What Will It Take to Stabilize Schools in the Time of 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.

If anyone has ever questioned the role of public schools in our society, the events of the past 2 months, since COVID-19 spiked in the United States, should put those questions to rest. As shelter-in-place orders rolled out across the country, public schools stepped up to feed millions of children and families, to provide distance learning—including providing computers and connectivity to hundreds of thousands of families that did not have them—and, in many cases, to enable child care for essential workers. Now, as the country looks to reopen businesses and commerce, a strong system of public schools will be an essential component of the economic recovery—enabling parents and caregivers to get back to work—while seeking to address the learning loss and trauma many children have experienced.

But how well will schools be able to do this essential job? Because education is the single largest component of every state budget, it will be especially targeted for the cuts that accompany both revenue loss and redirected spending on medical care, unemployment insurance, and other critical needs.  The recovery acts that have been and are being developed in the U.S. Congress will largely determine the answer to this question. The $2 trillion CARES Act sent only $14 billion to public schools—far less than 1% of the total. An additional stimulus bill, expected later this Spring, is likely to be the determinant of public school capacity for this coming year and for years to come.

COVID-19 and Education Funding

The recent economic news is nothing short of staggering—more than 30 million people have applied for unemployment in the past 6 weeks alone. Nearly one in five people who were employed in mid-March have lost their jobs. Combine this record unemployment with the nearly complete paralysis of the retail, food service, and travel industries, and state governments are looking at massive reductions in revenue. COVID-19 has affected not only our economy, but also the way we educate our children. Distance learning will continue to replace in-person learning until at least the end of the school year for a minimum of 45 million public school students in the United States.

This blog explains how falling state revenues and the extraordinary needs posed by the pandemic will affect public education budgets in our country and what will be needed to maintain stability in this critically important sector.

Falling Revenue

The COVID-19 recession is resulting in decreased state income tax, sales tax, and other revenues that substantially fund the state portion of education allocations. This is important because state funding accounts for approximately 47% of education spending. The Center on Budget and Policy Priorities estimates that state revenue shortfalls will ultimately reach about 10% in the current fiscal year, which ends on June 30 in most states, and as much as 25% in FY2021.

To ascertain the impact of budget cuts on public education, we created a model. In it, we assume that state reserves, often referred to as “Rainy Day funds,” can be used to reduce some budget cuts. Our model assumes that Rainy Day funds will offset this year’s cuts by about half. Using conservative assumptions, we project that public education will see budget cuts of 5% in 2019–20 and 20% in 2020–21.

Increased Costs

We also recognize that school funding cuts are happening at the same time that schools are facing increased expenses. Among the additional COVID-19-related costs are:

1. Access to devices and connectivity for distance learning: Some 15% of households with school-age children don’t have Internet access, according to a Pew Research Center analysis of 2015 census data. And in a separate 2018 survey of 13- to 17-year-olds, one in five teens told Pew researchers that they often or sometimes can’t complete assignments because they don’t have reliable access to the Internet or a computer. To ensure that all students are adequately connected to the Internet, our model assumes that devices and connectivity will be needed for 15% of students. An allocation of $500 per student would cover the cost of an inexpensive device ($300) and high-speed Internet subscription ($120), as well as training, software, or other expenses ($80). 
2. Additional food services for students from low-income families: Many districts have increased their food service programs to help address the needs of their students for dinners and food over weekends. In our model, we assume that schools need to provide their students with 20 additional days of food services to help them through the end of this school year and the beginning of next year.
3. Expand learning time to deal with learning loss caused by school closures: Because of the abrupt ending of in-person learning and the move to distance learning, there is a concern that students could suffer a “COVID-19 slump.” To prevent this slump, especially for our most vulnerable student populations, schools will need to provide added supports, including some form of extended learning time. Our model assumes that districts will provide half of their students with extended learning time, equivalent to 20 school days. This extended learning could include summer school, an early start to the 2020–21 school year, and extended day or weekend programs.

These are just a few of the additional costs associated with this pandemic. Schools will likely also need to increase investments to meet the social, emotional, and mental health needs of their students who will be struggling with the stress and trauma of this pandemic and who have been largely isolated from their peers and other adult support systems for some time.

How Much Money Will Schools Need to Maintain Stability in Staffing and Services?

LPI has estimated the effects of these increased costs on school funding and staffing nationally and for each state, depending on the state share of education funding and the composition of its teaching force. Our interactive tool can produce estimates with a range of parameters.

Data for this interactive provided by LPI; design courtesy of Education Week. See related story at Education Week.

Here are likely effects, based on a conservative estimate of a 5% decrease in state funding for education in FY2020 and a 20% decrease in FY2021, combined with the effects of increased costs.

This model does not examine how state cuts will affect individual districts, but we do know that not all districts will be affected in the same way. Wealthy districts with high levels of local property tax revenue will be less affected by the downturn, as these revenues are more stable in the short run than income and sales taxes. Low-wealth districts that rely more on state revenue will be hit particularly hard by this recession, as they were in the last recession. These low-wealth districts are the most likely to see large losses of programs and teaching positions.

How Might State Budget Cuts Affect Teaching and Other School Positions?

We can also estimate the effects of declines in state contributions to education on the number of teaching and other school positions.Assuming that layoffs would likely occur largely based on seniority (and given that 10% of teachers nationally are beginning teachers), we assume that the first 10% of layoffs will be beginning teachers’ salaries and that additional layoffs will affect more experienced teachers, for which we use the average salary. These positions may include guidance counselors, social workers, school psychologists, and mental health professionals who are and will be especially important during and after this crisis. At a 20% decrease in state funding alone, we project a loss of more than 450,000 school positions, or 12.2% of the nation’s education workforce—a far larger number than was lost in the last recession. If there were a 20% decrease in both local and state funding, as we projected in the above table, the loss of teachers would be nearly twice as great. You can calculate the losses to the educator workforce under different state-level funding assumptions in your state using this interactive tool.

According to the U.S. Department of Education, the $97.4 billion in the American Recovery and Reinvestment Act of 2009 saved approximately 275,000 education jobs. Another 120,000 education jobs were lost after the funds in the Recovery act ran out. On average, states took at least 6 years (from 2008 to 2014) to recover the ground they lost in education funding, and at least half did not return to the funding levels they had experienced in 2007 until several years later.

The following numbers take into consideration funding already provided under the CARES Act.

Difficult Times Require Strong Responses

If budgetary projections are correct, the hit to education spending over the next 2 years will be two and a half times worse than the lowest point of the last recession. And while we all hope that our economy turns around quickly, it may take up to 5 years for state budgets to return to full strength, as was the case during the last recession. States and districts alone cannot deal with the fallout from our current economic problems. For schools to weather these challenging times without dramatically affecting our students’ education and, as a result, our nation’s economic welfare, states and districts will need assistance from the federal government. Absent that help, it’s not clear that schools will be able to do the job they want—and we need them—to do. With additional federal investment that stabilizes schools for the year to come, along with the continued hard work of our public school employees, we will be able to get through this and emerge a stronger nation.