DeVos Released $3 Billion in Education Emergency Funds to State Governors. Too Bad It's Not Enough.

On April 3, Governors Asa Hutchinson and Jay Inslee sent a letter on behalf of all the nation’s governors to Education Secretary Betsy DeVos pleading with her to release the education funds embedded in the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). 

The total stimulus bill, signed on March 27, comes to $2 trillion; embedded within it is the “Education Stabilization Fund (ESF),” worth $13.5 billion, and within that $13.5 billion, nesting like a matryoshka doll, is $3 billion that goes directly to state governors for K-12 and higher education emergency support grants. 

In the letter, the governors call the ESF “a lifeline to educators and students during this time of unprecedented uncertainty.”

Secretary DeVos has responded with surprising alacrity. Yesterday Education Week reported, she released the following statement:

At a time when so many school boards and superintendents have shut down learning for the balance of the school year, I want to encourage each and every governor to focus on continuity of education for all students. Parents, families, teachers, and other local education leaders are depending on their leadership to ensure students don't fall behind.

Um, because the governors were the hold-up? Never mind: Fifty governors now share in the secretary’s largesse and will happily fill out the seven-page application.

Just one problem: [pullquote]The total $13.5 billion Education Stabilization Fund won’t come close to alleviating the pain.[/pullquote]

According to Marguerite Roza, director of the Edunomics Lab at Georgetown University, the 2020-2021 outlook for school district finances is “devastating.” This year schools are okay—they’ve largely recovered from cuts they made during the Great Recession and they’ve been saving money the past weeks on utilities, transportation and substitute teachers. 

But next year, “when state revenues have been decimated by the economic shutdown”—loss of income taxes due to unemployment, loss of state sales tax revenue due to lack of consumerism,  the use of available revenue for public health necessities—school funding allocations will plummet.

In a slide deck produced for the Edunomics Lab, Roza gets more specific: Simply put, states will “have fewer funds for districts.” The teacher-turnover trend will become a relic of pre-pandemic times (given the loss of jobs in other sectors) and so district payrolls will go up: Union contracts link higher pay to years served. More students will live in poverty with attendant higher needs and students who now attend private schools may enroll in public schools due to lower household income. Healthy pension funds will ail and unhealthy ones (looking at you, New Jersey and Illinois) will go belly-up. 

How bad will it get? According to an analysis by Andrew Ujifusa, in a scenario where every state has to endure a 7% cut in school funding (you can toggle the bar from 1% to 20%; I chose 7% because that’s, on average, less than the cuts endured during the Recession), [pullquote]the Education Stabilization Fund will leave 49 of 50 states with a reduction in cost per pupil.[/pullquote] Only Mississippi comes out unscathed, with an increase per pupil of $21.44.

Ujifusa cites another analysis by school finance consultant Michael Griffith, who finds that the K-12 relief package signed by Trump “amounts to less than 2% of all spending on public schools.”

Not looking so educationally-stable, are we?

But thanks anyway, Betsy.