Advance Appropriations Limit Forecasts Education Funding Increases

As we discussed yesterday, both Houses of Congress took up the 2009 congressional budget resolution this week. The budget resolution serves primarily as a blueprint that shapes tax and spending legislation considered later in the year by Congress. One obscure component of the budget resolution can have a big influence on education funding for the upcoming fiscal year: the advance appropriations limit.

Both the House and Senate versions of the budget resolution would increase the limit on the amount of funding that the Appropriations Committees can appropriate through advances. The House sets the advance limit at $27.6 billion, and the Senate allows $29.4 billion—$2.4 and $4.2 billion more than in fiscal year 2008. What does this mean for education? It likely means Congress is planning on boosting education funding this year—but at the expense of budget transparency by using this confusing procedure.

What Are Advance Appropriations?

An advance appropriation is funding provided in an appropriation law that becomes available one or more fiscal years after the fiscal year for which the appropriation act was enacted. Advances effectively borrow from next year’s federal budget.

Advance appropriations for education are possible because the school academic year spans two federal fiscal years. Congress can spread one school year’s worth of funding over two fiscal years without affecting school operations. For fiscal year 2008, Congress provided $17 billion for four K-12 education programs—more than half of the total funding for those programs—through advances. Other, non-education programs also receive advances, but most of the funds go to education programs.

An Education Budget Victory…

Last year, the new Democratic majority in Congress allowed for the first increase since 2002 in advance appropriations ($23.2 billion to $25.2 billion). All of that $2 billion in new money went to the $17 billion advance for education programs.

The fiscal year 2008 advance appropriation increase turned out to be a key strategy in Congressional Democrats’ effort to increased federal education spending above the levels President Bush proposed. After months of political jockeying between the President and Democratic Congressional leaders, Congress agreed to reduce its proposed 2008 appropriations funding to the level requested by the President.

But this agreement didn’t include advance appropriations. Congress was able to include $2 billion in advances above the President’s request, and the White House turned a blind eye to this additional funding. Thus, the Democratic majority was able to increase education funding levels above the President’s request by using advance appropriations to remove those increases from the debate.

…Or an Education Budget Defeat

Advance appropriations cause a number of budget problems. For example, advances make it difficult to assess the actual level of funding for education programs, because the subset of education programs funded with advances are effectively funded in three pieces (the prior year advance, the current year appropriation, and the succeeding year advance). Education advance appropriations also make it difficult to compare spending to the rest of the federal budget, because virtually all other programs funded through appropriations receive only one regular appropriation.

Congress does not need to advance appropriate for education programs. Instead—as it did until the mid-1990s—it could provide one regular appropriation, passed for the fiscal year that begins prior to the upcoming school year. Under either approach, schools theoretically can be provided with the same funding levels.

If Advances Worked Last Time, Why Not Do it Again?

Because the increases in education advance appropriations proved effective in obscuring education funding levels last year, many in Congress are now willing to go for another round in the fiscal year 2009 budget resolution. While the actual amount of advance appropriations won’t be decided until appropriations legislation is considered later this year, the budget resolution sets the advance limit. The Appropriations Committees must abide by this limit, or their legislation could be blocked by a procedural hurdle known as a point of order.

The temptation to continue expanding advance appropriations is strong, because Congress can increase funding for education without a public fight. But there are negative long-term consequences to using back-door budget procedures for this purpose. The loss of budget transparency further confuses an already complicated and misunderstood education budget process.