Finance experts warn over school district budgets |
Education finance experts have warned that, beginning in the 2024-25 school year, school districts nationwide will experience a negative impact on finances due to four “atypical financial shocks.” Marguerite Roza, director of Georgetown University’s Edunomics Lab, and her peers, in a webinar Thursday, agreed that events putting districts most at risk are the ESSER "funding cliff," whereby officials using ESSER money for recurring financial commitments via budget backfilling, new hires or permanent raises are most likely to be impacted, and enrollment declines leading to fewer revenues, whereby urban districts, those closed longer during the pandemic, and districts in Northern states are most at risk. Inflation, labor scarcity and new hiring leading to recurring financial commitments were also all underlined to present significant challenges, and districts offering permanent raises that are larger than the usual 1-2% on top of 3% through step or column increases, and those growing their staff rolls, are most vulnerable. An economic slowdown affecting state revenue growth was also presented as a huge risk for districts, and those more dependent on state revenue, or in states more affected by economic slowdowns, will be most impacted by this. “This is where things get really pretty ugly,” Roza said.