Jul 17 2020

Making School Budgets Whole and Equitable During and After COVID-19

This post is part of LPI's Learning in the Time of COVID-19 blog series, which explores evidence-based and equity-focused strategies and investments to address the current crisis and build long-term systems capacity.

The economic impact of COVID-19 is staggering. Over 30 million Americans have lost their jobs and are receiving unemployment support. More than 5 million workers have lost their health insurance. The majority of states are seeing massive declines in revenues and significant new costs, including those related to health care and unemployment. According to the Center for Budget and Policy Priorities, state education budget shortfalls are projected to be about 25% in Fiscal Year (FY) 21, with additional gaps in FY 22. Many states have already cut their education budgets, are planning to do so, or have deferred payments in the hope of additional federal assistance.

Meanwhile, the country has turned its attention to the debate around the complex issue of when and how to safely reopen schools. Among those weighing in have been state-facing and education organizations, state and national parent groups, as well as the American Academy of Pediatrics, the National Academies of Sciences, Engineering, and Medicine, and the President, among others. Politics aside, most agree that to open schools safely we must simultaneously suppress the virus and address dire budgetary needs—which include new, unanticipated health and safety costs.

The federal government has a unique and essential role to play in ensuring that students—especially those furthest from opportunity—do not bear the brunt of the economic hardships created by COVID-19. States, unlike the federal government, cannot engage in massive borrowing and other fiscal maneuvers in response to significant and unforeseen fiscal crises. Much like fiscal recovery from a natural disaster, states must rely on the support of the federal government, which has both the resources and the budget flexibility states lack. As federal policymakers craft future relief packages, two key questions should guide their analysis: First, what will it take to make school districts whole—that is, make sure they have sufficient funding to cover the myriad of added costs and budget cuts associated with COVID-19? And second, how can federal funds be used to address historic and current inequities in ways that put us on a path toward a more just educational future?

The federal government has a unique and essential role to play in ensuring that students—especially those furthest from opportunity—do not bear the brunt of the economic hardships created by COVID-19.

A delayed or inadequate response will compound the impact of this unprecedented crisis on children and families, especially those furthest from opportunity.

Pre-Pandemic Education Conditions Were Rife With Inequity

Underlying the worst economic downturn in nearly 100 years are long-standing racial and economic inequities that have impacted educational opportunity. The United States has one of the highest rates of childhood poverty of the countries in the Organisation for Economic Co-operation and Development (OECD). Black, Latino/a, and Native American children experience much higher rates of poverty than their White counterparts. Children living in poverty in the United States also have a much weaker safety net than their peers living in other industrialized countries, where universal health care, housing subsidies, paid parental leave, and high-quality, universally available child care are the norm. Public schools in the United States are also among the most inequitably funded of any in the industrialized world. Nationwide, there’s a gap of $1,800 per student in local and state funding between school districts that serve predominantly students of color and those that serve predominantly White students. On top of this, prior to the pandemic, state and local education funding was still below pre–Great Recession levels in 22 states and Washington, DC.

The Resources Needed to Respond to This Crisis

States are facing extensive new k–12 education expenses as a result of COVID-19, including those related to providing distance learning, expanded learning, and additional food services for low-income families. These additional costs, combined with projected revenue shortfalls, could result in funding needs for states ranging from $230 billion to $305 billion. Districts are also incurring significant—and unbudgeted—expenses related to ensuring the health and safety of students and staff when they return to campus. The Council of Chief State School Officers (CCSSO) estimates that it will cost districts about $30 billion to ensure schools adhere to COVID-19 health and safety guidelines, including providing personal protective equipment. The American Federation of Teachers estimates another $35 billion will be needed for additional instructional staff to support adequate social distancing.

Taken together, it could cost between $295 and $370 billion just to make sure schools are made “whole”—that is, shielded from budget cuts and funded at the level needed to operate safely and provide students with access to instruction and needed supports. This estimate does not include the cost of updating or replacing HVAC systems, a “high-priority” mitigation strategy identified by the National Academies of Sciences, Engineering, and Medicine. The Government Accountability Office estimates that 41% of all districts nationwide have these needs.

Taken together, it could cost between $295 and $370 billion just to make sure schools are made “whole”—that is, shielded from budget cuts and funded at the level needed to operate safely and provide students with access to instruction and needed supports.

While the federal CARES Act was an important first step for schools, it falls far short of the need. The $13.2 billion it provides specifically for k–12 education is less than one half of 1% of the trillions thus far allocated for the recovery, and a tiny share of the amount needed. A wrinkle in the law prohibits most school districts from applying for the portion of the funds identified for “local governments.” Unfortunately, the pending HEROES Act includes a similar limitation.

By contrast, during the Great Recession, the federal government allocated more than four times as much for k–12 schools. Meanwhile, in terms of economic impact on state revenues, our current crisis is projected to be at least two and half times worse than the lowest point of that downturn.

Using Existing Data to Understand and Respond to Need

While this pandemic has touched nearly every school district, the impact of budget cuts and the level of student needs are not equally distributed. Many of the communities that have borne the brunt of COVID-19 have also been subject to long-standing inequities prior to the current crisis. We should therefore target emergency funding where it is needed most.

Data consistently show the disproportionate impact of COVID-19 on people of color and communities of concentrated poverty. For example, using publicly available information, the Brookings Institute has created an “equity risk level” based on high rates of poverty, inequitable health outcomes, and multigenerational family living to map where there are current and potential disparate impacts from COVID-19 on Black Americans. As the Brookings authors note, economic and racial injustices and structural inequities, such as lack of adequate health care—factors that contribute to education inequities—also contribute to COVID-19’s inequitable toll.

Economic and racial injustices and structural inequities, such as lack of adequate health care—factors that contribute to education inequities—also contribute to COVID-19’s inequitable toll.

Decades of data show that certain groups of students have long been underserved by the current education system. This includes students of color, students from low-income families, and English learners, as well as those with special needs, who are experiencing homelessness, who are in foster care, and whose families are engaged in seasonal work. The impacts of these disparities show up in regular measures of student achievement, graduation rates, English language proficiency, and indicators of school and educator quality and student engagement. More recently, superintendents surveyed have added access to online learning as one of their top equity concerns.

States and districts have used these robust data on demographics, access to opportunity, and outcomes to inform meal distribution, to close gaps in the digital divide, and to identify where additional social and emotional supports are needed. In the same way, policymakers at all levels can use existing data to target funding where the need is the greatest. Such a strategy could include looking at areas of disinvestments and inequities that contribute to gaps in educational opportunities and outcomes, mapping the disproportionate impact of COVID-19, and using data on student outcomes.

Wise Funding Strategies Can Ensure Quality and Equity in Education

Equitable funding that makes district budgets whole is essential to ensuring students do not pay the price for COVID-19. It is equally important that districts channel funding into proven strategies that close long-standing gaps in opportunity and increase student achievement. Research consistently shows that investments made in strong educational programming (mainly high-quality teaching) and the resources necessary to learn are effective at closing opportunity gaps and increasing achievement. This was the strategy used for a time in Connecticut, Massachusetts, North Carolina, and New Jersey, which resulted in shrinking gaps and improved outcomes for all students.

At the core of wise funding strategies is a sustained and systemic investment in educator recruitment, preparation, and support to ensure that all students—especially those furthest from opportunity—have continuous access to well-prepared, effective, and diverse educators. Investing in high-quality early-learning opportunities is equally fundamental for future academic success and improved life outcomes. Setting high state standards, while providing the curriculum, materials, and technology necessary to meet them, is also key to improving outcomes for students. There are also powerful benefits to investing in meeting the social, emotional, and academic needs of students. This includes creating safe and inclusive learning environments and organizing schools in ways that allow for personalization and to support student and teacher learning. Many of these elements can be found in high-quality community schools, which provide expanded learning opportunities and strong instructional leadership and parent engagement, in addition to providing students with a range of supports and services. Together these foci create a comprehensive agenda for policymakers to pursue to address equity in the time of COVID.

The Funding Path Forward

Even in this time of uncertainty, we actually do know quite a bit about the magnitude of the need associated with COVID-19. We know where the educational inequities exist, which communities are being hardest hit by the pandemic, the level of investments needed, and where those investments should be made. We also know that states and districts will be unable to provide students with the instruction and supports needed without substantial federal support.

What remains uncertain is whether the federal government will respond swiftly and adequately to the challenge. Also unknown is whether, when the pandemic recedes, this will be seen as a time when we refused to return to the “normal” inequities of the past and instead put in place the adequate and equitable investments necessary for all of the nation’s students to be successful.



Michael A. DiNapoli Jr. is a Senior Policy Advisor at the Learning Policy Institute.