Education Advance Appropriations

The Congressional Democratic majority has made increasing education funding a priority in its fiscal year 2008 spending plan. Their Labor, Health and Human Services, Education and Related Agencies (Labor-H) appropriations conference agreement proposes increases in education for fiscal year 2008 that, if enacted, would result in one of the largest year-over-year increases (in nominal terms) in Department of Education funding since the No Child Left Behind Act was passed in 2002.

Congress would like for much of the proposed increase in education funding, however, not to occur in fiscal year 2008, the time period covered by the current funding cycle. Instead, Congress would provide much of their proposed education funding increases in the form of "advance appropriations," a rarely understood budgeting approach that shifts funding into the fiscal year following the year covered by the appropriations process. The pending Labor-H conference agreement includes $17.0 billion in advance appropriations for education programs, up from the $15.0 billion that has been provided in each of the past four years.

Because advance appropriating takes funding out of the budget that is currently being debated, it aids Congress in arguing that proposed spending increases are only modestly above the President’s request for the 2008 appropriations cycle, while simultaneously touting education funding increases. In fairness, Republicans used the same technique many times as well when their party controlled Congress from 1995 to 2006.

The Federal Education Budget Project recommends that Congress end advance appropriations for education programs and provide all discretionary funds as part of each year’s regular appropriations cycle. Advance appropriations serve no functional purpose for schools, but they create a loss of transparency, comparability, and simplicity in federal education budgeting. It allocates spending before future budgets have been established. The approach was originally used to skirt spending limits and budget procedures in place from 1991 to 2002. But these spending limits and procedures have expired, and Congress continues to advance appropriate education funding.

Summary

1) Fiscal year 2008 education funding increases proposed by Congress are financed mostly through the "advance appropriations" process. The advance appropriations process enables Congress to fund education programs for the next school year in part out of this year’s budget and in part out of next year’s budget. Pending is a Congressional proposal to increase education advance appropriations by $2 billion over the fiscal year 2007 level. If enacted, it will mark the first increase in advance appropriations for education programs since the 2003 appropriations cycle and bring the total advance appropriations level to $17 billion.

2) Advance appropriations add complexity to the education funding process and are of no practical benefit to recipients. Congress began using advances to get around budget rules enacted in the 1990s. Although these rules expired five years ago, Congress continues to employ the advance appropriations process to mask budget effects.

3) Congress should end advance appropriations for education programs by providing a one-time funding shift that moves advances back a fiscal year so that they align with the current funding cycle. A new scoring rule to prevent future advances should also be enacted. The combined effect will reduce complexity and increase transparency in the federal education budget process. Such a change does not increase or decrease education funding. But it does promote transparency, simplicity, and clear decision making in federal education budget matters.

For the full paper, please see the attached PDF.