Lessons and Policy Recommendations

This research yielded some important lessons about how the framing, process, and structure of school funding can affect its usage and impact. These lessons fell into four general categories: the purposes of the funding, and how it should shape our assessment of ESSER’s success; how to effectively provide such large funding allocations; considerations related to timing, including spending deadlines and simultaneous funding of different government entities; and how to successfully support school districts with flexible dollars.

It is important to remember that, at the time of this writing, we are not yet done with the effects of the COVID-19 pandemic, and ESSER dollars are still being spent. As we consider the strengths and shortcomings of this relief funding, we should note its success at budget stabilization for districts and its role in the larger economic stimulus effort, as well as its vital support for health and safety expenditures and for remote learning. Policymakers can and should recognize these achievements even as they bring appropriate scrutiny to districts’ ESSER-funded efforts to promote learning recovery and student well-being and to address other school concerns.

The ESSER experience is also instructive for policymakers considering how to best structure specific school funding allocations going forward.

Big allocations require time to spend well. Most recipients of large grants would benefit from a spending timeline that is commensurate with the size of the award. Additionally, certain priorities may be inherently longer-term those priorities would be better served by extended spending deadlines.

When school districts receive a large allocation of one-time funds, it may not be practical to spend all the money on non-recurring costs. Districts in this situation may have to use a good portion of those dollars on staff and accept possible future layoffs as the price of making effective use of the funds. When policymakers judge district decision-making, they should make room for such tradeoffs.

Large infusions of funding offer districts rare opportunities to address long-standing problems, like persistent academic gaps or longtime deferred maintenance. As long as these problems bear a meaningful connection to the purpose of the grant, districts should not be criticized for investing in such efforts. Attempts to silo new grant expenditures from the rest of the budget or from the preexisting circumstances of the school district will only result in illogical or wasteful spending.

Big distributions also carry a large administrative burden. In order to facilitate efficient and effective spending, districts must have the finance staff needed for procurement, processing, and reporting. When policymakers make large grant allocations to school districts, they should explicitly allow a set amount of grant funds to be used for administrative purposes, providing direction and political cover to districts to make such investments.

There is very little redundancy in school district budgets; a district is rarely able to experiment with a new practice while maintaining current operations. Because limited-time funds are thought of as “extra,” districts are more likely to use them to innovate. They can also dedicate money for the evaluation of new initiatives. However, in districts without leadership ready and eager to implement fresh ideas, such funding is also more likely to be wasted, since it cannot be relied on for core expenses. Limited-time funding therefore is best paired with strong state or federal guidance about effective, high-impact strategies.

When funding is provided for an emergency purpose, it is important for money to be made available quickly, and, if appropriate, to permit grant funds to be applied retroactively. More broadly, practical circumstances—whether these are staffing challenges, problems with the availability of supplies, or other challenges—may affect the speed with which districts are able to make use of grant funding. Policymakers should allow districts to amend grant plans in response to changing circumstances, and regulators and evaluators should be conscious of the ways in which such circumstances may shape spending choices.

Simultaneous, purpose-aligned funding of different government entities with different capabilities that are responsible to the same population—such as overlapping counties, towns, and school districts—can promote collaboration and encourage more holistic efforts to serve a community and its children.

Conversely, simultaneous funding of many school districts at once can foster competition. When districts compete in hiring and purchasing, higher-need school districts often lose out. While policymakers are accustomed to thinking about equity in education funding amounts, they do not typically consider equity when that funding. Sometimes, immediate, emergency expenditures are necessary, and all districts must be funded at once. Non-immediate or longer-term funding initiatives, though, could prioritize higher-need school districts in the disbursement schedule, in order to help them be first in line for vital staff, materials, and services.

Spending flexibility can be extremely beneficial. Different strategies may work more or less well in different contexts, and district leaders appreciate the ability to prioritize the expenditures that are most important for their school communities.

However, it is not enough to grant flexibility with an individual funding stream. The use of the funds may be hampered by preexisting or general restrictions and processes. Where possible, federal and state lawmakers should waive cumbersome requirements that are separate from, but applicable to, the money being provided. Federal and state officials must also provide prompt, clear, and consistent guidance about how money can and should be used, and they should err on the side of allowing a broader range of uses to promote a focus on creativity and effectiveness over compliance.

Because flexible funding puts local choices front and center, its impact hinges on local competence. Discretion is a muscle that must be exercised. In school systems where the general budget model is flexible, school and district leaders have more experience with this kind of spending and are more likely to be prepared for it. States and districts should consider implementing more flexible funding policies to allow for more need-tailored spending and to promote the development of that muscle. To foster effective spending in districts where leaders are unused to exercising discretion, policymakers should set broad but clear instructions about the purpose of the grant as a whole or of portions of the money.

One rare form of flexibility in school funding is the ability to use a single pot of money for both operational and capital purposes. This ability should be far more common. It matters greatly for student learning and well-being whether the school environment is safe, healthy, well-maintained, and properly equipped. District and school leaders should be more often able to rank their spending needs—operational and capital—on the same priority list. When grant funding is available for capital use, spending deadlines should be realistically set for such projects; amounts should be sufficient to support true facilities improvements rather than stopgap repairs; and in the case of federal grants, districts should receive support in complying with federal requirements for construction projects. Explicit federal and state guidance would also be helpful in promoting the notion that spending on school facilities can be important investments in student learning.