Panelists Talk Districts’ Challenges and the Looming Fiscal Cliff
Rash: The upsides of spending made possible by pandemic relief funding are held in tension with the reality of what happens when the money runs out.
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A version of this essay originally appeared at .
The North Carolina education news outlet EdNC is a member of the , an organization of 21 nonprofits from 14 states that collect, analyze and distribute information on governmental activities to help citizens and policymakers improve their communities. As a past president of the association, I was asked to moderate a panel on the looming fiscal cliff facing states and districts at this summer’s annual conference in Worcester, Massachusetts.
As school districts nationwide face a federal funding cliff, government researchers from independent think tanks around the country met in Worcester, Massachusetts, to discuss how municipalities and states are preparing.
Since 1914, the has been connecting researchers working to improve their communities. This year’s annual conference was hosted by the .
During the pandemic, the federal government issued three tranches of funding totaling $190 billion for school districts. Districts spent this money on everything from one-time costs like HVAC upgrades to recurring costs to address learning loss and student wellness.
The last round of funding must be committed by Sept. 30, 2024 鈥 just a little more than a year from now.
Districts can request 18-month extensions on spending the funds and in extraordinary circumstances. But for most districts, the fiscal cliff is looming large.
It鈥檚 the loss of federal funding that’s being used to pay educators that has researchers nationwide concerned. When this money goes away, districts will either have to get funding from other sources or cut back.
A issued in March identified 15 states facing the most complex challenges with the fiscal cliff.
Massachusetts has a statewide strategy to increase funding for schools that should help districts cope.
In the months ahead of the pandemic, the state had been preparing to implement the Student Opportunity Act, a passed in November 2019.
鈥淐OVID derailed the first year of the plan,鈥 said panelist Colin Jones, a senior policy analyst for . 鈥淚n the beginning, it wasn鈥檛 clear 鈥 particularly for the low-income districts that were the targets of the reforms 鈥 that they were going to get more federal aid than they were losing by delaying the plan.鈥
鈥淭here is a false narrative,鈥 Jones said, 鈥渢hat districts are sitting on piles of cash.鈥
That narrative is complicated by the fact that Massachusetts hasn鈥檛 passed a state budget for 2023-24 even though the fiscal year started July 1, he said.
鈥淎s ESSER fades away, we have to go back to where we were heading,鈥 Jones said. 鈥淪tates have to assume they are on their own.鈥 He noted that the toughest part of the conversation for states that want to address the cliff is where the revenue will come from.
Panelist Alexis Lian is director of policy for the , which is part of , a research consortium 鈥渄esigned to support evidence-based spending, analyze the impact of COVID recovery funds and provide a platform for the field to learn from one another and reflect on progress made.鈥
EdImpact launched 24 data dashboards for districts in Massachusetts showing planned investments of the federal funding, finding investments focused on academic recovery, including high-dosage tutoring, acceleration academics and high-quality curriculum; and on social emotional and mental health, including implementing , SEL curriculum and mental health literacy.
Lian said 鈥90% of district decisionmakers cited challenges deploying stimulus funds.鈥
For comparison, 260 school districts nationwide to see how they deployed federal funding.
As of July, Lian said, in Massachusetts all of ESSER I funding has been committed, 82% of ESSER II and just 33% 鈥 $1.1 billion 鈥 of ESSER III.
鈥淭here is an enormous amount of money to still allocate,鈥 said Lian. 鈥淒istricts are working incredibly hard to make really difficult, strategic final decisions.鈥
Based on their work with districts, EdImpact issued six takeaways for investing the remaining funds, including a coordinated statewide approach to prioritize investments that impact students and can be scaled.
Panelist Jason Stein, vice president and research director of the , said 鈥渙ne important learning from the Wisconsin experience is that as legislation like [the American Rescue Plan] gets debated at the federal level, it can still play out at the state and local level in very different ways from the original intent.鈥
The federal legislation authorizing funding contained a intended to keep states from reducing their support for public education.
Stein said his state has revenue caps that limited the revenue districts could receive the last two years, so there was no increase in state funding. 鈥淚t was in reaction,鈥 he said, 鈥渢o a perception that districts were getting so much federal money that there was no need for the state to do its typical funding.鈥
Many districts in Wisconsin went on to pass referenda, Stein said, with voters opting to raise their own taxes to increase school funding.
Making national news, Gov. Tony Evers, a Democrat and a former teacher and state superintendent, used his partial veto power and some of the proposed state budget to institute a $325 funding increase per student for the next 400 years 鈥 through 2425.
In North Carolina, where the 115 school districts are facing the fiscal cliff and other threats to enrollment and funding 鈥 including a proposed expansion of school choice 鈥 is looking at district , which operate like savings accounts, and public school foundations in and as tools for districts to cope with revenue pressure, whatever the cause.
An actual boots-on-the-ground perspective of the federal funding cliff was shared with researchers by panelist Sara Consalvo, budget director for the .
According to Consalvo, her district used federal money to bridge funding for the state鈥檚 Student Opportunity Act, stabilize funding because of changes in enrollment, upgrade and maintain ventilation systems in 44 schools, address learning loss through summer school and afterschool programs, purchase personal protective equipment and technology, and acquire a fleet of new yellow school buses.
The district, which had previously contracted for school bus services, received permission to purchase 165 buses.
鈥淚t鈥檚 been an absolute success,鈥 Consalvo said of this one-time investment.
The upsides of spending made possible by the pandemic relief funding are held in tension with the reality of the federal fiscal cliff for both district leaders and the researchers watching this drama unfold.
鈥淎s school district leaders look to their 2024 budgets and beyond,鈥 says a called 鈥淯p in the Air鈥 by the Wisconsin Policy Forum, 鈥渕any see that a key lifeline is fraying and about to break.鈥
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