Three years after the stock market cratered in 1929, American schools suffered their own crash. School districts had managed to ride out the early years of the Great Depression; in fact, because many districts depended on property taxes, which didn’t crash as fast as income taxes, more than a few managed to increase spending.
But in the 1932–33 school year, many districts ran out of funds. With more than one in five workers unemployed, many households didn’t have the money to pay property taxes, so all of a sudden, the school boards didn’t have enough money to pay their bills. Some 2,200 schools in 11 states closed entirely—in Alabama, schools in 50 out of 67 counties shut down. Many more districts cut services or sharply reduced their hours; thousands of districts in the Midwest and South shrank the school year to fewer than 120 days.
When we talk about government response to economic crisis, we tend to focus on the federal government; for one thing, it’s big, and it’s right there in Washington, where it’s easy to keep track of. But economic contraction is often felt most keenly by state and local governments, which deliver highly visible services like schools and police and fire departments.
Unlike the federal government, almost all states have to enact budgets that are nominally balanced. A recession may be the worst time to raise taxes, but it is also the worst time to cut services. Unfortunately, states have to do one or the other. And sometimes, as in those Depression-era school districts, they’re forced to do both.
State officials from both parties are wrestling with ways to curb the salaries and pensions of government employees, which typically make up a significant percentage of state budgets. On Wednesday, for example, New York’s new Democratic governor, Andrew M. Cuomo, is expected to call for a one-year salary freeze for state workers, a move that would save $200 million to $400 million and challenge labor’s traditional clout in Albany.
But in some cases — mostly in states with Republican governors and Republican statehouse majorities — officials are seeking more far-reaching, structural changes that would weaken the bargaining power and political influence of unions, including private sector ones.
For example, Republican lawmakers in Indiana, Maine, Missouri and seven other states plan to introduce legislation that would bar private sector unions from forcing workers they represent to pay dues or fees, reducing the flow of funds into union treasuries. In Ohio, the new Republican governor, following the precedent of many other states, wants to ban strikes by public school teachers.
Some new governors, most notably Scott Walker of Wisconsin, are even threatening to take away government workers’ right to form unions and bargain contracts.