Superintendent Chad Gestson has been spending a lot of money lately.
He’s had to buy personal protective equipment for staff and laptops for around 28,000 teenagers. He’s also had to keep his schools open for a small number of students with disabilities and extra needs, as well as continue social services like food assistance for families during a pandemic.
“We’re living in the most costly, expensive times that I’ve lived through as superintendent,” said Gestson, who has been in that job since 2015.
Gestson runs the Phoenix Union High School District in Arizona, which has 22 high schools. Around 86 percent of his students qualify for free or reduced-price lunches, a federal measure of poverty.
The vast majority of teaching has been remote since last March. Gestson said the district has been spending less in overtime costs because it is not running sports and clubs after school, but virtually every other area of spending has been the same or higher. Technology costs have been the greatest, but PPE and safety expenses have played a part as well.
“Even though people think school systems are closed, we’re still providing all the services that we do during a typical school year,” Gestson said.
Phoenix Union received around $12 million from the first coronavirus stimulus bill, according to Gestson.
“That sounds like a lot of money, but if you think about buying a laptop for nearly 30,000 teenagers … that, in and of itself, is your entire stimulus money,” he said. “That leaves no money left over for Wi-Fi, no money left over for PPE, no money left over for all the other expenses.”
When the coronavirus hit the U.S. last spring, public schools across the country were forced to grapple with how best to educate their students while still protecting lives. For districts that stayed open, that meant buying PPE, investing in new cleaning methods and updating building ventilation systems. For those that closed buildings or turned to a hybrid of in-person and remote learning, it meant buying one-to-one remote learning technology so that every student had a laptop or learning device. But that initial financial hit was just the beginning, according to some education experts.
The long-term costs of making up for learning losses over the next few years are expected to far exceed the expenses that schools have already incurred. Have governments spent enough money to meet the unexpected and very steep costs of the last year? How much money would it take to cover those costs, finally reopen every school and then compensate for the tremendous learning losses? And if we don’t invest enough now, what could that mean for the public school system long term?
Experts — and history — suggest that school districts need much more than what federal and state governments have provided so far.
“Even though people think school systems are closed, we’re still providing all the services that we do during a typical school year.”Chad Gestson, superintendent of Phoenix Union High School District
White students could lose four to eight months of learning by June 2021, and students of color could lose six to 12 months, according to a McKinsey & Company report published in December. Schools are now tasked with making up for those kinds of learning losses.
Education Resource Strategies (ERS), a nonprofit that assists school districts, analyzed large urban school systems as well as “countywide” systems that are a mix of urban and suburban, with a significant number of students of color, students from low-income families, and students with additional learning needs. ERS estimates that making up for learning losses, as well as increasing necessary social-emotional support for students, will cost between $12,000 to $13,500 per pupil in those districts over the next five years.
And while school districts grapple with current and future costs, most states are simultaneously likely to collect fewer tax dollars because of Covid-19’s impact on the economy, which will hurt their ability to fund public education.
“K-12 schools are, in the majority of states, the largest portion of a state budget,” said Victoria Jackson, a senior policy analyst at the Center on Budget and Policy Priorities, a research institute. “Any decline in revenues for state and local government is going to be a huge hit to K-12 schools.”
The federal government, so far, has provided two major stimulus packages. The first, passed in March of 2020, provided around $13.2 billion for K-12 education. In December, another gave around $54 billion to public schools. But those were one-time payments to cover what will likely be recurring costs.
As schools eagerly await a new stimulus package from the Biden administration, education researchers warn that the schools serving the most vulnerable students will likely bear the brunt of that financial pain unless the federal government delivers, and states make thoughtful cuts in school spending.
Money from the stimulus bill passed in December has not arrived yet, but Gestson plans to use the expected $40 million to try to make up for learning losses that his students have suffered.
Phoenix Union is planning the most robust summer school it’s ever had, offering more evening school to students who have fallen behind, and rewriting the curriculum for next year.
“All that is extremely expensive. And on top of that, all the PPE required to bring people back,” said Gestson. “This anticipated next stimulus package is going to be vital.
“When we think about the amount of money and resources needed to navigate a state and federal economic crisis, the first package was not nearly enough,” he said. “The second one gets us closer, but we also don’t think it’s enough long term.”
Schools in the U.S. are generally funded through a combination of state and local dollars, with some limited federal money. But there is no uniform national formula, and each state funds its schools in a different way.
In most places, state governments try to compensate for the fact that some school districts struggle to raise money locally.
For example, Phoenix Union is primarily funded through a state-based formula, with the opportunity for local bonds and overrides (tax levies), and some federal dollars.
About two-thirds of the district’s funding comes from the state of Arizona. That means the majority of its budget is affected by how much Arizona is able to collect in property, sales and income tax.
Taxes that make up state spending are generally more volatile than local tax revenue, according to Rebecca Sibilia, the former CEO of EdBuild, a nonprofit think tank focused on school funding that closed in June of last year. Income, sales and energy taxes are most at risk.
“About half of all of the money in our education system is kind of in a pretty stable position,” Sibilia said. “And then half of the money that’s in our education system, that’s kind of way up in flux, and it depends on the state.”
The economy of every state has been affected by Covid, although some have been devastated more than others. According to Sibilia, projected declines in all state revenue in fiscal year 2021 are 21 percent in Alaska; 15 percent in Hawaii, Illinois and New York; 14 percent to 15 percent in Nevada; and 17 percent in Oklahoma. Texas has a projected revenue decline of 14 percent this year, and is looking at another 5 percent decline next year.
Those types of losses are likely to be rolled into state budgets for next year, and therefore education budgets, according to Sibilia. But experts say not only the cuts themselves, but the way that states make those cuts, will be crucial for the most vulnerable American students.
Some states, like Ohio, that announced targeted expected cuts last year, tried to take less money away from schools operating in the lowest-wealth districts, and took more from wealthier school districts that could raise more money locally. (Ohio Gov. Mike DeWine has since announced the reversal of some of those cuts.) If a different state makes a flat cut across all school districts, that will dramatically impact schools that are less able to raise money locally, and that rely on a higher percentage of state funds. Across-the-board cuts particularly affect students of color, students from low-income backgrounds, and students from communities that have already been hit hardest by the pandemic.
“The communities that need the most will face the biggest hits,” said Zahava Stadler, special assistant for state funding and policy at The Education Trust, a nonprofit education research and advocacy organization. “If the state has to cut, and if it doesn’t cut very carefully, the default situation is that those cuts are going to fall heaviest on high-need communities, on districts that have the least ability to make up those dollars locally.”
Patrick Miller is the superintendent of Greene County Schools, a district in North Carolina that he describes as “poor and rural by every definition.” It has a little more than 2,700 students in K-12, and another 160 or so in pre-K, spread out over six schools.
The district started transitioning to remote learning in March of last year. Miller got masks from the state but spent money on other types of PPE, including gowns, thermometers, face shields and disinfectant. The district opened schools on Aug. 17 and is rotating students on a one-week-in-person, one-week-remote schedule.
Miller’s budget for the 2019-20 school year was around $35 million, and Greene County Schools received $1.4 million from the first coronavirus stimulus package. Miller was told the district had to spend it before the end of the year, although those parameters were changed in late December. The district spent around $700,000 increasing its one-to-one remote learning technology for students and on tech assistance, with an additional expenditure of around $100,000 on PPE.
“We would have gone belly up without that money,” said Miller.
Greene County Schools receives around 65 percent of its funding from the state, 20 percent to 25 percent from local property taxes, and the rest from the federal government. So many families qualify for SNAP or other assistance through the local department of social services, that the district is part of the federal Community Eligibility Provision program, in which every student can get a free breakfast and lunch, regardless of the family’s income, according to Miller.
“Greene is always at the bottom of the barrel for the ability to raise money through local property taxes. We’re in the bottom five, usually,” said Miller.
He still does not know how much Greene County Schools will receive from the December stimulus package, but believes it’s important “because everyone’s unsure what the state budget picture is going to look like.” With the December funds, Miller is planning to finish transitioning remaining students to one-to-one technology, and then hold onto the rest of the money until he knows what the state will do.
“I’ve got a feeling there may be a chance that the [North Carolina] General Assembly would look at the federal relief money as an opportunity to backfill some holes and just let that money supplant some of what they may have given us,” said Miller.
“What’s the basket of things that we’re going to do to meet this tidal wave of need?”Jonathan Travers, partner at Education Resource Strategies
Stimulus money has been crucial to keeping schools operating and transitioning to remote learning. But it won’t last forever, and there is a danger that states will use it to replace their own spending, and that schools will use one-off stimulus funds as a long-term solution.
That’s what some states did in 2008, and when federal money dried up a few years later, school budgets fell off a cliff. Although the contours of that budget crisis were different, the ghost of the 2008 financial crisis looms large over the current catastrophe. When Covid hit, some states were just beginning to catch up to where their pre-2008 spending had been, adjusted for inflation, according to several education experts. And many schools never recovered.
“There were a number of districts last time around that invested non-recurring funds in recurring costs, and as a result of that, experienced some real challenges once that federal money went away,” said Jonathan Travers, a partner at ERS. “They didn’t try to change underlying cost structures, they just added to what they were doing.”
The impact of Covid could be even more dramatic than that of 2008 without serious and sustained federal intervention. During the Great Recession, state funding declined 6 percent in 2010, according to an analysis by Tyton Partners, a consulting firm. In terms of Covid’s impact, Tyton estimates that if there had been no federal stimulus to date, there would be a state budget decline of 5 percent in fiscal year 2021, and 13 percent in fiscal year 2022.
Schools right now are experiencing what Sibilia calls the “double squeeze”: facing the costs of getting kids back to school and making up for learning losses, at the same time that most states will likely cut their funding.
But Travers is concerned less with dollar amounts than with how schools can do that effectively over the long term without just adding to underlying cost structures. That could mean extending the school day or school year in a way that is cost effective, or “high-dosage” tutoring integrated within the school day and curriculum.
“What’s the basket of things that we’re going to do to meet this tidal wave of need?” Travers said.
State revenue shortfalls have been less disastrous over the short term than once feared, Travers said. He and other experts are now looking at how schools can stay afloat over the long term.
“The revenue dynamic is now more about ‘How do we make sure that we make spending decisions in the short term that are going to be sustainable two, three, four years out?’ ” said Travers.
Biden’s proposed stimulus package, which must be passed by Congress, would give around $130 billion to K-12 schools to help them reopen, make up for learning losses and stay viable over the next few years.
For some education experts, there is no single number in a dream stimulus plan that could cover what needs to happen in public education during and after the Covid pandemic. Instead, they said, the pandemic should be a catalyst for changing the way that states raise money for education. As it stands, schools in low-income neighborhoods serving students from vulnerable populations are still at the mercy of changing winds in state funding.
“The devil’s in the details no matter what, right?” Stadler said. “No magic number is going to tell me that it’s being spent in the right places on the right things.”
“When we think about the amount of money and resources needed to navigate a state and federal economic crisis, the first package was not nearly enough.”Chad Gestson, superintendent of Phoenix Union High School District
Stadler envisions this time as a call to action for states to be careful with where they make cuts, prioritize education of underserved students first and foremost, look for new sources of funding, and think long term. That could include refining the state sales tax to ensure it includes services used mostly by people with high incomes, implementing a state estate tax, or pooling property tax dollars for education at the county or state level so that high-income communities can share wealth, according to Stadler.
For instance, Arizona passed Proposition 208 in November to put a 3.5 percent income tax surcharge on people making more than $250,000 a year, which would raise hundreds of millions to support K-12 education. That money is designated for teachers and classroom support staff, mentoring and retention programs, and the Arizona Teachers Academy, which gives financial support to people earning their teaching certificates in exchange for a commitment to teach in the state.
Gestson doesn’t have a specific amount he thinks his district will need to overcome the crisis. “After the economy crashed in the Great Recession, the stimulus package total for schools was closer to $100 billion. And so, when we think about the amount of money and resources needed to navigate a state and federal economic crisis, the first [Covid] package was not nearly enough,” he said. “The second one gets us closer. But we also don’t think it’s enough long term.”
The next stimulus will bring the amount spent to help schools to nearly $200 billion. But no specific amount will be enough to help the children who need it most without changes to how states fund schools, said Sibilia. “Let’s figure out the actual systemic fix, so that these low-wealth school districts aren’t the ones who consistently have to look at vulnerable revenues, cut their budgets, not know what’s coming in the future.”
This story about stimulus funds for schools was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for Hechinger’s newsletter.