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What the Congressional Stalemate Over Relief Aid Means for Districts' Budgets

President Donald Trump's decision to call off any relief aid for low-income school districts until after the election will have severe implications for this year's topsy-turvy K-12 budget cycle. 

All this summer, state legislators—leery of cutting K-12 aid before a pivotal election—have anticipated a second round of relief aid to help shore up their budgets. California lawmakers, in fact, wrote a second federal relief package into their now-enacted state budget. (It may now have to be revised). 

With new federal aid delayed for at least another two months, Title I districts, which federal aid is usually sent to, are even more vulnerable to mass layoffs in the coming months (read our coverage here). 

Following are five ways the Congressional standoff will directly impact low-income districts' budgets this year. 

1) Districts will be even more reliant on their fund balance accounts. When schools first shut down last spring, districts went about tapping into their rainy day funds to pay for distance-learning startup costs, such as new laptop computers and online curriculum. They tapped into that money again this school year in order to purchase PPE, keep bus drivers and paraprofessionals on staff, and hire more teachers to prevent student crowding and nurses to prevent outbreaks.  Many districts have told local media that most of that money is now gone.  

2) The attendance wars will ramp up. There was already widespread angst among CFOs that districts will be fiscally punished next spring for losing such sizeable chunks of their student body this past summer amid the pandemic.  With no new federal aid, superintendents will now make a full-court press for legislatures to hold them harmless for enrollment and attendance loss this year.  Charter schools, virtual schools, and public homeschool programs which now serve a large portion of those students have claimed they should get all the state aid meant for them in order to prevent even more student academic loss.  States can't afford to please both schools that have gained students and schools that have lost students. (Read our coverage here.)

3) Any mid-year budget cuts will be proportionally larger and more likely to include staff layoffs. Districts spend the bulk of their money at the beginning of the school year and enter yearlong contracts with vendors to provide a range of services. When states cut their budgets halfway through the fiscal year, district chief financial officers have to cut proportionally more sizeable slices of money out of their budgets, since they've already spent so much of it. They also have to lay off more teachers since they can't abruptly end contracts they've entered. (Read our coverage here.)

4) Staff that are only needed for in-school learning are now more vulnerable to being laid off. Many district administrators made a gamble this summer that federal aid would arrive by the fall and they could use that money to keep bus drivers, maintenance crews, and paraprofessionals on staff in the case that infection rates plummet and they need to quickly reopen school buildings.  Now that the relief aid won't likely arrive for at least another two months, administrators will recalculate and could lay off classified staff, an emotionally draining and politically combative process.  Rehiring staff can prove expensive and logistically complicated since school districts now must compete with an (albeit slowly) rebounding economy.  (Read our coverage here.) 

5) Districts could forgo purchasing PPE and other COVID-related material.  Districts this year have been bombarded by all sorts of unusual costs associated with remote and in-person learning. As more districts now consider going back to in-person learning and there is less cash to go around, it's more likely  that administrators will consider cutting corners on health guidance.  Should they purchase multiple masks for teachers and students? Or just teachers? Should they purchase Plexiglass to surround front office desks, teachers' desks, and students' desks? Or just for the front office?  With most federal, state, and local health guidance not being mandated by lawmakers, districts' decisions are now more likely to be based on affordability. (Read our coverage here.)

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