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5 Things District Leaders Should Brace for During a Recession

web-recession-IMG.jpgThere's no question now that states, reeling from the economic impact of the coronavirus pandemic, will soon enter a recession which will then lead to a precipitous drop in K-12 revenue

Fiscal experts are warning school district officials to hunker down, reduce spending, avoid hiring new staff and build up their savings in order to weather the coming storm. 

Marguerite Roza, a school finance professor at Georgetown University who has advocated for more efficient and transparent K-12 spending, held a webinar Tuesday to help district officials and advocates better understand the ramifications of a recession and how they can best prepare. 

"The coronavirus is going to have a really profound impact on state revenues," Roza said. "We need to be thinking about that now and doing the absolute best that we can to ensure that the limited dollars going forward can do the most for students."

Following are five trends she said K-12 officials should watch for.

1. Inequitable spending between districts is exacerbated during a recession: Districts that serve the biggest populations of impoverished students depend more heavily on state aid since they tend to have low property values in their communities, Roza said.  During a recession, sales and income tax revenue take the biggest hit since people buy less and make less money.  Property values tend to be more stable. Any cuts to state K-12 aid will hit low-income districts the hardest.

2. Students' needs intensify. During a recession, tens of thousands of parents are laid off from their jobs, exacerbating the need for services such as meals, health care, and mental health supports.  More students come to school sick, hungry, and emotionally traumatized.  Absenteeism and mobility rates skyrocket. Students fall behind academically.

3. Attrition goes down, creating more budget woes. As unemployment goes up during a recession, teachers and other staff members tend to hold on to their jobs, Roza said. As turnover within districts slows, the average cost of teachers rise as they accrue more years of experience and higher salaries. This often eliminates the option for administrators to reduce costs by not replacing retiring employees and forces them to lay people off. 

4. States' teacher shortages may be filled. With unemployment rates rising, many people who have left the teaching field for better paying jobs will likely return, Roza predicts.  Over the last few years, states have tried raising teacher pay, lowering entry requirements, and eliminating test-based evaluations in order to reverse teacher shortages in rural areas and impoverished schools. 

5. There will be few new spending initiatives. State policymakers during a recession are reluctant to push through new initiatives to overhaul funding formulas or set aside money for expanding things like social-emotional learning, for example. Roza said states also tend to loosen up regulations on how districts are required to spend their money to allow for administrators to move funds around to save costs. 

See Roza's entire presentation here. Read Education Week's previous coverage of Roza's tips during a recession here

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