Perfect Storm: Toughest Year Ever Ahead for Schools

April and May were the worst and weirdest economic month in modern history. The self-induced economic coma disabled half the workforce and threw the other half into a frenzy of modified (and often dangerous) activities.

With school buildings closed, and various attempts at supporting remote learning underway, the last six weeks were the strangest in modern education history.

As perplexing as this spring has been, the next school year could be the toughest ever. It looks complicated and challenging. Here’s the problem: costs will be higher and revenues will be lower.

Revenue is down dramatically in every state, especially states that rely on sales tax. As a result, several big-city school districts are now projecting 15 to 25 percent cuts in overall revenues going into the next school year.

Over the last 20 years, often in an effort to boost equitable funding, the majority of states have boosted their percentage of funding (about half the states provide half or more of the funding for schools). Dr. Marguerite Roza, Research Professor at Georgetown University and Director of Edunomics Lab, notes that reduced revenue in states that rely heavily on sales tax (Washington, Tennessee, South Dakota, Nevada, Arizona, Louisiana) is likely to hurt school districts.

The Federal CARES Act included $13.5 billion pushed out to districts that have a large percentage of low-income students. That sounds like a lot but it’s a few hundred bucks per student–nothing like the cuts big districts serving low-income students are likely to see next year.

What makes this the perfect storm is that it happened suddenly and dramatically increased the level of challenge and cost for school districts. There are at least six reasons school will cost more next year:

1. Addressing remediation needs: Come August, most learners will be behind and efforts to help them catch up with learning expectations will cost more. Starting early (for some or all learners), providing extra time and support,

2. Addressing trauma: many students will have experienced physical and emotional trauma. Providing counseling support and extra youth and family services will cost more

3. Preventative measures: time- and place-shifting learning to achieve social distancing (including longer days with staggered cohorts, learners on alternating days, and learners in temporary facilities) will cost more. Transportation to support time- and place-shifting will cost more.

4. Dual programming: when necessary, schools and districts may need to provide mitigation for groups of students and staff. That could mean running remote and onsite programming simultaneously. All the forms of risk mitigation for staff and students will cost more.

5. Additional hygiene: keeping school extra clean will cost more. Keeping transportation, food services, and support services extra clean will cost more. Closing and reopening and sanitizing schools will cost more.

6. New expectations: innovating to meet new learner and parent expectations will cost more.

Many parents will want to stay more involved with heightened communication. Some learners that enjoyed more voice and choice and self-directed learning will seek new options. Some parents and learners will want new smaller more personalized hybrid options. New programs

It’s going to be hard to figure out what to do and how to pay for it. All of these issues will result in more legal and accounting fees. All will require heightened coordination with regional, state and federal authorities.

The next school year could be the most challenging ever for school leaders and teachers. Only the federal government can address the massive shortfall in revenue and spike in expenses to cope with the health crisis.

Steering into the Storm

Dr. Roza, who for 18 months has been warning districts to get ready for a downturn, anticipates “anywhere between 5-20% impacts on state budgets which could bring 1- 8% impacts on districts.” She adds, “The financial implications depend on how long states constrain their economies and whether/how much stimulus states will get.”

With the sudden evaporation of tourism, Hawaii Gov. David Ige proposed a 20% pay cut for teachers and a 10% reduction for other public workers, such as nurses.

Roza urges districts to freeze hiring, cut costs, and protect financial reserves. She urges them to keep communicating with stakeholders about trade-offs.

School districts should look for cost savings in every department, revisit planned raises, but avoid across the board cuts and instead be more surgical in cutting where they can and remaining flexible for what could be the most challenging year ever.

For the last 30 months, America Succeeds has been calling this the Age of Agility and calling for agile educators and systems. Now more than ever, it will be critical for school districts to be agile in their response to the crisis. And it will be critical that Congress fills the gap between lower revenue and higher costs.

For more, see:

• Preparing to Reopen: Six Principles That Put Equity at the Core
• How to Reopen Schools: A 10-Point Plan Putting Equity at the Center
• Eric Tucker on Reopening Schools with Equity in Mind (podcast on the 10 Point Plan for reopening schools)