In Schoolhouse Burning, published in 2020, constitutional scholar, Derek Black summarizes the fiscal condition of school districts a decade after the 2008 Great Recession: “Before the recession of 2008, the trend in public school funding remained generally positive… Then the recession hit. Nearly every state in the country made large cuts to public education. Annual cuts of more than $1,000 per student were routine.” But the recession wasn’t the only cause of money troubles for public schools: “(I)n retrospect…. the recession offered a convenient excuse for states to redefine their commitment to public education… By 2012, state revenues rebounded to pre-recession levels, and a few years later, the economy was in the midst of its longest winning streak in history. Yet during this period of rising wealth, states refused to give back what they took from education. In 2014, for instance, more than thirty states still funded education at a lower level than they did before the recession—some funded education 20 percent to 30 percent below pre-recession levels.”  (Schoolhouse Burning, pp. 31-33)

And in, A Wolf at the Schoolhouse Door, published in 2021, Jack Schneider and Jennifer Berkshire warn readers about the same fiscal conditions: “Almost every state reduced spending on public education during the Great Recession, but some states went much further, making deep cuts to schools, while taking aim at teachers and their unions… Moreover, states including Arizona, Kansas, Michigan, and North Carolina also moved to permanently reduce the funds available for education by cutting the taxes that pay for schools and other public services.” (A Wolf at the Schoolhouse Door, pp. 35-36)

These warnings are why I worry about press reports quoting the corporate school reformer-economist Marguerite Roza, of Georgetown University’s Edunomics Lab, worrying (here and here) that Congress has not imposed enough regulation of how school districts can spend the mass of one-time COVID-19 American Rescue Plan relief dollars released by Congress last spring. While Roza advocates for innovation instead of basics like small classes and facilities repair, public schools across the United States entered the COVID-19 era far behind—many with crumbling buildings, others short of teachers and counselors, and others lacking libraries, school nurses, and art and music programs. The only exceptions are the school districts in wealthy exurbs which can tax their citizens at high rates to enrich their own local schools.

I think local school superintendents and elected school boards— the people closest to each school district’s challenges—are best positioned to identify and prioritize what needs to be addressed with this year’s infusion of COVID relief funds.

To their credit, these same reporters also investigate why school districts cannot afford to worry about Roza’s advice. For Chalkbeat, Matt Barnum describes “School officials debating how to balance what students need now with their balance sheets down the line—and whether it’s responsible to use relief money to add large numbers of staff.”  After all, when this money runs out—Congress has given school districts three years to invest the COVID-19 relief dollars—a school district may not be able to raise enough funding from state and local tax revenues to sustain the employment of recently hired, salaried staff.

For the Associated Press, Collin Binkley and fellow reporters explain: “The Associated Press, relying on data published or provided by states and the federal government… tallied how much money was granted to nearly every district in the country… The AP tracked more than $155 billion sent to states to distribute among schools since last year, including general pandemic relief that some states shared with their schools… Nationwide, high-poverty areas received much more. Detroit received the highest rate among big districts at more than $25,000 per student. It was followed by Philadelphia, with $13,000 per student, and Cleveland, at more than $12,000.” COVID relief dollars are being distributed by Congress according to the Title I Formula, which prioritizes federal dollars for school districts that serve concentrations of very poor children.

The AP‘s reporters devote considerable attention to Detroit and the plans of the district’s relatively new school superintendent, Nikolai Vitti, appointed when the district was finally returned to its elected school board after being nearly bankrupted by years of state takeover under Governor Rick Snyder, who appointed emergency fiscal managers for the purpose of cutting costs.  Darnell Earley, for example, was appointed to manage Detroit’s schools after he left Flint, where, as that city’s emergency manager, he cut costs in the city’s water program and created the lead-poisoning water crisis.

Vitti, who just earned a high rating from his school board for his handling of last school year during COVID-19, is featured in the AP‘s story about the almost desperate choices facing school superintendents as they decide how to invest COVID-19 relief dollars in schools suffering from staffing shortages and delayed maintenance:  “In Detroit, that means fixing buildings with crumbling ceilings and mold infestations… The district is using some of the government money to hire tutors, expand mental health services, and cut class sizes.  But at least half of its $1.3 billion windfall is being set aside to make long-neglected repairs. ‘For decades, we have been inequitably funded to deal with the enormous needs that poverty and racial injustice have created in our city,’ Superintendent Nikolai Vitti told the Associated Press in an interview. ‘Now with the COVID relief, we’re going to be able to put a significant dent into the challenge.’… In Detroit, federal money will be used to continue hazard pay and teacher bonuses that the district started offering last year. Vitti said teaching is harder in the city because of its deep poverty, and he wants teacher pay to reflect that.”

The Schott Foundation for Public Education argues that using COVID relief dollars for delayed school building maintenance is urgently needed—something that has been highlighted by inequity in schools’ capacity to adequately ventilate buildings to protect children and teachers from the spread of COVID-19: “Exposure to indoor pollutants at schools is also disproportionate by race.  Black students are 16% of all public school students, but more than a quarter of them attend schools with poor air quality.  52% of all students are white, but only 28% of them attend schools with the worst air quality… To combat COVID-19, federal and state governments have allocated hundreds of billions of dollars, including large sums to improve school infrastructure. And fortunately, actions taken to minimize the pandemic threat in schools will also address these longstanding air quality problems: modernized ventilation ducts, heating in the winter, cooling in the summer, HEPA filters, and less crowded classrooms will leave students and educators in even healthier environments than they had in 2019.”

How serious is the fiscal crisis for some school districts? For the NY Times, Eleni Schirmer describes the pileup of long term indebtedness. For Philadelphia and Chicago, for example, paying debt service has taken precedence over reducing class size, hiring more counselors and maintaining buildings. Schirmer reports: “For Philadelphia teacher Freda Anderson, setting up her classroom involves clearing plaster, dust and paint chips from tables, chairs and desks… Years of deferred maintenance have caused dust and paint chips to scatter across the room… A report released this spring revealed an asbestos epidemic creeping through Philadelphia schools. During the 2019 school year, 11 schools closed because of toxic physical conditions; a veteran teacher is suffering from mesothelioma, a lethal disease caused by asbestos.”

Here is how school district indebtedness works: “To keep the lights on, the School District of Philadelphia—like thousands of districts across the country—has increasingly turned to debt financing: They issue bonds to borrow money from financial markets… Investment funds purchase these bonds, thus lending the funds to local governments or school districts.”

But there is built in inequity that places the heaviest burden of school district debt on the school districts with little property tax base and populations living in poverty: “Moody’s Investor Services, a pre-eminent credit-rating agency, bases a school district’s credit score on the district’s existing property value and residential income. The poorer the school district, the more it pays in interest and fees to borrow—from the point of view of creditors, such schools are ‘riskier.’  The results of this process are unsurprisingly classist and racist… What starts as public schools’ budget shortfall ends with financial sector profits. The interest that creditors take from lending money to municipal governments is also, conveniently, tax exempt, rendering municipal bonds into a kind of onshore tax haven.”

What is clear from all this reporting is that the competing needs school superintendents must manage differ from place to place, but they are complex and in many cases critical. Yes, Congress has imposed little regulation on American Rescue Plan relief dollars for school districts. But years of sometimes catastrophic underfunding are forcing school administrators to invest COVID relief dollars in the most basic requirements for building maintenance, staffing and programming.

The debt-service problem only further exacerbates the desperation of some of the nation’s largest school districts that serve concentrations of children living in poverty.  In Chicago, with mayoral governance of the Chicago Public Schools, Mayor Lori Lightfoot’s must balance political calculations around her civic and educational responsibilities. Lightfoot has said she will respond to creditors instead of reducing class size, hiring school social workers, or repairing buildings. Schirmer explains: “In the short term, the Biden administration’s agenda could provide a much-needed cash injection into the schools… However, even this aid is vulnerable to private sector bond market obligations… Mayor Lori Lightfoot promised the city’s creditors that she would use the money to pay debt service.  In response, community organizing coalitions, including the Chicago Teachers Union, have demanded that the mayor use relief funds to help people—not banks.”