House Bill to Implement Biden COVID-Relief Plan Includes Much-Needed K-12 Funding

American schools sorely need additional funding to ensure that they can reopen safely and meet students’ educational needs, and the House Education and Labor Committee will consider legislation today to implement President Biden’s proposal for $130 billion in new, flexible funds for school districts over the next three-and-a-half school years — which would be the largest-ever one-time federal investment in K-12 education.

This legislation, which would be included in a budget reconciliation bill that reflects the President’s broader proposal for economic relief, also includes important provisions to protect schools, especially those serving large numbers of poor children, from disproportionate state funding cuts. That is entirely appropriate in light of school funding needs — particularly schools’ need to make up for lost learning time — and the likely impact of funding decisions on student outcomes and the economy.

Historically, K-12 schooling in America has been funded almost entirely by states and localities.Historically, K-12 schooling in America has been funded almost entirely by states and localities. Currently, states provide 47 percent of the funding, localities provide 45 percent, and the federal government provides the rest.^[1] COVID-19, however, has already forced states to cut education funding and created enormous financial and educational challenges that states and localities will be hard pressed to meet over the next several years without federal assistance.

Meanwhile, state and local tax revenues that fund schools — which are barely adequate even in the best of times — have been hammered by the deep economic downturn. State and local governments face an estimated $300 billion cumulative revenue shortfall through fiscal year 2022 that, if not offset with additional federal funding, will result in additional school funding cuts.^[2] That’s because K-12 education comprises about 26 percent of state budgets and, when state policymakers must meet their annual balanced-budget requirements, they’ll find it extremely difficult to fully protect K-12 funding.

So far, federal aid has been insufficient to support schools through the pandemic. The CARES Act of last March provided $13.2 billion for K-12 education and the relief package of December provided another $54 billion.^[3] Those sums are significant but, mounting evidence suggests, schools will need far more to pay for the costs of distance learning, safe in-person instruction, caring for the physical and mental health of returning students, and — most significantly — making up for learning loss.

Even before COVID-19, schools had endured years of inadequate and inequitable funding. In 2016, 24 states were funding K-12 schools less than before the Great Recession of more than a decade ago, on a per-pupil basis after adjusting for inflation.^[4] Many school districts never recovered from the layoffs they imposed at that time; when COVID-19 hit, schools overall were employing 77,000 fewer teachers and other workers even though they were educating 1.5 million more children. Moreover, funding levels are lowest for schools that serve the greatest shares of students from low-income families and students of color — even though inadequate funding hurts the education of those students the most.^[5]

Research has shown that money matters in education. Adequate school funding helps raise high school completion rates, close achievement gaps, and make the future workforce more productive by boosting student outcomes.^[6] The Great Recession, in particular, hurt students’ educations, driving down test scores and college attendance rates.^[7]

Schools face hefty price tags to safely reopen schools even as they continue to cover the costs of distance learning:

• Closing the “digital divide” to ensure that all students and teachers have access to the devices and connectivity they need will cost up to $12 billion over 12 months, plus up to $6 billion for each additional year, according to a study by Common Sense Media and the Boston Consulting Group. ^[8] (Many schools have already diverted money toward these costs because of the urgency, but that took funding away from other critical needs; more investment is needed to ensure that gaps are further closed even as students return to in-person learning.)
• Schools should open for in-person instruction only under safe conditions, which will require investments in personal protective equipment, custodial staff, HVAC systems, and additional transportation costs. The Centers for Disease Control and Prevention estimates that safely operating in-person schools could cost as much as $12.6 billion for items like plexiglass shields and hand sanitizer, $12.7 billion for custodial staff time, and $19 billion for transportation. And those figures are just for the current school year; schools will undoubtedly need to extend some costs into the next school year as well.^[9]
• A quarter of schools have neither a full-time nor a part-time school nurse, and most schools lack the counselling support they will need to help students navigate the mental-health challenges of returning to school; adding needed nurses and counsellors will cost several billion dollars per year.^[10]
• Many schools will need to add staff and/or portable classrooms to reduce class size to meet social-distancing guidelines; a one-year, 10-percent increase in staffing would cost schools $35 billion, according to the American Federation of Teachers.^[11]

Perhaps the most significant cost — and the hardest to estimate — will be making up for lost learning time. Schoolchildren have lost many months of in-person learning time that — if not made up — could deliver a lasting blow to their long-term earning potential and America’s economic competitiveness, and it could exacerbate longstanding disparities in educational outcomes between white students and students of color.^[12]

Distance learning hasn’t worked well for many children, and some aren’t participating at all. When students don’t show up for school, of course, their learning suffers.^[13] McKinsey & Company estimated that students on average will likely lose nine months of learning by the end of the 2020-21 school year. Students of color, who face particular barriers in education partly due to the historical legacy of discrimination, may well have lost a full year of learning due to the pandemic.^[14]

Researchers have identified two key strategies that schools likely will employ to overcome this deficit: (1) a broad-based program of extended learning time, which might include lengthening the school day or the school year; and (2) an intensive program of “high-dosage” tutoring for students who have the furthest to catch up.

A program of extended learning that provides 20 extra days of schooling for half of students would cost $35.5 billion for the 2020-21 school year, according to the Learning Policy Institute.^[15] McKinsey estimates a cost of $66 billion for high-intensity tutoring over one year for half of schoolchildren. And making up that scale of learning time will not happen in a single school year.^[16] Education Resource Strategies, a nonprofit education research firm, estimates that in districts that serve high concentrations of students living in poverty, Black and Hispanic students, and English-language learners, it could take five years of extended learning time and tutoring to put students back on track at a total cost roughly $10,000 per student, suggesting nationwide costs that could run into the hundreds of billions of dollars to make up for COVID-related learning loss.^[17]

Recognizing those needs, the legislation that the House Education and Labor Committee will consider today requires that at least 20 percent of the funds address learning loss. Beyond that, the legislation provides flexibility in how states, school districts, and schools may spend the funds, recognizing that each place will vary in the costs it faces. But it includes two important requirements.

One is a “maintenance of effort” provision to limit states’ ability to reduce their own funding levels for education below pre-pandemic levels as a share of the overall state budget. This ensures that school funding is not cut by a larger share than other areas of the state budget, preserving more funding to cover increased costs of coping with the pandemic and learning loss.

Perhaps even more importantly, the bill also includes “maintenance of equity” provisions that require states to avert cuts specifically to schools and school districts with high numbers of poor children. Specifically, one such provision protects districts with higher-than-average poverty rates from disproportionate state funding cuts; another such provision protects the highest-poverty 20 percent of school districts from any state cuts below 2019 levels; a third provision requires that school districts protect state and local funding for individual schools with high poverty rates. These provisions, taken together, should help address the problem from past recessions that the educations of poor kids suffered the most because low-income school districts are often the most dependent on state funding.

The proposed $130 billion in additional K-12 funding may even fall short of COVID-induced education costs, particularly if states and localities make a commitment to the investments needed to overcome the learning loss students have suffered. Over time, states and school districts may need to raise additional funds for education. Raising such funds can be difficult but not impossible; Arizona voters in November voted narrowly to undo years of budget cuts and raise nearly $1 billion a year for K-12 education by raising taxes on high-income earners.^[18] Their ability to do so will be limited, in the short term, by a weak economy that is reducing revenue from broad-based taxes, and by the fact that — unlike the federal government — states can’t borrow to cover their costs. At least in this moment, therefore, a big new investment by the federal government is the right way to go.