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Dive Brief:

• A new analysis by Edunomics Lab highlights a state-by-state list of school districts that are at-risk of not spending all of their federal COVID-19 emergency funding, which will expire during the 2024-25 school year. 
• The list, which includes districts where 10% or less of American Rescue Plan spending has been registered by the state and where there's at least $500,000 left to spend, includes data from 34 states and Washington, D.C.
• Edunomics Lab, an education funding research center at Georgetown University's McCourt School of Public Policy, recommends state education agencies and communities follow up with the districts to understand what's causing the slow spending, and to create a plan and support for making sure these one-time funds are used. 

Dive Insight:
 

The analysis, which was updated Sept. 29, came from data on local spending practices of ARP dollars as recorded by states through June. The K-12 ARP portion is the last and largest allocation for the Elementary and Secondary School Emergency Relief fund.

School systems received $121.9 billion in ARP funds for K-12 and must finalize plans for spending by Sept. 30, 2024. The deadline to draw down all the funds is Jan. 28, 2025. Any unspent money will go back to the federal government.

Of the districts in 34 states and D.C. that were examined, Arkansas, Delaware and Nevada have only 1 district each that appears at risk of not spending its ARP funding by the deadline. New York had the most with 158 districts.

Several districts show 0% of ARP funds used so far. For example, in Washington, D.C., D.C. Prep PCS, which has a handful of campuses across the city, has spent none of its $8.3 million allocation, according to Edunomics. This aligns with data displayed by the district's Office of the State Superintendent of Education.

Edunomics said some districts may intentionally be waiting to spend the funds. That's why it's important for educators and community members to have a clear understanding of the spend down plans, the organization said.

According to a survey released in August by AASA, The School Superintendents Association, district priority spending areas for the remaining ESSER monies are increased instructional time and high-quality curriculum materials. The survey found that 53% of district leaders anticipate that as the funds run out, they will need to cut or reduce specialist staffing, summer learning programs and staff compensation.

State education agencies can make requests on behalf of school districts to the U.S. Department of Education for ESSER spending extensions. The Education Department said it would have more details about that procedure soon.  

In total, states and districts received $189 billion in ESSER funds. With the expiration of ARP spending, the recovery money will come to a halt. That, plus falling student enrollments and slowing state revenues, could lead to "a perfect storm of financial chaos" for K-12 schools, wrote Marguerite Roza, director of Edunomics Lab, and Katherine Silberstein, research fellow at Edunomics Lab, in a Sept. 12 paper posted by The Brookings Institution.

The authors predict that high-poverty communities will face harsher fiscal cliff impacts, because those districts received more ESSER funding on average compared to wealthier communities and will need to make more adjustments as they plan for non-ESSER years in the future.