Schools Are Wasting Covid Cash

By Ryan Mills

Thursaday, August 11, 2022

Presented with more than $139 million in Covid-19 relief money, J. A. Gonzalez, the superintendent of the McAllen Independent School District in South Texas, vowed last year to spend the unprecedented sum creatively, strategically, and appropriately.

Speaking on his SuperTalk videocast in June 2021, Gonzalez called the federal funding “very special” and told parents that he and his staff were working hard to develop a spending plan focused on closing pandemic-related instructional gaps and providing teachers and students with the resources they needed to “get back to the level that we were at pre-pandemic.”

Not surprisingly, the district attracted scrutiny earlier this year after it released a spending plan that devoted millions to projects that some see as unrelated to those goals.

The 46-page plan dedicated $12 million to build intimate, multipurpose fine-arts theaters at the district’s three high schools; $4 million to construct educational pods at a city-owned nature sanctuary; $7.7 million for athletics, including new turf fields and gym equipment; and $1.75 million for an e-sports video-game center.

McAllen is not the only school district that has faced pushback for how it plans to spend its Covid-relief dollars. School districts across the country, finding themselves in the unusual position of being flooded with cash they need to spend fast, have found scores of questionable uses for the money.

Sewing machines, batting helmets, security cameras, band risers, T-shirts, and floor polishers are all among the items that school districts around the country plan to purchase with their Covid money, according to news reports. There are lots of proposals for new playgrounds and updated weight rooms. In Whitewater, Wis., the school district used $2 million in pandemic-relief funding to free up local dollars to install synthetic-turf sports fields. Another Wisconsin school district is paying the superintendent’s wife $130,000 to promote an online-learning tool to district parents, according to a local news report. A Michigan school district proposed spending $120,000 on a food truck for its culinary-arts program and $10,000 for a “nutrition room” to make smoothies for student athletes, Chalkbeat Detroit reported in April.

The questionable spending is just one troubling, though entirely predictable, outgrowth of the haphazard way Congress doled out more than $190 billion in Covid relief for schools. The money came with few guardrails, little guidance about what, exactly, it was for and how to spend it appropriately, and virtually no direction for how to measure success.

Research is showing that pandemic-related school closures and virtual learning took a major toll on American public-school students, and education experts say there is an urgent need to address significant learning loss, particularly among the nation’s most vulnerable children. Despite that, overwhelmed school-district leaders, operating in a sort of pandemic-recovery fog, are struggling to spend the massive amount of Covid-relief money the government has shoveled at them — and spend it appropriately — before it all expires in September 2024.

While much of the planned spending likely will help students make up ground lost during school shutdowns, some of it has a tenuous connection at best to the pandemic. In some cases, school leaders are struggling just to get the money out the door fast enough.

“There was a sense that the money was going to help open schools. But the schools opened, and they still hadn’t touched any of the money,” said Marguerite Roza, a Georgetown research professor and director of the university’s Edunomics Lab.

Roza said that over the last two years, the federal messaging around the Covid-relief money has changed. “Originally they said the money is to ‘open and stay open,’” she said. “And then they started saying, ‘You know, this money is really flexible.’ A lot of districts were complaining they didn’t get more money in the infrastructure package for buildings and stuff. And they were like, ‘Well, you can use this for buildings.’”

In McAllen, while the more controversial spending projects have received the most ink, particularly in the national press, the bulk of the district’s plan does appear more focused on addressing pandemic-related learning loss and preparing schools for the possibility of future closures. It includes millions of dollars for reading and math specialists, student-learning facilitators, and several other new positions designed to help students bounce back from pandemic-related disruptions. More than $10 million was budgeted for iPads, Chromebooks, and other new devices. There was more than $17 million for “staff retention stipends.” Millions more dollars were budgeted to fund additional summer-school staff, Saturday learning, professional-development courses for teachers, and supplemental learning materials for students.

Tony Forina, the McAllen school-board president, told National Review the Covid-relief money was a “big deal because it has helped us in what our mission was, to close the [learning] gap, to get these students back into the classroom, make sure the classrooms are sanitary.”

Forina also defended the more controversial projects: The nature-park classrooms, for example, would provide opportunities for outdoor learning in the case of another extended shutdown, he said, and the new turf “puts you outside, makes sure you’re getting your vitamin D.” The e-sports facility is “all about the rounding of the student,” he said.

“This money,” Forina said, “is being put into play as required by the federal government.”

Between March 2020 and March 2021, Congress approved $193.7 billion in Covid relief and rebuilding funds for the nation’s public schools. The bulk of that, $189.5 billion, came in three successively larger waves of elementary- and secondary-school emergency relief, otherwise known as “ESSER funds.” The ESSER funding approved over that one-year period dwarfs Title I funding ($16.5 billion in 2021), which typically is the largest source of annual federal education spending.

The first wave of ESSER funding, $13.2 billion, was approved by Congress at the outset of the pandemic, as part of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act. A second round of ESSER funds, $54.3 billion, was approved in December 2020. 

Those first two rounds of funding for schools came with almost no limits, but the money was generally understood to be for reopening schools, helping students who fell behind, and avoiding layoffs — a sort of pandemic-recovery slush fund.

The spending deadlines were September 2022 for ESSER I funds and September 2023 for ESSER II. A National Review analysis of Department of Education ESSER funding data found that through June 30, states spent about 93 percent of the first wave of funding, but only about 49 percent of the second wave.

There are several reasons why school districts are struggling to spend all their Covid-relief money. First, the cost to reopen shuttered schools wasn’t as significant as some had initially expected. They could buy and store only so much PPE and hand sanitizer.

Second, because the ESSER funds are a one-time injection of money, it’s hard to spend in one way that school districts are good at — hiring lots of new employees. Districts that spend a considerable amount of relief money on new employees could fall off a “fiscal cliff” and be forced to make painful cuts when the funding runs dry.

Forina, the McAllen school-board president, said the new jobs they approved with their ESSER funds are three-year positions, and they’ve been clear with candidates that the jobs aren’t permanent. He said he hopes the good employees they bring on can be retained in other positions when the ESSER funding goes away. “I certainly hope that we don’t have to look at a reduction in force, because we’ve hired some great people,” Forina said.

School districts are also facing the same supply-chain disruptions as other industries and delaying some large capital projects, for which it already can take a long time to sign a contract and then to get shovels into the ground. Likewise, the worker shortage has made filling newly created jobs more difficult.

When it comes to extending the school year and adding hours to the school day, district leaders have to negotiate with staff and their unions, which can narrow those plans. Nat Malkus, a senior fellow at the American Enterprise Institute, found that in many cases the biggest resistance to spending money to extend learning hours came from parents already burned out by the pandemic and just looking to get back to normal.

“The things that are potentially more effective are extended school years, extended school days, learning in the summer, after-school tutoring. And that colonizes families’ time, and families don’t really like to do that, because they’re tired, too,” said Malkus, who’s been a leading researcher tracking Covid-relief spending at schools.

In the early months of 2021, after two rounds of Covid-relief funding, school districts around the country, along with state and local governments, were flush with cash. Worries about the pandemic cratering budgets never materialized, but that didn’t stop Democrats, newly in control of Congress and the presidency, from pumping even more money into their coffers. 

The $1.9 trillion American Rescue Plan, passed with no Republican support in March 2021, approved another $122 billion in ESSER funds for public schools and $500 billion for state and local governments. Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, called that last round of spending “a huge mistake, a huge unforced error.”

“It was obvious that the American Rescue Plan was far too large at the time. I think in hindsight, it was even more too-large than we realized, and that has consequences,” he said. “One consequence is a lot of money is being wasted on low-priority measures that are unrelated to Covid. Another consequence is we have massive inflation, and that’s not only because of the American Rescue Plan, but it’s certainly a significant factor.”

The $122 billion in ESSER III funds has a spending deadline of September 2024. Only 13 percent of the ESSER III money had been spent as of June 30, Department of Education data show.

“Some people will say, ‘Well, that was pandemic funding. That’s supposed to go to addressing pandemic problems,’” Malkus said. “But pretty much everybody realizes that the Democrats came in power, they want to fund schools at a much higher rate, and this was a chance to do that in spades. And they did.”

Of the total $189.5 billion approved for schools in the three ESSER funding waves, less than a third has been spent so far. Some states are struggling more than others to spend it. Vermont, for instance, has spent only about 16 percent of the $443 million it was awarded in the three waves. Wisconsin also has spent about 16 percent of its $2.4 billion, and Rhode Island has spent only about 17 percent of its $646 million.

In the wake of the school shooting in Uvalde, Texas, some Republican lawmakers backed a bill that would allow school districts to use unspent ESSER funds on school-security measures, including panic buttons and video-surveillance systems. “Currently, our schools have over $100 billion in unspent Covid-relief funds they cannot use for school security,” Senator James Lankford (R., Okla.) said in a prepared statement in June. “We should give schools the option to use their existing grant money for security if they choose, so schools can prepare their facilities for returning students this fall.”

Roza, the Georgetown professor, said one of her biggest concerns is the general lack of accountability for spending ESSER money. There has been no focused objective or common yardstick, what she calls a “North Star,” attached to the funds. The ESSER III funds did come with a stipulation that 20 percent be spent on evidence-based interventions to address learning loss, but federal messaging has been confusing and inconsistent on that point. 

Research is showing that some American students are six months or more behind where they should be because of the pandemic. For older students in particular, the time to make up ground is getting short.

Roza believes the North Star for ESSER spending should include a data-driven concentration on math and reading scores and graduation rates. That would shift the focus away from what districts are spending money on and toward how successful they are at ramping up learning.

“In the absence of a North Star, everybody is just fixated on what was purchased. Because what else are you looking for?” she said, adding that the spending so far seems “all over the map: ‘Here’s some money; it’s Christmas morning.’”