Flush With Federal Funds, Schools Face Long-Term Drought

The horrifying school shooting at Robb Elementary in Uvalde, Texas was dominating the news as the Milwaukee school board finalized the district’s preliminary budget for the coming year on May 26.

Just a few weeks earlier, school budget debates were focused on learning loss. Some school officials were pushing the message that students’ mental health was just as important. Now the conversation was dominated by the question how can we keep students safe from gun violence.

After Uvalde, it became painfully obvious that a school resource officer (SRO) with a handgun is no match for a shooter armed with a military style weapon shooting hundreds of rounds in a few seconds. Defenders of gun rights wanted to focus more on mental health. Both enhanced security and enhanced mental health services take lots of adults in school buildings, and that takes lots of money.

Even before the shootings in Texas, the Milwaukee school board was wrestling with where to put money in the budget to accomplish those goals. Student activists with the group Leaders Igniting Transformation came before the Milwaukee school board budget committee asking that money be transferred from school safety personnel to psychological and social services and to other areas that support the wellbeing of students. The same group had pushed the district to end its contract with Milwaukee police in 2020 for SROs.

The Madison Metropolitan School District (MMSD) also removed SROs in 2020. Reestablishing the program became an issue in the April 5 election. Winning candidate Laura Simkin advocated the return of SROs. But Simkin’s issues went far beyond a single issue as she stated on her website: “We should increase the number of student services staff, including psychologists, social workers, special education staff, and counselors.”

MMSD will adopt its preliminary budget on June 27. Neither Milwaukee Public Schools (MPS) or MMSD will reestablish SROs this year. They will hire more adults to work with students to lower conflicts and resolve personal issues students have from the pandemic and challenges they face in the community.

Finding the money to hire those adults right now is not a problem. What comes after is.

After the pandemic hit, schools had to go virtual and invest in laptop computers, ventilation systems, food delivery services and the like with money they did not have. A series of federal grants from the Elementary and Secondary Emergency Relief fund (ESSER) flowed into schools all across the nation. Money could be used for virtually anything related to the COVID-19 pandemic.

Of the $2.4 billion Wisconsin ESSER funds, MPS received $797.2 million (33.4%); MMSD received $70.6 million (3%). Allocations were based upon the number of students each district had living in poverty as measured under Title I.

Fiscal conservatives fear that so much money is flowing into districts so quickly that it becomes almost impossible to spend all the money wisely. Any wasted spending will be seen as a sure sign that these districts are poor managers justifying a tight rein on future increases in state revenues. The reality is that, at the beginning of the pandemic, no one could turn to experts in how to use the money wisely because there were no experts on this deadly virus.

Schools instituted hybrid education. Wednesdays would be used for deep school cleaning while citizens were wiping down cereal boxes they brought home from the store. Later experts determined that such cleaning was not needed and that hybrid education was perhaps the worst option both educationally and medically. Schools did checks at the door and looked for signs of infection not realizing that many COVID-19 positive individuals were asymptomatic.

When COVID-19 dangers subsided, masks came off, classrooms returned to more normal conditions, and a pile of ESSER money was still on the table. Of the $2.4 billion allocated to Wisconsin, nearly $2 billion still remains unspent.

Regulations on how ESSER money may be spent have been evolving as needs change and money remains. School districts have until 2024 to spend the rest.

The Wisconsin Legislature refused to increase state funding to schools in the current two-year budget cycle, on the theory that districts could use ESSER funds to fill the holes in local budgets. For upper-income districts with high property values, the local property tax is the main source for school funding; what the state did with funding had less of an impact. But for other districts, the situation became more complicated.

In May, the Wisconsin Policy Forum published a budget brief on MPS and MMSD entitled Uncharted Waters highlighting the financial dangers ahead.

Right now, MPS may appear to be flush with money but that will not last. MPS receives additional money both from the ESSER funding and a recently passed school referendum of $87 million. Because it is a poor district both in terms of student poverty and low property values, it received the most money in the state under ESSER and its willingness to increase property taxes through a recent referendum meant that it would also receive more state revenues.

For MMSD, the situation was different. The district did receive a fair amount of ESSER funds due to the student poverty level. But because Madison is a property rich district, it actually received less state funding because of its willingness to increase property taxes through its $33 million referendum.

Districts are now faced with possible program cuts due to an inflation rate over 8%. Even property rich districts are feeling the pinch. Many districts are forced to increase pay to the maximum allowed by law at 4.7% just to hang on to present employees, never mind where they will get new hires given the labor shortage that is hitting school districts especially hard.

While MPS has raised salaries by 4.7%, MMSD is considering only 2%. Madison Teachers Inc. (MTI) has bristled at the proposal. “There are laudable aspects to this budget, including increased social worker allocation, expanding to full day 4K, and resources to support family engagement, among additional equity focused initiatives,” the union said in a statement. “However, should this budget pass with less than the full cost of living adjustment, given the increasing workloads and expectations, the message to employees is that we are expected to work more for less. In this highly competitive labor market, MMSD risks losing even more staff by this action…” But the district countered saying it can’t afford the increase; with a larger pay raise, the district might have to cut 87 positions.

Knowing that ESSER funding will last only through 2024, school districts have been more willing to use these funds for staff training related to the pandemic, says Dan Rossmiller, director of government relations for the Wisconsin Association of School Boards. Mental health interventions, which have many causes including some related to the pandemic, are allowed under ESSER funding.

Both MPS and MMSD have pushed to hire new staff to work with students knowing full well that ESSER funding will run out. Those positions may go unfilled because, as Rossmiller points out, there is a shortage of health and education professionals statewide.

MPS board president Bob Peterson says that during the school year that is now ending, the district had 10 openings for school counselors and had to rely on contracted psychologists because of a shortage of district psychologists. “We have openings in virtually every job classification, and that has put a strain on everything from transportation to food services, building helpers to classroom teachers,” says Peterson. “Having a fully staffed school can definitely improve adult to student relationships.”

Even a food service worker might be a mentor to a young student in an elementary school, says Peterson. Food service workers often come from the neighborhood; they might know the family and the child because they live nearby; they might even be related. Just having more adults in the school can make a positive difference.

Milwaukee has more ESSER money to work with than Madison and will both increase wages and hire more staff even knowing that the federal dollars will run out.

Both MPS and MMSD are facing falling enrollments and, ironically, can use that situation to their advantage. State funding is based upon the last three years of enrollment in order to give school districts a soft landing rather than dramatically cutting funding for a single year.

The goal to hire more employees might be aspirational given that the district was not able to fill all positions allocated. Peterson says MPS had around 140 vacancies the last couple of years. He is not worried that new hirings will be followed by layoffs when the ESSER funding runs out because some positions will again go unfilled, employees will retire or move elsewhere, and a continued drop in enrollment will mean less employees will be needed.

In 2020 and 2021, MPS lost 3.3% and MMSD 2.5% of their student populations. Since the start of the pandemic, Wisconsin has lost 3% of its student population, but Milwaukee saw a total decline of 7.5%.

The Wisconsin Policy Forum concludes, “Key questions, therefore, are whether MPS leaders can effectively use the ESSER dollars to ramp down future cost pressures; and whether the loss of students might allow them to generate savings in areas like facilities and workforce that will help counter at least some of the negative impacts resulting from the lack of revenue growth.”

MMSD may be counting on Madison still being a desirable place to work and live, especially as recent UW-Madison graduates look for teaching positions. But by offering only a 2% pay raise, the district runs the risk of losing seasoned teachers to neighboring suburbs with higher pay and better working conditions.

What is becoming increasingly clear is, if we want to keep students safe both from a virus and from violence and if we want to overcome learning loss, we need to deal with student emotional and developmental wellbeing. That takes more than computer simulations and online learning. It takes a lot of adults, which entails increased labor costs. Cramming a lot of students into a classroom to save money is unlikely to do the job.

No one knows what will happen to Wisconsin school funding once the ESSER money runs out, especially in districts like Milwaukee and Madison that received significant dollars through this program. With the November elections looming, legislators are using federal dollars to cover school funding ahead of the election not wanting voters to see major state spending. But It is unlikely legislators will be able to hold the line on Wisconsin’s dramatically reduced state funding for schools, especially during a period of high inflation. The question is how much they will be willing to spend, whether the money will be fairly and equitably distributed, and how it might be used to help solve the urgent problem not just of educating students but also keeping them safe and mentally stable.

A federal funding flood followed by a school finance drought was originally published by the Wisconsin Examiner.