Search

The full financial impact of COVID-19 is now unfolding for school districts, and it is a story of much more than PPE, hand sanitizer, and laptops. Looking ahead at the bigger picture, we see that the magnitude of cost pressures to come will far outweigh even the costs that districts have incurred to date. Particularly for large, urban school districts, COVID-19 has greatly exacerbated the "triple squeeze" of rising costs, declining revenue, and greater student need -- challenges that districts were contending with even before the pandemic struck. In this brief, we discuss our emerging perspectives on the long-term financial impacts of COVID-19 and implications for education leaders at all levels. This framework and early analysis can be used as a starting point for the field to engage in ongoing dialogue about each component of the challenge and to identify the actions needed from district, state, and federal leaders to turn a year of crisis into a moment for meaningful transformation.

In the wake of COVID-19, school systems face a daunting set of challenges as they plan for the 2020-2021 school year -- including meeting students' increased academic and social-emotional needs, implementing physical distancing requirements, and grappling with significant revenue loss. School systems must prepare for the 2020-2021 school year with an integrated decision-making process that responds to these new challenges in an aligned way. As part of closing out the current fiscal year, school systems should critically evaluate both the impact of COVID-19 on their net fiscal position and any remaining levers to maximize savings this year. Accurate and updated projects are crucial for informing difficult decisions about spending reductions next year, and given the magnitude of forecasted revenue loses, every dollar that school systems can save now is a dollar less that will need to be cut later. In this ERS Briefing, we explore the key decisions districts faced during their COVID-19 response and how subsequent areas of spending and saving impacted systems' end-of-year financial position. We share these findings to shed light on the magnitude of what can be expected from school systems' savings (and why), to help district leaders identify remaining options for increasing savings during the current fiscal year, and to inform state appropriations and policy for FY21.