Category Archives: COVID-19

The Looming Financial Crisis? Resources for the Education Sector

Efforts to lift economy could tip off a financial crisis.” School districts brace for cuts.” Will the Banks Collapse?

With headlines like these making the rounds, there’s no way to avoid questions about how the COVID-19 pandemic has and will impact the economy — and in turn, America’s schools. The uncertainty is very real, and the consequences could be as well, but how can education leaders make sense of often contradictory and evolving prognostications? And if the impact won’t be catastrophic, what is the more complicated outlook?

At Bellwether Education, we’ve worked with schools, CMOs, districts, states, and nonprofits to understand this moment, and have begun to build an understanding — unpredictable as this moment is — of where our sector is headed fiscally, how organizations and policymakers should respond, and the key variables to keep an eye on. We understand how school funding works, from the federal budget process to state legislatures to local levies, and we’ve coached hundreds of clients on planning for and through financial uncertainty. 

In this new series, The Looming Financial Crisis?, we bring our policy chops together with our practical experience with districts, schools, and networks forward to share perspectives on how a financial crisis might play out and where impacts will be felt. Some questions we’ll explore:

  • Where does school revenue come from, what do we know about how the economic downturn might affect lower income communities? 
  • How can districts and schools carry out short-term and long-term planning amidst uncertainty, while prioritizing students furthest from opportunity?
  • What are the potential impacts on private school operations, especially those private schools dedicated to serving high-need students?
  • Will an economic downturn lead to increased interest in charter school mergers, and how should school leaders approach these potential partnerships and their impact on students and school communities? 

We’re here to cut through the noise so the education sector can navigate the uncertain future as effectively and efficiently as possible. Follow along as we roll out insights targeting school districts, state education agencies, individual schools, charter networks, and more.

Everything You Always Wanted to Ask About School Finance But Were Afraid to Ask

How do individual schools get their funds from districts, how do districts get funding from states, and how do states generate revenue for education?

These are little-understood mechanisms, and what’s more, the way we finance schools looks different in almost every community because of statutory structures and local context.

There’s a lot of prognosticating going around about how school budgets will look next calendar and school year due to COVID-19, but the economic shock flowing through the education sector needs to be tempered with some fact checking and clarity. In my previous life, I advised the Texas legislature on public education budgeting and school finance, so I’m here to simplify the complex so education leaders can get a clear and accurate understanding of how funding actually trickles down.

After you read these FAQs, check out the rest of The Looming Financial Crisis? series for key takeaways for school districts, state education agencies, individual schools, charter networks, and more:

  1. Where does most school funding come from?
  2. Where do state dollars for education come from?
  3. What about local dollars? Where do those come from?
  4. Why can’t we predict next year’s school budgets? Shouldn’t school funding already have decreased since many people are out of work and probably not paying income taxes?
  5. What are a few different scenarios you could imagine for schools?
  6. What are the first things to go when a school leader has reduced funds to work with?
  7. Don’t governments have reserves they can lean on during tough times?
  8. If a state or district leader wants to prepare for different possible economic impacts, what should they be doing?
  9. What if I want to get wonky and learn more about this?

Where does most school funding come from?

The first common misunderstanding is about where the bulk of school-level education funding actually comes from: your local community, your state, or the federal government.

The answer is it’s all three, but not the breakdown you might assume. As the chart below shows, funding for education, on average is mostly from state and local governments, about a 50-50 split, with only 8-10% coming from the federal government. It is worth noting that while these proportions of state and local funds are true on average, tremendous variability in how much funding comes from state versus local sources exists between and even within states, depending largely on the structure of state school funding formulas.

The two largest sources of federal funds from the U.S. Department of Education are Title I, which targets funding to schools serving low-income students, and the Individuals with Disabilities Education Act (or IDEA), which supports students with disabilities. In addition to these large programs, the federal government also runs grant programs to support other initiatives including teacher quality, early childhood education, and charter schools. And the federal government heavily subsidizes school meals, which is the largest source of federal funding flowing into schools, through the free and reduced-price breakfast and lunch programs administered by the U.S. Department of Agriculture.

But the bulk of funding that supports educator salaries and benefits, instructional materials for students, construction and maintenance of school facilities, school transportation systems, and all the other core ingredients for school operations are funded from state and local funds.

Where do state dollars for education come from?

Most states get most of their revenue from income and sales taxes. Different states tax different purchases differently (e.g., some states exempt select purchases considered to be basic needs, like food and medicine), and some don’t charge any income or sales tax at all. There are nine states with no personal income tax, but several of those have some other tax source to fill the gap (like Alaska and Texas, which generate significant revenue from the oil and gas industry). Most states have a mix of other taxes and fees they may levy on businesses, tourism, or other specific activities. But across the country, personal income tax and sales tax provide the lion’s share of state tax revenue.

State tax dollars pay for a range of services, with the largest proportion of state investments in most states going to K-12 public education. Beyond K-12 education, significant state spending goes to public higher education systems, health care (especially Medicaid, which is jointly funded from state and federal sources), criminal justice systems (state law enforcement, court, and prison systems), social services (like child protective services and administration of family supports), economic and workforce development, and regulatory functions (like licensing child care facilities or various professional licenses). Many of these functions are also supported with federal and/or local funds.  Continue reading

States Should Keep Pushing for College and Career Readiness, Even Under a Pandemic

As graduation rates have continued to rise across the nation, students increasingly require remediation at the next level. One study found that 50% of two-year college students and 20% of four-year college students required remedial classes, in some cases discouraging those students from persisting in higher education. 

Combined with recent reports of student disengagement during COVID-19 remote learning and concern that high school dropout rates will rise, states must consider how best to provide the support and learning opportunities for their students to graduate college and career ready, even in the midst of a pandemic. Students need to be prepared to pursue economically stable postsecondary pathways in these tenuous times. This demands a variety of opportunities, with the goal of graduation as a starting point for postsecondary success, not simply the finish line of a high school journey. 

In our paper released earlier this month, Chad Aldeman and I look at the data states are collecting around college and career pathways. One encouraging trend is that states have changed their formal high school rating systems beyond graduation rates and test scores to include a host of college- and career-readiness measures. By our count, 34 states plus DC have some form of indicator along these lines. Another 12 states are tracking one of these measures but do not yet hold schools accountable for them. Measuring postsecondary readiness is a crucial step for preparing students to succeed beyond high school and supporting the skills and content knowledge necessary for students so that they don’t require remediation at the next level.

Yet how do you establish high expectations during a pandemic when just getting through the school year seems challenging? One approach might include maintaining a focus on readiness measures, even as graduation criteria shift.

Due to the pandemic, many students in the class of 2020 were permitted to graduate from high school with requirements loosened or waived completely. For example, four midwestern states we reviewed — Indiana, Illinois, Michigan, and Minnesota — eased graduation requirements last spring. These changes are representative of similar measures taken by states across the country. 

Indiana, Illinois, Michigan, and Minnesota all had adjusted cohort graduation rates above 80% in the 2017-18 school year. Presumably, with relaxed standards, their graduation rates for the class of 2020 will be the same or higher. Some of the adjustments they made for easing graduation last spring are noted below: Continue reading

Student Absences Get Worse When Juvenile Justice Systems Step In: A Q&A With Josh Weber

The Council of State Governments Justice Center recently published a new report sharing their findings from a study of South Carolina’s probation system and probation’s negative effect on student attendance. I asked the report’s author, Josh Weber, a few questions about the goals of the study and what he thinks it means for schools. I also asked his thoughts about the impact of distance learning in light of the recent news about young people being referred to law enforcement for not attending online classes. 

What motivated the research behind this report? What were you hoping to better understand?

Nationwide, juvenile arrests and court referrals have declined substantially over the last decade, but referrals for truancy have remained largely stable and actually increased to over 60,000 in 2018. In addition, over 288,000 young people are placed on some form of probation every year, at least some of whom are placed under system supervision primarily due to concerns about their school attendance. Likewise, for almost all youth placed on probation, daily school attendance is a mandatory condition of their supervision, and youth can be incarcerated for their failure to comply. 

We conducted this study because we felt that most jurisdictions were not questioning whether the use of the juvenile justice system to intervene in youth’s education in these ways is an effective approach. We wanted to understand whether being placed on probation actually led to improvements in youth’s school attendance.   

What is the key takeaway for schools and educators? Is there something they should be doing differently? Continue reading

“Making Sure Every Student is Seen and Heard:” A Q&A with Executive Director/Principal Ayanna Gore

Ayanna Gore is the Executive Director/Principal of Summit Sierra High School in Seattle, Washington. We interviewed her as part of our Promise in the Time of Quarantine: Exploring Schools Responses to COVID-19 case studies, released today. Unlike many schools that hoped to open their doors for hybrid schooling this year, Summit Sierra made the early decision to open fully virtually. I spoke with Ayanna about what they learned from virtual school last year and how they’re improving upon it now.

When did you know you would be fully virtual and how did that shape planning for this school year?

By the third week of June, we shared with our families that we were planning for a fully virtual online experience. If things changed (due to a vaccine or the governor’s recommendation to reopen), we would set up workstations where families could come in and get in-person support, while learning still occurred virtually. But we committed to a 100% virtual model for consistency.

This meant reshaping our entire new-student and all-student orientation. And for onboarding new faculty, we connected with them a little earlier than we normally do. We had conversations about things like computer/Zoom fatigue, so we built in natural breaks for a schedule that still meets our academic goals. 

It’s about community and making sure every student is seen and heard. That’s how we started our new student orientation. We flipped it from the traditional “here is your schedule, these are your teachers.” We started with every student hearing from our leadership team on our mission and our individual journeys and stories. New and returning students all got interviewed and had time to share their journey and their story. 

Can you share more details of that orientation? Continue reading