Dive Brief:

  • Districts are facing fluctuating education budget projections in some states this fall. Paired with uncertain expenses due to changing hybrid, distance and in-person learning options, education finance experts say districts are under unprecedented financial pressure.
  • Added variables like attendance and enrollment rates, state reimbursements and future federal stimulus have sent states “in various states of limbo,” said Marguerite Roza, director of Georgetown’s Edunomics Lab, an education finance research center. 
  • Places where tax revenues rely on oil or tourism have been hit especially hard. Other areas “seem like a mixed bag right now,” according to Mike Griffith, senior researcher and policy analyst at Learning Policy Institute.

Dive Insight:

School districts nationwide “are really scrambling” to line up their budgets with expected expenses as a result, Griffith said, adding it’s likely districts will change their budgets multiple times over the school year.

In Texas, North Carolina, California and other states where funding is directly linked to enrollment, districts are being “held harmless” for dipping enrollment numbers. However, Kevin Brown, executive director of the Texas Association of School Administrators, said that’s only until early November in his state. If the state doesn’t act after that, districts will get “hammered on funding,” Brown said. 

It’s likely these variables and ensuing decisions will have labor implications, like furloughs and laying offs. Dayton Public Schools in Ohio, for example, has planned temporary layoffs to save money, but will then reinstate those employees once virtual learning ends, said Katie Silberstein, a research fellow at Edunomics Lab. 

Florida’s Hillsborough County Public Schools initially authorized teacher pay increases, dipping into its reserves. Now it’s losing more money from the state due to declining enrollment and a delay to in-person learning, Silberstein said. 

In the same state, Broward County Public Schools took a different approach. It’s offering pay raises to teachers who agree to teach in-person, while teachers who don’t return must apply for a leave of absence — likely unpaid. Silberstein said this method could initially lead to savings or reduction in funds depending on the size and quantity of the raises. 

Meanwhile, not all eligible locales have received their Coronavirus Aid, Relief, and Economic Security Act (CARES) money, which is still working its way down to districts, and most are dipping into reserves. In some cases, districts might be overspending even after expenses are reimbursed by the federal aid.

When districts have overspent in previous years, Roza said, they often resort to mid-year layoffs, furloughs, four-day school weeks or similar options. In August, Nick Melvoin, a school board member for Los Angeles Unified School District who was a Title I school teacher during the 2009 recession, recalled his experience with mid-year layoffs. 

“Not only was I concerned about my job, but the whole energy of the school was just sapped because now you had over two-thirds of the faculty wondering, ‘Am I going to have a job in the fall?'” Melvoin said of the impact of layoffs, which were based on seniority.

Plus, he said: “That fell on the backs of kids, because the focus wasn’t on instruction.”   

This fall, districts are hoping for more federal aid. “It’s hard to know whether another round of money is coming, and, if so, how much it is and when,” Roza said. “But likely it would include money that could be used for the kinds of expenses [districts] are incurring right now. ” 

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