School Budgets Soar 16% Over 2 Years, But Experts Warn of ‘Bloodletting’ to Come

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As schools nationwide receive federal COVID relief funds, budgets have increased by more than 16% in the past two years, according to an analysis of over 100 districts.

The average increase was 10.8% from 2020-21 to 2021-22, and 16.5% from 2020-21 to 2022-23. This analysis, published by Burbio, a K-12 policy tracker, examined the budgets of 118 large school systems.

Nearly 1 in 5 district budgets within that group grew by over 25% since 2021.

Chad Aldeman, the policy director of the Edunomics Lab at Georgetown University, stated that many of these investments directly benefit students. School systems have used these funds for tutoring programs and summer learning experiences to help students catch up after significant learning disruptions caused by COVID, such as virtual learning and quarantines. Other districts have allocated the funds for much-needed infrastructure improvements, including HVAC systems for improved ventilation and modernizing their school bus fleets.

However, Aldeman warns that once the American Rescue Plan money expires in 2024 and with an expected decline in student enrollment of over 5% by 2030 due to decreasing birth rates, schools must prepare for a period of financial hardship by 2024-25, when budgets will need to readjust.

Alberto Carvalho, the superintendent of the Los Angeles school system, which has experienced declining enrollment for over a decade, predicts a near 20% drop in total spending from 2022-23 to 2024-25—from approximately $11 billion to about $9 billion—largely due to the end of stimulus funds. Carvalho describes this impending fiscal crisis, combined with enrollment declines, as an imminent "Armageddon."

Daniel Domenech, executive director of the American Association of School Administrators, states that most school leaders have been cautious in their spending of stimulus funds, anticipating the fiscal cliff in 2024-25. They have avoided using funds in ways that could create problems down the line, such as increasing teacher salaries or hiring additional staff who may need to be laid off later.

Domenech, who served as a school superintendent in Long Island, New York for 20 years during a period when the region experienced a 40% decline in students, highlights the difficulty of closing schools. While families understand the need for consolidation to prevent soaring taxes, they typically prefer other schools to close rather than their own. However, school leaders can view the process of "right-sizing" schools as an opportunity to balance student populations, promote racial and socioeconomic integration, and mitigate disruptions by investing in resources like guidance counselors and transportation improvements.

Aldeman advises superintendents not to delay the consolidation process in response to enrollment declines. While school closures will inevitably cause disruptions, policymakers can alleviate some of the associated challenges with investments in additional guidance counselors and enhanced transportation systems.

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