providers, states the Chicago Tribune. Quinn, a Democrat who replaced Rod Blagojevich, supports funding for the services but wants the Democratic-controlled legislature to back his plan for an income tax increase to boost revenue. No timetable is set to resolve the dispute; in the meantime, social service providers have started laying off staff and turning away patients.

More budget woes from Florida: Police officials in Tampa are cutting thirty-six jobs in an effort to save $1.85 million, reports the St. Petersburg Times. The job cuts should be restricted to civilian positions, at least for 2010, officials tell the paper.

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Greg Marx is an associate editor at CJR. Follow him on Twitter @gregamarx.