A little breathing room before the cliff?

A little breathing room before the cliff? ESSER liquidation extension and its implications for educational leaders

UCEA Blog Post co-authored by Dr. Chad Lochmiller, UCEA Associate Director for Policy & Advocacy, and Dr. Michele Moore, Clinical Assistant Professor, Indiana University Bloomington

The Office of Elementary and Secondary Education at the U.S. Department of Education announced that school districts can apply for additional time to spend their remaining Elementary and Secondary School Emergency Relief (ESSER) funds, which were allocated as part of the American Rescue Plan (ARP). ESSER provided $122 billion in federal funding for states and school districts to provide educational services to students impacted by the pandemic. An extension is good news, right? Well, it all depends.

For leaders at the district and school level, the extension creates opportunities to ensure that every possible resource is available to continue to address the  pandemic’s impacts on students, schools, and families. This means providing supplemental services that help students make up lost ground. Unfortunately, the extension only applies to funds that are  already obligated and does not extend the timeline for schools or districts to expend funds that have not been obligated by the deadline of September 30, 2024. Funds can also not be spent on employees, meaning leaders will face many of the difficult personnel decisions.

Per the guidance from OESE, requests for extensions must be submitted by December 31, 2024. Extensions should make clear how expenditures are aligned with evidence-based practices, including increasing daily student attendance; providing high-quality tutoring; and increasing access to before, after, and summer learning and extended learning time. While this extension will provide districts with an opportunity to continue to access funds, the fiscal cliff remains a consideration for districts, particularly since the extension does not apply to employee related costs. In fact, there is no indication that employee related costs will be covered beyond the current deadline.

Thus, for many districts, the impact of the fiscal cliff remains a serious consideration. Scholars at the Edunomics Lab project that extensions to ESSER funds will affect less than 5 percent of ESSER III funds. Indeed, the coming fiscal cliff represents what scholars have termed “a financial U-turn” that will contribute to disruptions in many schools, particularly those which have used ESSER funds to increase staffing or maintain capacity at pre-pandemic levels. The fiscal cliff raises serious implications for schools serving the largest proportion of students with lower Socioeconomic Status. This reflects how the funds were allocatedinitially, a process that closely mirrored the allocation model for Title I funding.

So, then, what can leaders do?

First, leaders should prioritize identifying programs and include them in their spending plans, particularly those that can be contractually obligated. This ensures that funds will be eligible for the extension and thus available to spend toward the evidence-based practices recommended. Research suggests that there continue to be many states with funding still unobligated, and surveys suggest that district leadership does not know how to fully spend ESSER resources. Thus, where possible, leaders should identify and commit to interventions that require multiple years of funding so that these obligations can be covered since expenditures will be allowed until March 28, 2026.

Second, it could make sense for districts to prioritize partnerships with external contractors or third-party support providers. Since ESSER funds cannot be used to support personnel employed by the district after September 30, 2024, transitioning intervention and support services to qualified providers could minimize disruptions for students and prolong the availability of ESSER funds. This also could allow staff employed by districts to adjust their focus on the highest need students.

Third, leaders should be considering whether they have right sized their staffing and capacity commitments. News outlets have reported that pre-pandemic enrollment in public schools has not returned as robustly as expected, though state data suggests that some of this decline might have slowed. For districts and schools which have experienced a decline in student enrollment since the pandemic, it is especially important that they contemplate whether staffing plans appropriately address student needs. In districts where excess staffing has been supported by ESSER, district leaders will need to work with school leaders to identify how to transition these staff from their roles or change the funding source. This, of course, invites many questions in states and districts with strong collective bargaining rights and so will require the goodwill and collaborative spirit of all parties concerned.  Further, changing funding source is complex and can involve not only addressing specific funds used for staffing but can invite other questions related to revenue generation.

Given the circumstances facing leaders in K-12 schools, some faculty might wonder what they can do to support our K-12 partners? Certainly, faculty cannot stop the expiration of ESSER funds, but they can work in collaboration with state level partners, including school districts, to advocate for states to maintain other resources at their current levels or increase these resources to support the needs of students still struggling to recover from the pandemic. This support is vital to ensuring that students continue to be served as federal funds expire. This strategy could be particularly beneficial since state funds that can be used to support staffing and other learning supports, which ESSER dollars cannot. Indeed, there is evidence that suggests that less wealthy districts struggle to generate resources to offset reductions in funding attributed to recessions. Thus, advocating for continued funding for lower wealth schools should be an equity priority.

Although not directly aimed at changing policy, faculty can also use the challenges confronting school districts as teachable moments for aspiring leaders who are grappling with the complexities of district resource allocation. Indeed, these moments invite leaders to consider how to better invest resources to support teaching and learning and in what ways existing allocation choices can be reviewed with leadership action. The latter point is something we’ll take up in a future UCEA blog post, where we will consider different teaching approaches to school finance and resource allocation.

Finally, the extensions provided by the Department Education will not change the trajectory for many districts. Leaders will still need to grapple with difficult spending and staffing decisions. These decisions will invite consideration about the district’s commitment to equity, short- and long-term needs, expectations from parents and families.