Was it Too Much Too Fast?

Susan Gentz is the founder of BSG Strategies and an education policy expert working to educate district leaders on funding, flexibility, and opportunities for innovation in state and federal policy.

When the CARES Act was passed, the bill that created the Elementary and Secondary School Education Relief (ESSER) Fund and the Governor’s Emergency Education Relief (GEER) Fund, every headline across the nation read: Superintendents need more, districts need more, this is not enough.

Congress listened and provided not only one, but two more stimulus packages to provide for these needs. At the end of the stimulus packages, educators across the nation collectively found themselves with more than $190 billion and governors found themselves with portions of $8 billion to address education issues. According to the National Center for Education Statistics (NCES), “total expenditures for public elementary and secondary schools in the United States in 2017–18 amounted to $762 billion.” Between the three ESSER funds and Geer Funds, districts found themselves with a 25% increase of total budget. Divide that by the three years available and that is an annual increase of 8.3% in district budgets.

However, along with those numbers, strict spending requirements were enacted. Funds from ESSER I and GEER I are required to be obligated by September 30, 2022. For anyone doing the math, that’s six months away, but when you look at the spending, especially for GEER fund, there are a LOT of funds not yet obligated.

Take Washington, for example. According to the Department of Education’s COVID-19 Transparency Portal, as of January 31, 2022, the state had spent only 5.8% of the GEER fund. Rhode Island has spent only 1%! There are so many examples, click on the transparency portal to take a look for yourself. The GEER fund is largely unspent and is $8 billion in addition to the$180 billion allocated for ESSER Funds.

What Does This Mean?
As a policy person, this is just so hard for me to comprehend. Education advocates were begging the federal government for funds for districts, and they got it. We all know this is a once in a lifetime influx of funds, so why aren’t the dollars flying out the door?

I had a great conversation with a former district leader, and it seems a lot of it comes back to the fact that district leaders are not that interested in “soft money,” which this administrator defined as a one-time funding source. District leaders must be cautious about l spending money in a way that will incur recurring costs. For example, if money went to purchase devices, there is still the cost of servicing the devices, and then of replacing the devices when they are no longer useful.

District leaders also fall back to what they know, even when regulations are loosened. For example, even though ESSER funds were distributed through the Title I formula, the requirements of spending the funds are not the same as Title I requirements–but this can be (and is in many ways is) confusing. Additionally, even though the federal law doesn’t require all purchases to be bid competitively, the default position is to bid out projects. A district’s spend cycle is typically 18-24 months, meaning if the funds have to be spent in a year, it could be very difficult to meet the obligation deadline of the first round of funding.

Perhaps states with low percentages spent have a plan and the dollars just haven’t gone out the door yet, I don’t know. (Someone on the ground- tell us what is happening!) We’re not the only ones noting this issue: as we were putting this post together, the Brookings Institute observed that “with a use-it-or-lose-it expiration date of September 2024 for these funds, the math speaks for itself: To spend the remaining funds, most districts need to up the pace at which money goes out the door each month.”

All I know is the fact that there are billions of dollars sitting in a fund for emergency spending is perplexing.

Was Funding Actually Not the Issue?
Ever since I entered the education space, I have heard from some district leaders that they cannot innovate because they don’t have the funds. But now that the cup overfloweth, to some extent the uses for funds show trends that are standard purchases. Future-Ed out of Georgetown University recently published survey results that represent 60% of districts across the nation - which is the best response rate I’ve seen from anyone on how ESSER dollars are being used.

On the surface, the fact that almost a quarter of funds is going to “staffing” seems like districts used the money to pay existing expenses. But the graph doesn’t fully address what items such as “staffing” and “facilities” really cover. The question is, are the strategies being used for academic recovery, facilities and operations, and staffing different from pre-covid, or are they the same?

Regardless, the timing issue remains. At the AASA conference, superintendents asked Secretary Cardona if there would be an extension on the use of funds. He was sympathetic, but ultimately the answer was pretty much no.

This Is A Little Bit Political
If you recall, the American Rescue Plan Act, (ARPA) provided the largest influx of funds to education, and was enacted in a complicated insider baseball process called reconciliation. Reconciliation requires only a simple majority to pass, rather than the traditional 60 votes. Getting ARPA signed into law was a tough battle for the Biden administration, and they are not all that excited about the idea of amending any of the terms - including a longer period for funds to be obligated.

I see the political argument as the Biden admin and Democrats were arguing that these funds were needed because of covid impacts. Now it’s hard to say that funding is still needed because covid impacts are winding down–or at least it will be in another 9 months (past the deadline).

This seems especially true as the Federal Communications Commission (FCC) just extended deadlines for the Emergency Connectivity Fund (ECF) with no hesitation. The FCC created the rules and operation of the ECF and therefore is able to extend the deadlines as they see fit, without any votes from capitol hill.

There has been some grace with the Tydings period. According to the Federal Register, “ARP ESSER funds are subject to the Tydings amendment in section 421(b) of the General Education Provisions Act, 20 U.S.C. 1225(b), and are therefore available to SEAs and LEAs for obligation through September 30, 2024” - which at least gives districts an additional 12 months to obligate; however, this rule only applies to ESSER III, not the first two rounds.

What Do We Do?
As I mentioned before, this is my policy perspective, which we all know is so different from what happens at the state and district level. I want to understand the hard conversations happening, understand if Governors don’t want to use the funds or if districts are not petitioning for them? Please let me know your thoughts, and most importantly, any way we can help ensure that these funds are used for the biggest needs of students and educators.

I am hopeful that there is a lesson learned here, which is that districts are looking for consistent funding streams, and drinking out of a fire hose flowing with money isn’t exactly the most helpful either.