Joint Leadership Conference Funding could fall for many schools

At the ASBA-AAEA Joint Leadership Conference, schools were warned COVID dollars were going away, while student numbers are falling

Funding levels could drop significantly in the coming years because of the end of COVID dollars and because of various demographic factors, while schools can use data to better serve students.

Those were some of the topics covered at the AAEA and ASBA Joint Leadership Conference May 2.

Lake Hamilton Superintendent Shawn Higginbotham warned attendees that four challenges could lead to significant funding losses, with the problem being most acutely felt in 2024-25.

That’s the year Arkansas schools will stop being able to spend Elementary and Secondary School Emergency Relief

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funds that provided $1.77 billion to respond to the COVID-19 public health emergency. According to the Department of Education’s ESSER Transparency Dashboard, the state had spent $1.33 billion, or 74.93%, as of May 16, and had $443.73 million remaining. It must be spent by September 2024.

Higginbotham and Lake Hamilton School District CFO Kelli Golden warned that schools must prepare for this “ESSER cliff.” Recurring costs like staff or technology rotations should not be paid through temporary ESSER funds.

“Have you been limping along and plugging holes for three years with some of those funds?” Higginbotham asked. “And is that going to go away, and then what are you going to do, especially if you’re in the situation like we’re going to talk about next, where you might not be growing or gaining students?”

Higginbotham said that while some districts are growing, many across Arkansas and nationally – including his – are losing students. According to the National Center for Education Statistics, total public school enrollment, after a quarter century of increases until 2019, dipped during COVID, only somewhat recovered, and is projected to decrease 4% by 2030. Arkansas K-12 public school enrollment dropped from 465,000 in 2013-14 to about 455,000 in 2022-23, and is projected to decrease to between 430,000 and 440,000 in 2032-33.

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The decline is caused by several factors, including falling birthrates, an increase in non-public school options, and falling immigration rates. Live births nationwide peaked in 2007-08 but have fallen significantly since then. Nonpublic school options are another factor, although not the main one. Immigration has been falling since 2016, probably as a result of federal policies and the pandemic.

Higginbotham noted his own school district is seeing this play out with smaller kindergarten classes compared to older grades. He said school districts have spent decades building facilities and have added staff but now face this downward trajectory.

Two other issues are creating funding challenges. One is inflation, which results in reduced purchasing power for schools, higher borrowing costs, increased funding disparities, and schools chasing inflation with salary increases. The other is the economic slowdown, which could affect state revenues.

Higginbotham offered several suggestions that could help school districts weather the coming storm. They can adjust staff counts to reflect enrollment trends, freeze their hiring, alter their benefits, reduce stipends, rein in spending on things that are merely nice to have, eliminate ineffective programs, squeeze discretionary spending, postpone projects, and build reserves.

“Don’t delay, and hope and prayer are good strategies, but pray for the discipline to do the right thing and get your budgets where they need to be,” he said. “Avoid at all costs deficit spending and a RIF (reduction in force). Those are not popular things to have to live through.”

In another presentation, Hamburg Superintendent Tracy Streeter, Assistant Principal/ALE Director Lesley Nelms, and school board member Trey Tubbs spoke about using data at board meetings. The presentation came following the passage of Act 425 of 2023, a one-sentence piece of legislation by Rep. Bruce Cozart, R-Hot Springs, and Sen. Jane English, R-North Little Rock, that requires each monthly school board meeting to include a report or presentation regarding student academic data.

Hamburg had already made a commitment to doing this. Nelms said Streeter last year told the staff that the district was a professional learning community and that school board members needed to know what they were doing and why.

Streeter said the school district underwent a paradigm shift that was not always easy. Among its goals was to model data-driven decisions.

Please see FUNDING, page 39