‘Tis the season to reflect on budget

We are getting ready for two seasons: holiday season and budget season. In both instances, superintendents, cabinet members and board members can take time to reflect on what has worked in the immediate past and what needs to be adjusted. The final fiscal year of ESSER invites us to do this by crafting a compelling vision for well-resourced schools with improved efficiencies. There are some predictable trends in this invitation to adjust, based on our results and the system’s response to the influx of these resources. 

More often than not when the K12 system receives additional funding, it responds by spending that money on labor: new positions, new support roles, and increased compensation (including, as we saw, retention bonuses). We see this investment show up across school district strategic plans. In 2023, we conducted a national scan of large urban school districts and found labor initiatives as second only to instructional interventions in over 80% of these plans. As pressure increases, districts also put funds into “promising practices” or innovative approaches intended to make things easier or improve performance. During the pandemic, these practices included facility upgrades, new technologies, social and emotional learning activities, and high-quality instructional materials. Each of these expenditures needs to be tested using the Learning on Investment (LOI) measure. 

We offer these suggestions, based on our work with dozens of states and school systems. 

1. Map wins. Rigorously assess the LOI of each ESSER expenditure. In most districts, these include new interventionist positions, enhanced after-school and summer school offerings, increased student support, and the scaling of instructional technology. Find sustainable funds for those with a high LOI and “strategically abandon” those with low LOI. As strong innovative practices get institutionalized (e.g., the science of reading; instructional technology), intentionally reduce the high initial costs of innovation and launch such as training and equipment purchases.  
2. Go lean. Step back and take a hard look at ongoing – and often redundant – costs you’ve built into your budget as various assessment and information systems have been adopted. Just as cable and cellphone plans take up an increasing percentage of our household budgets, these annual costs often receive too little scrutiny in district budgeting. (Note: These redundancies create other ‘costs.’ For example, duplicative assessment and reporting practices take time away from student learning and burden staff.) These cost savings can fund some of the high-LOI activities originally funded through ESSER. 
3. Rethink walls. No doubt the hardest and longest conversations will be about the size of your educator workforce. Nearly every district and school has unfilled teacher and paraprofessional positions. Even with grow-your-own approaches and increased state flexibility, it is unlikely that our current educator workforce is sustainable at the national, state, local and school levels. Right-sizing the workforce is likely to consume the remainder of most superintendents’ careers and the loss of ESSER is an important trigger. Solutions will likely include adopting innovative instructional and staffing models that ensure that all students are taught by expert teachers, reducing course/program offerings in secondary grades, increasing class sizes and closing schools. 
4. Listen. Design and routinely use stakeholder engagement activities—not just at the governance level conducting parent engagement, community and business partner meetings, and at the school level—that encourage family engagement to understand the LOI and the trade-offs of budget choices. Routinely report on these activities and how they are informing your strategy. 
5. Landscape. Move beyond annual budgeting by using scenario planning to take a “what if” approach. Scenario planning smooths out short-term decision-making and helps stakeholders better understand the trade-offs. The capacity to project student enrollment by subgroup, teacher retention and recruitment by certification, capital needs and fiscal resources by source will be needed, but these will build a system-wide culture of data-driven decision-making. 

In the wake of ESSER closeout, the need to improve efficiency will certainly be painful. This is a normal cycle of rebalancing similar to the one many of us experienced when the 2009 American Recovery and Reinvestment Act expired. Resilient school systems are those that adapt, innovate and become agile enough to overcome challenges. We think though that this cycle is exacerbated by the acuteness of student learning loss and the growing threat of the teacher shortage. The latter is an opportunity to prepare for another season: hiring. In the coming months, we will spotlight how states and districts are thinking about recruitment and retention in compelling ways and getting results.   

Remember the adage, “Never let a good crisis go to waste.” If you oversee resource allocation, now is the time to admire the view from the cliff and find a safe path down to the valley, not step off.