East Tennessee economist, schools worry about fiscal cliff deadline
"If we could ease this in, for example, over a two to three year period of time, and slowly move back to the tax structure we had before fiscal stimulus, that would be the best thing we could do for the economy," said UT economics professor Matt Murray.
"Those funds right now are funding some of my reading recovery teachers, an academic coach and some of my assistants," said Claxton Elementary principal Myles Hebrard.
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CLINTON (WATE) - The so-called fiscal cliff is right around the corner. With the social security tax break expected to expire, working Americans are wondering how the change will affect their take-home pay.
Local economists warn that going over the fiscal cliff could lead to shaky financial markets and another recession.
"It needs to go away at some point. We needed fiscal stimulus the last several years. We have less need for fiscal stimulus today because the economy is improving. But we don't need a serious shock to the economy, so if we could ease this in, for example, over a two to three year period of time, and slowly move back to the tax structure we had before fiscal stimulus, that would be the best thing we could do for the economy, that we could do to help the social security trust fund, while at the same time not adversely affecting households," explained UT economics professor Matt Murray.
But the size of paychecks isn't the only thing Anderson County Schools administrators are worried about.
Sequestration could mean more than a billion dollars could be cut from Title I school funding nationwide.
Eight of nine elementary schools in the Anderson County school district are Title I schools.
"Those are federal dollars that go to the schools where there is a high poverty rate. We're close to 75 percent free and reduced here at Claxton. Those funds right now are funding some of my reading recovery teachers, an academic coach and some of my assistants," said Claxton Elementary principal Myles Hebrard.
If a deal cannot be reached in Washington by the start of the new year, things like Head Start, vocational programs and federally-funded special education could see much smaller budgets in the 2013-2014 school year.
"The way budgeting works, we should have that money already in place [for the remainder of the current school year]. However, that should be until October 1. That's when they start their next fiscal year," said Anderson County Director of Schools Larry Foster.
It's not just about the money.
"Most importantly, I think that they know who they're affecting most besides just teachers are the students. That's what people need to understand. You know, it's going to be difficult to continue to educate students with less teachers, with less resources," Hebrard added.
The hope is that this worrying and planning won't be necessary.
"I feel like we have time on that, and hopefully the government will be able to work together and be able to close that gap, just like we're expected to close those gaps in achievement and with achievement for the state of Tennessee for this first to the top, race to the top," Hebrard said.
The cuts schools face are just part of the plan that includes more than $4 trillion in deficit reduction.