Education Leaders Examination of Financing: Insights Gained from Comparing ARRA and ARPA
In the aftermath of the Great Recession and more recently, the COVID-19 pandemic, K-12 education in the United States has received significant stimulus funding. This article explores how districts have utilised the American Recovery and Reinvestment Act (ARRA) grants, the Temporary Education Jobs to Save Educators (Ed Jobs) funds, and the American Rescue Plan Act (ARPA) funds.
The ARRA, passed in 2009, provided funds for various sectors, including K-12 education. Districts used or planned to spend at least a portion of their Education Stabilisation Fund (ESF) on non-personnel activities such as vocational courses, technology, and new construction. However, all Ed Jobs funds were mandated to be spent on personnel-related activities. The search results do not provide information on what US school districts learned from ARRA grants or how these lessons are influencing their use of ARPA grants.
During the ARRA era, districts used almost all of their ESF and Ed Jobs funds to maintain existing public education services and activities at prerecession levels. Approximately two-thirds of the 22 districts spent or planned to spend all of their ESF funds on personnel-related activities such as salaries and benefits for teachers and other staff. One district used all of its ESF funds for utilities.
The pandemic funding rounds came at a different point in the economic cycle, when the markets were shaky but the recession had not started. To avoid funding cliffs, many districts used stimulus funds for purchases that required one-time or short-term outlays, often for professional development and technology.
The American Rescue Plan Act was not the first time K-12 education has received a significant amount of stimulus funding. ARPA funds were provided when spending was at an all-time high, causing supply shortages and increases in the housing and car markets. Districts used Recovery Act Title I or IDEA funds for regular grant expenditures to ensure they spent Recovery Act funds within the grant period.
It's important to note that a fiscal cliff is expected in September 2024, and the context of the economy and education is different than it was when the ARRA was passed. Inflation is currently at a 40-year high, and the government is raising interest rates to slow down spending. The Federal Reserve is trying to balance the need to reduce inflation without causing a prolonged recession.
During the Great Recession, state revenues were falling, and many school districts were funded by property taxes and sales taxes, which decreased in the recession. The pandemic also presented unique challenges, leading to the need for additional funding to support remote learning and safety measures.
In conclusion, while the use of stimulus funds in K-12 education has evolved over time, the primary focus has been on maintaining existing services and activities at prerecession levels and making one-time purchases to avoid funding cliffs. As the economy continues to change, it will be interesting to see how districts utilise future funding to address the needs of students and educators.
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