K-12 Outreach Awarded a MAPPR Grant to Study the ESSER Fiscal Cliff

When COVID-19 arrived and began impacting every facet of society, including K-12 schools, the federal government allocated almost $200 billion to educational entities via the Coronavirus Aid, Relief, and Economic Security Act, Coronavirus Response and Relief Supplemental Appropriations Act, and American Rescue Plan (Addonizio, 2021). With these federal allocations in 2020 and 2021, districts across Michigan and the United States undertook massive efforts to recover from the academic, social, physical, and mental effects of the pandemic while also considering what this boost in financial resources might support in terms of new programs, staff members, capital projects, or approaches to education (MDE COVID-19 Spend Dashboard). For a fleeting moment, these “historic” Elementary and Secondary School Emergency Relief (ESSER) funds made Michigan districts “as flush as…ever” and invited optimism about what the future of schooling could entail (Roza & Silberstein, 2023; Levin, 2022).

That said, shortly after resources arrived, so too did warnings of their temporary nature and a possible cliff in September 2024 when districts would face “a use-it-or-lose-it deadline” to spend any unobligated funds, return to pre-COVID conditions, and have “to figure out how to make up for the lost dollars” – a uniquely challenging task for entities planning to use these funds for recurring costs (Chrastka, 2024; Lefebvre & Master, 2024; Beverly et al., 2021). Over the last few months, these cautions have been magnified by “falling district enrollments,” which lessen the amount of money that schools get from the state because of the per-pupil nature of this funding, and “slowing state revenues,” which could generate “financial chaos” by constraining resources available for lawmakers to allocate in the state education budget (Roza & Silberstein, 2023). Taking the totality of these factors and their simultaneous arrival into account, some economists have warned administrators that their school districts face a “fiscal cliff” that will necessitate deep budget cuts and spending changes or financial peril (Dellinger, 2024).

What is unclear is the extent to which Michigan districts have internalized the possibility of or realized an ESSER cliff, especially tied to their ability to staff their buildings with qualified educators. Wanting to better understand this fiscal phenomenon with very real potential education-based impacts on Michigan schools, a collection of researchers from the Office of K-12 Outreach proposed to investigate this question, along with how some districts might respond to an actual or perceived ESSER cliff concerning staffing and how others might avoid such peril. In August, the team, which includes Dr. Bryan Beverly, Director of the Office of K-12 Outreach, Tyler Thur, Associate Director of Data and Evaluation for the Office of K-12 Outreach, Dr. Jacqueline Gardner, Director of Data and Evaluation for the Office of K-12 Outreach, Dr. John Lane, Outreach Specialist in Coaching and Teacher Development, and Dr. Theodore Ransaw, Outreach Specialist in Diversity, Equity, and Inclusion, was awarded a 2024-25 Michigan Applied Public Policy Research (MAPPR) grant from the Institute for Public Policy and Social Research (IPPSR) at Michigan State University to study these research questions.

The project will run for one year. Using surveys of district leaders, it will demonstrate the extent to which Michigan K-12 institutions face an actual or perceived fiscal cliff tied to the September 2024 expiration of ESSER funds, especially concerning staffing. From there, the researchers will use follow-up interviews to identify how some districts have avoided financial peril and how others are responding to newly-felt scarcity. In the near term, findings will help districts navigate the end of these relief dollars and plan to sustainably use other time-limited funds from the U.S. Department of Education, the Michigan Department of Education, and nonprofits. Further out, insights will influence state and federal school funding decisions, guidance tied to future one-time grants (and their structure), and efforts to ameliorate education workforce shortages once ESSER funds expire. A core element of the research will involve connecting findings to policy recommendations that local, state, and federal decision-makers can utilize.

Broadly discussing the seven funded research projects, Dr. Matt Grossmann, IPPSR Director, commented in a press release that “the Institute for Public Policy and Social Research is proud to be a part of this vital research” and “look[s] forward to working with this year’s grant recipients.” The Office of K-12 Outreach is similarly excited to dig into this consideration of district finances and is grateful to IPPSR for this organization’s financial support. Throughout the 2024-25 school year, future editions of In Focus will update readers on this project, including soliciting insights on the ESSER cliff from readers who are also district leaders. With that, as the Office of K-12 Outreach team develops a policy brief to share the findings of their research and recommendations, it will be disseminated through this newsletter.