Skip to content

EdNC. Essential education news. Important stories. Your voice.

Ahead of 2024 ESSER funding cliff, here are resources for district and state leaders to make hard budget decisions

Voiced by Amazon Polly

The start of the school year always comes with big decisions for district leaders. This year that is especially true, as the window is closing to spend pandemic relief money from the ESSER (Elementary and Secondary School Emergency Relief) Fund.

The deadline to spend those funds is September 30, 2024. New resources from The Education Trust and Education Resource Strategies provide guidance for district and state leaders to make data-informed, equitable decisions as they navigate this school year, as well as the years after the fiscal cliff.

This funding drop-off, coupled with declining enrollment, means a cut of about $1 million in the 2024-25 budget of an average high school of 850 students, The Education Trust estimates.

“Districts should continue making important spending decisions with community input to ensure they are investing in programs and services that are showing improved academic and social-emotional outcomes for students with the highest needs,” said Nicholas Munyan-Penney, assistant director of P-12 policy at Ed Trust. “It is not enough to spend down ESSER funds, this historic aid must be spent well on sustainable programs and resources that are meeting outcome goals and ultimately benefiting students — particularly those with the highest needs — in the classroom for years to come.” 

The Ed Trust brief encourages district leaders to center equity when spending remaining funds this school year. Decisions about what investments to continue or to cut should be made collaboratively, the brief recommends, with school staff (classroom teachers and other educators that support students and families), students, and families at the table.

They should also be data-driven “by tracking the effectiveness of implemented programs and focusing on ensuring support for students with the most need,” the brief reads. “Ahead of the 2024 deadline, districts should have a plan in place to sustain the programs and services that provide equitable outcomes for all students.”

The brief provides these three questions for families, community members, and advocates to ask of district leaders:

  1. How are district ESSER investments equitably addressing the unique needs of students in the district? Are students with the highest need getting access and seeing success?   
  2. What are the stated goals of district ESSER investments? Are these programs achieving their goals? How do we know?    
  3. How do ESSER investments fit into districts’ overall strategy for addressing the needs of students?    

Not all districts are navigating the same issues with the same level of resources. Education Resource Strategies’ brief aims to help state officials determine which districts need their support the most.

It outlines six indicators of “high-risk districts:”

  1. Large ESSER allocations.

    Since the federal government used Title 1 formulas to determine the amount of funding it sent districts, states can use the amount of funding to determine how steep the cliff will be for districts.

    “When you compare the amount received to a district’s overall revenue, it becomes clear that ESSER represented an enormous increase for some districts: as much as 40% or more,” the brief states. “For these districts, the expiration of ESSER funds is a considerable change in their overall financial picture.”
  2. Increased teacher salaries.

    Some districts felt it necessary to use the one-time funding for teacher compensation to keep up with inflation and retain staff.

    “School districts that increased teacher salaries will see their baseline operating costs increase,” the brief says. “When it becomes more expensive for school districts to maintain their existing services, it becomes more difficult to find ways to reduce spending.”
  3. Increased staffing levels.

    Similar to compensation, the brief notes that many districts used ESSER funds to hire additional personnel, such as social workers and literacy coaches. “… When ESSER comes to a close, districts will have to face eliminating positions they can no longer sustain, which can cause significant disruption in the system.”
  4. Change in per-pupil funding levels.

    This one is direct: “Districts receiving more per-pupil funding from the state or local levels will be more insulated from the effects of ESSER dollars going away.”

    The brief points to other states — Tennessee, Maryland, and Massachusetts — that have adjusted their funding formulas to provide more money to districts, particularly those that will lose the most revenue from the cliff.
  5. Limited unrestricted fund balance.

    Flexibility in how districts are able to spend their funds will matter in the coming school years. Some districts have more limitations than others.

    “… Additional flexibility can allow districts to make gradual reductions over time instead of making cuts in a single fiscal year,” the brief states.
  6. Unspent ESSER dollars.

    As time runs out, it might be more difficult for districts to spend remaining funds in thoughtful ways that are effective in the long term.

EdNC staff reporting relies on staff, interns, and columnists.