(Bloomberg) -- US pandemic aid that funneled billions of dollars to school districts across the country is expiring, threatening deep cuts to staff and services.
Districts hired thousands of educators, boosted salaries and doled out retention bonuses with the one-time funding intended in part to help reverse learning loss. Burbio, a data service that measures K-12 spending, found that districts designated at least $15 billion in just the final round of relief aid to staffing, hiring educators and retention costs. Now, that subsidy is ending and they’ll need to find money to keep paying those wages or reduce staff.
Many have already cut jobs, frozen hiring and are whittling down staff through attrition. But it likely won’t be enough and states aren’t in a position to fill the gap. Big high-poverty districts will be hit the hardest since they got a larger percentage of the approximately $190 billion provided in the Elementary and Secondary School Emergency Relief Fund. Administrative staff, mental health services, after-school classes, tutoring services and other programs are on the chopping block.
“We are gravely skeletal in ways that will not be good for students, for the community, for teachers or schools,” says Andrea Castañeda, superintendent of Oregon’s second-largest school district, Salem-Keizer. The district reduced its budget by about 377 full-time positions, or about 7% of its workforce, which involved about 100 staff layoffs in the spring, as it stared down the loss of $151.8 million in federal funds. That’s “a historic level cut,” she said.
Schools had to earmark their remaining funding by Sept. 30 and have until the end of January to spend it, with some exceptions.
More than 2,500 districts spent at least $2 billion of the final round of stimulus on mental health services and professionals, Burbio found. The Edunomics Lab at Georgetown University reported in April 2023 that of the 22 states that provided some detail on how the money was allocated, labor was the single biggest expense at just under 50%, though it was unclear how much of that went to new hires versus pay raises or stipends. That may now be as high as 60%, according to the Lab.
Chad Aldeman, an education researcher and former policy director at the Edunomics Lab, estimates that 384,000 full time jobs in public schools, including 129,000 teachers, are at risk over the next couple of years if districts have to revert to pre-pandemic staffing ratios because of funding and declining enrollment.
Labor Intensive
Chicago’s school system poured much of its federal pandemic aid into salaries and benefits. Now, the district with about 323,000 students is facing a more than $500 million deficit in both fiscal year 2026 and 2027. San Francisco’s school district — which has already slashed more than 900 mostly vacant staff positions, is planning to close some schools as it estimates it has to fix a potential $400 million deficit over the next three years.
State and local education jobs reached the highest levels since 2009 in August, according to Bureau of Labor Statistics data.
“There are a lot of outside observers who definitely pushed schools to think about using the one-time money for one-time expenses,” Aldeman said. “But at the end of the day, schooling is a labor intensive industry and if you want to do something like set up a tutoring program, you need people or if you want to address student mental health needs, you need counselors. A lot of it was just schools saying ‘what we do is work with people and we need employees to do those things.’”
Enrollment Decline
The cuts will make it harder for schools to help students recover from the learning disruption that occurred at the height of the pandemic, when social distancing and online classes upended typical academic routines. The achievement gap, measured against pre-pandemic peers, did not shrink last year, and in some grades slightly widened, according to July data from the Northwest Evaluation Association.
“The magnitude of the loss of funding per pupil because of the end of ESSER is on the same order of magnitude as we saw after the Great Recession,” said Dan Goldhaber, an education researcher at the University of Washington and vice president at the American Institutes for Research.
The pandemic also accelerated an enrollment decline at public schools that has contributed to their financial quagmire. Because a school’s funding often reflects its headcount, fewer students can mean fewer dollars, even as costs such as electricity, janitorial services or teacher salaries remain fixed — or even rise.
The San Diego Unified School District faced about a $94 million deficit going into the 2024-2025 fiscal year and is projecting a shortfall of about $176 million the following year, according to school board president Shana Hazan.
“It’s going to be really challenging to continue providing the high quality education we want for all of our children if we don’t see increases in federal and state funds in the near term,” Hazan said.
--With assistance from Nic Querolo, Nadia Lopez and Shruti Date Singh.
©2024 Bloomberg L.P.
