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Four Fiscal Cautions for Districts as Pandemic Continues

With the recent surge in coronavirus infections, the fiscal outlook for states gets worse and worse—and that's bad news for districts heavily reliant on state aid. A growing chorus of state and local government officials say the Republican relief aid bill being debated in the Congress is insufficient and, if passed as currently proposed, would allow for severe K-12 budget cuts for America's schools. 

More than a dozen state legislatures have promised to reconvene later this year to rewrite their budgets and at least 10 are in session already. That leaves school districts bracing for more budget cuts this year. 

Here are four things to consider when trying to better understand districts' fiscal outlook. 

States' fiscal outlook will probably get worse.  The Center on Budget and Public Priorities, a left-leaning think tank that has advocated for more K-12 funding,  this week estimated states will lose at least $555 billion in revenue over the next three years. To make matters worse, the recent decisions of some governors to shut parts of their economies back down to prevent the further spread of the virus has many politicians worried the sales and income tax revenue won't rebound the way forecasters originally predicted. 

The $70 billion that Senate Republicans want to provide schools in the HEALS Act is not enough to help all the districts who will need help. The amount set aside for K-12 outlined in the GOP's most recent federal relief package is insufficient to stave off K-12 budget cuts, analysts have concluded.  And K-12 leaders are letting Congress know. It's also important to remember that a big piece of any new relief aid would be sent through the Title I program that aids disadvantaged students, which some districts get a lot of, and many districts don't get much of. If Congress decides to send much of that aid only to districts that reopen, that would further limit its impact since more and more districts, including those that get a lot of Title I aid, say they won't reopen this fall. 

State and local governments would not recieve any aid in the current Republican proposal, and that means school funding advocates would have a more difficult fight in state legislatures this year. While public school funding takes up, on average, around half of states' budgets, many other public services, including health departments, higher education, and welfare services will have their hands out. Without federal relief, states' budgets will be slimmer. Similarly, many local governments, which have also been hit by the pandemic, will now have to cut from their K-12 spending. 

Reopening schools online only will save some money, but not enough.  https://twitter.com/so_caly86/status/1288878732653068289?s=20As we saw last spring, closing school buildings can save districts transportation and substitute teacher costs, but other costs, such as food services and online learning, rise.  Because many districts plan to reopen school buildings for instruction only when a vaccine is developed, superintendents might be reluctant to lay off masses of paraprofessionals and teachers. Operating in-person learning during a pandemic requires plenty more people in the building to keep class sizes low, keep buildings clean and and prevent crowding on school buses, health and K-12 experts have concluded.  

Follow your state's fiscal outlook here

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