The shutdown is hurting schools whose budgets are mostly federal money

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In Chinle, Arizona, financial distress caused by the government shutdown has led to the suspension of after-school programs, including some that students rely on for meals.

Federal money makes up only a small part of most school budgets in the U.S. But at Chinle Unified School District — spread across 4,200 square miles (about 6,800 square kilometers) in the heart of Navajo Nation — half of the revenue comes from a single federal program, called Impact Aid.

Most school districts rely largely on local property taxes to fund teacher salaries and building upgrades. But school districts like Chinle that include Native American reservations, military bases or other federal compounds have fewer options for raising local taxes for education. Federal land isn't taxable, and the government holds most reservation land in trust for Native tribes, so it can't be taxed, either.

Instead, the federal government contributes $1.6 billion a year in Impact Aid to those schools. But that money is on hold this year, with payments suspended by the shutdown, leaving schools to ax some programs and weigh how long they can go without deeper cuts.

“The kids maybe are going home and not eating, because these are the only three meals they may get in a day,” said Quincy Natay, Chinle's superintendent. “All of those programs are on hold and we’re looking at, ‘What programs can we eliminate?’”

Food aid for families has also been disrupted by the shutdown. Two federal judges ordered the Trump administration to use contingency funding to pay out Supplemental Nutrition Assistance Program benefits, but the government warned it could take weeks or longer to restart partial payments.

Most of the federal money going to school systems arrives before the start of the school year. Impact Aid, however, typically is delivered annually beginning in October. The grants go to about 1,000 districts, which together have nearly 8 million students enrolled. Arizona receives more money from the program than any other state, in part because of its military bases and expansive tribal land.

Many districts that rely on the program try to carry a deep cash reserve because of uncertainty over the timing and amount of the payments, but some already are feeling the pinch.

At Chinle, the $30 million in Impact Aid goes toward teacher salaries, full-day kindergarten and other costs. Beyond the after-school programs, Natay has paused a number of construction projects. If payments don't restart, Natay said, within a few months the district would need to borrow money to make payroll.

Education Department workers who would typically field questions about funding have been furloughed — and their jobs are slated for elimination — compounding the sense of uncertainty.

“Several of our districts are scaling back,” said Cherise Imai, executive director of the National Association of Federally Impacted Schools. “They’re going into their reserves, or whatever other funding they can use to meet payroll.”

In a letter to the Education Department, several Democratic Congress members from Arizona urged the department to reverse layoffs that hit staff working on the Impact Aid program.

“We are deeply troubled by these layoffs and their potential to cause irreparable harm in schools across our state,” they wrote. A federal judge last week blocked indefinitely all layoffs made by President Donald Trump's administration during the shutdown.

At Lackland Independent School District outside San Antonio, Impact Aid makes up about half the budget, compensating for the presence of Lackland Air Force Base. Superintendent Burnie Roper said the longer the shutdown lasts, the more uncertainty schools face.

“We just hope that Congress can figure it out,” Roper said.

A Montana school system in an area with little taxable property, Rocky Boy School District has a large reserve fund. But big, unexpected costs can quickly drain the balance, Superintendent Voyd St. Pierre said.

“If I were to have a boiler go out in the middle of winter, well, that's probably a $300,000 fix,” St. Pierre said. Impact Aid helps fill the budget gaps, he said. “We don't have any other funds. We don't have any other state funds. It's very difficult for us to go to a bank to get a loan in terms of the taxable valuation or collateral we could provide."

Districts must reapply for Impact Aid every year, which is allocated based on a complex formula with factors such as percentage of federal property and student headcount. A small portion of the program is allocated through competitive grants, which the Education Department oversees. Some districts become newly eligible for funding each year or have new staff who haven't handled the program before.

Districts typically would go to Education Department staff when they have questions, but the government shutdown has left them unsure where to turn, said Anne O'Brien, a spokeswoman for the National Association of Federally Impacted Schools.

“There’s no one at the department to answer those questions,” O’Brien said. If the Trump administration eliminates Impact Aid staff permanently, she said, it is unclear who would answer those questions in the future.

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