Funding Cliff

How will school districts respond to the funding cliff?


The past two years have been some of the most difficult for school districts to respond to external factors, such as the COVID-19 pandemic. With this, funding has been stretched thin to get resources to the students and teachers who need them the most. The federal government has provided school districts leniency and flexibility to deal with the new educational landscape. However, K-12 systems still have a lot to manage as their emergency stimulus aid will likely end sometime in the near future.

Learn more about how the upcoming funding cliff will impact school districts and how they will prepare for it.

2022 funding 

For the fiscal year 2022, the Department of Education was granted about $76.4 billion. This was the most significant increase for federal education programs in just about ten years, compared to the beginning of 2021, with this year’s $2.9 billion increase. For example, the Safe Schools and Citizenship Education programs saw a massive increase over the previous year, about $361 million compared to $217 million in 2021. 

Federal stimulus 

School districts have been using their allotted federal stimulus dollars in many different ways in response to the pandemic. Some schools have bought new technology and equipment to help with the remote learning process, while others have replaced their entire ventilation systems to make their buildings safer for students. 

Funding Cliff
Educators planning how to use the funding.

Since the beginning of 2020, when the pandemic first started, school districts have received about $190 billion of emergency funding from the federal government. The most recent influx of cash assistance is about $123 billion through the American Rescue Plan. However, it’s important to note that this money must be spent by fall 2024. 

How will schools use this funding? 

Because there is a timeline to use the money from the government, school districts are rushing to determine the best use for the funding. In addition, there are current programs in some places that are being exclusively funded by the emergency stimulus, which will need alternate funding sources once the stimulus money runs out. 

Sustainably maximizing these funds is one of the most challenging parts of the looming funding cliff. For example, the Elementary and Secondary School Emergency Relief Fund (ESSER Fund) must obligate funds by September 20, 2022. This means that some of the money has to find a home soon. Here are some examples of what ESSER funds can be used for:

  •  Personal protective equipment (PPE).
  • Cleaning and sanitation materials.
  • Supplies to maintain “school operations during and after the COVID-19 pandemic”. 
  • Programs that support remote learning for all students. 
  • Focusing some funding on disadvantaged or at-risk students. 


Creating a soft landing for the future funding cliff

Some essential considerations can help create a buffer for the incoming funding cliff. First, instead of creating more problems after the funding goes away, focus some of the funding on necessary one-time costs. 

It’s best not to rely on the potential for funding extensions, despite this possibility. However, some states are taking steps to use local funding to help ease the funding cliff. There are some potential issues with this, though, as the national economy continues to face some challenges. 

Some schools are putting their funding in reserve accounts to help in the future when the budgets are a little tighter. However, some of the emergency funding needs to be spent rather than saved, complicating this strategy in some cases. 

According to Chad Aldeman, policy director of the Economics Lab at Georgetown University in EdWeek, “When this money runs out, it’s going to feel bigger and worse than the last time federal money ran out.” 

Funding Cliff
Educators planning a budget.

In the quote, Alderman talks about the last funding cliff in 2009, when $50 billion in aid was delivered to districts through the American Recovery and Reinvestment Act. In this case, there were severe cuts, teachers were let go, and some schools were even shut down. 

A strategy for the future funding cliff

With this previous disaster in mind, schools are hoping to get out ahead of the fallout of this pandemic-related funding cliff. Because the country has such a diverse population, schools, and requirements, every district’s answer will be different. The local and state funding hills vary widely from state to state, so that the budgeting shifts will reflect that. 

A national EdWeek Market Brief survey looked at 374 district leaders and 305 school principals and asked about their plans for federal stimulus spending when it comes to them in the future. 

The survey found that 56% of educators say PPE and cleaning equipment are the most likely category of products where spending will be reduced. On the other hand, 38% said summer learning programs are the next most likely to see cuts. Another popular answer, with 26% of responses, said that district supplemental curricular resources for elementary students would likely see a spending reduction.

Are you looking for ways to spend emergency funding in a productive way? Consider Agile Education Marketing today. 


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