Dive Brief:
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Districts now in the process of setting their 2024-25 budgets are proposing cuts to account for the end of the Elementary and Secondary School Emergency Relief fund, foreshadowing how the end of federal COVID-19 relief aid will impact school operations in the coming years.
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The last ESSER pot, provided under the American Rescue Plan, must be obligated by Sept. 30. In planning for its expiration, districts nationwide are planning to lay off staff and to cut or alter music and arts programs and summer enrichment, among other things.
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Tight budgets will remain into the next school year, but may ease up beginning in the 2025-26 school year, said Marguerite Roza, director of Georgetown University's Edunomics Lab, an education finance policy and practice research center.
Dive Insight:
District leaders, some of whom are experiencing cuts for the first time under their leadership, are beginning to engage their school boards in the budgeting process. Enrollment declines, especially in urban districts, have also contributed to thinner budgets.
"Usually, public education is pretty stable from year to year, which is why districts get in this habit of rolling over their prior year's budget instead of re-examining it, and seeing what works or what doesn't, and trying something new," said Roza. "So this does make this year different in that sense."
Districts are likely to cut vendors first, such as tutoring companies or afterschool programs, in favor of protecting employees. Professionals other than teachers — like social workers, counselors and reading coaches — are also on the chopping block, said Roza.
The research center has warned school districts over the past year to prepare for the fiscal cliff that is fast approaching in the months ahead. Last year, Roza predicted the average district will have to cut costs by $1,200 per student in 2024-25.
However, she also said it's common for districts to put off budget cuts. Even now, districts may use some of their remaining ESSER funds to cushion next year's budget, meaning some districts will have to reckon with cuts down the road.
As of January, 13 states still had 50% or more of their K-12 district-level ARP funds left to spend. Only about three quarters of ESSER funds had been spent by that time.
"And so now it's kind of all coming down at once," Roza said of ESSER budgeting.
