School district budget deficits are everywhere
Even when a fiscal cliff is in plain sight, it can be hard to avoid. Here’s why.
Happy weekend, readers! We are preparing for anywhere between four and 12 inches of snow on the mountain today. Yesterday, my husband and I set about making the necessary preparations. To him, that means salting our driveway and prepping the snowblower. To me, that means going to the grocery store to make sure we had all the ingredients to make cookies and hot cocoa. (Just one example of the many ways we balance each other out.)
This morning, I’m writing about public education and the large deficits opening up in K-12 schools. (The same is true for higher education but I’ll address that at a later point.) Federal pandemic funds for schools expire next school year and that’s playing a big role. But why should aid that everyone knew was temporary have this kind of effect? Read on.
Public education’s fiscal cliff
Public schools received a total of $190 billion in additional federal aid across three separate pandemic relief funding bills. That pool of money, called the Elementary and Secondary School Emergency Relief Fund, or ESSER, was intended to help schools address educational issues and disparities arising from the pandemic.
For the past few years, Georgetown University’s Edunomics Lab notes, “District leaders have more money at their disposal than ever before. Normally leaders spend budget seasons trying to pare back planned expenditures to match their revenue reality. But with ESSER, districts had to come up with new ideas for how to spend one-time funds within a limited time period.”
(The Edunomics Lab is the best resource around on what’s going on with ESSER. I highly recommend exploring their data.)
Because the pandemic exacerbated and widened gaps in learning access and outcomes, school districts that had a higher percentage of students from lower-income households received more funding than wealthier districts. They also had a lot of flexibility in deciding how to use the funds. Examples include: PPE, technology, building upgrades to reduce health hazards, creating programs to track and reduce learning loss, and professional development for teachers and staff.
But for the upcoming budget season, all that is going away.
Schools have until Sept. 30 to obligate (decide how to spend) their ESSER funds.
They must spend their funding by the end of January 2025.
States can apply for a 14-month spending deadline extension on behalf of school districts.
Dozens (if not hundreds) of school districts across the country are reporting budget deficits for the 2024-25 school year and warning of things like staff cuts, consolidation and other belt-tightening measures.
Facing budget shortfall, SF school board votes to cut over 900 unfilled positions
Seattle School Board approves plan to reduce $105 million deficit
WDC (Minnesota) School Board cuts school district budget, raises rates
FNSB (Alaska) School District projecting largest ever budget deficit
Houston-area school districts facing multi-million dollar budget deficits
To solve $150 million budget gap, Memphis school district may cut 675 jobs
“This is the kind of stuff that we just normally don’t see,” Edunomics Lab Director Marguerite Roza told The Providence Journal. “It’s going to be very chaotic, and districts are going to have to work really hard this winter to solve these problems.”
What’s more, because more funding went to higher-need districts, their fiscal cliff is much steeper than others.
But everyone knew this was coming. Why is it still causing so much disruption?
A big part is how funds have been spent. According to the Edunomics Lab, roughly half the funds we know about were spent on labor costs.
20 states have not reported details on how districts spent their ESSER funds
Browse states’ ESSER spending plans submitted to the U.S. Department of Education
How districts are spending—and how they’ll soon be cutting
In the 22 states that provide some spending detail, labor totaled just under 50% of expenditures, according to Edunomics Lab data. We know through state plans that a lot of relief funding to recruit and retain teachers was intended for spending that (unlike salaries) can be pulled back. I.e., “Grow Your Own” programs, offering financial incentives, providing staff mental health supports and creating alternative licensure routes.
But federal guidance also allowed funds to be used for salary increases.
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