Public schools may fall off a spending cliff as pandemic school funds end

June 6, 2024

Even without a clear federal role in education, Congress frequently dispenses funds to public schools. Such was the case during the COVID-19 pandemic, when the federal government gave an unprecedented amount of federal money within a single year to American K-12 education.

What are ESSER funds?

The federal government gave $190 billion in Elementary and Secondary School Emergency Relief (ESSER) funds to public school across the nation to mitigate the unique challenges of COVID-19 pandemic and its aftermath, including reopening schools and the ongoing pandemic learning loss that plagues us today. But the funds are soon ending.

ESSER funds were appropriated in three installments through different acts of Congress: the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, Coronavirus Response and Relief Supplemental Appropriations (CRRSAA) Act in December 2020, and American Rescue Plan (ARPA) Act in March 2021. The largest infusion of federal funding came in the third and final appropriation in 2021.

State education agencies (usually the state offices of education) received grants to be given to districts or charters to address the immediate and ongoing impacts of the pandemic.

Key details and deadline

Federal funds often come with requirements about how districts or charter schools spend their own funding, the purpose of which is to keep schools from having to confront jarring spending cliffs when federal funding halts. One such requirement is a “maintenance of effort” provision, which is a promise from local education agencies (such as school districts or charter schools) that they will continue spending a certain amount or percentage of what they had prior to the infusion of federal funds. Another is a “supplement, not supplant” provision, which prevents local education agencies (LEAs) from fully replacing their own spending with federal funds for certain things, requiring federal funds to only supplement what the LEA is spending. But the structure of ESSER funding didn’t fully avoid these pitfalls.

Each ESSER grant has had a “maintenance of effort” requirement but not a “supplement, not supplant” provision. This is important because it means that while LEAs must keep up a certain level of state and local spending, federal funds can in fact replace certain state and local funding for allowable activities.

Depending on how they have chosen to spend funds, such an arrangement could put local education agencies in a precarious position soon, and according to some experts, this is especially true for low-income districts that have received a greater share based on how the funds were apportioned.

The final ESSER III funding must be committed to specific uses by LEAs by the end of September 2024 or the funds will be lost. So far, there are no plans for more ESSER funds to flow to public schools.

How the funds have been spent so far

According to what has been reported across the states, about 50% of the funds have been spent on labor costs (teachers, other professionals, staff), which means once the funds end, a lot of employees may be laid off.

Thanks to a helpful transparency tool on ESSER spending, data is available about how Utah’s local education agencies have spent ESSER funds across many categories. A quick look at a few categories shows of the 125 Utah LEA recipients, 48% (60 total) have spent some amount on “professional and tech services,” 74% (93 total) have spent some amount of the third round of funds on supplies and materials, and 84% (105 total) have spent the funds on employee salaries. Alpine School District is the LEA that has spent the highest amount on salaries, at $25,458,641.

Of the 125 Utah LEA recipients, so far only 28 have spent 100% of their ESSER III funds, and 33 have spent less than half. Apparently, many LEAs across the nation have not yet committed their funds yet either. With the past two rounds of ESSER funds, nearly every single Utah recipient used 100% of the funds, so it seems likely that LEAs will also commit those funds before the deadline in September of this year.

What it all means

Soon, many local education agencies may have to make hard decisions regarding how to dedicate funds and how to navigate decision-making once the influx of federal emergency money stops. The question of how to spend funds to maximize student learning has never been so front and center for education leaders.

In fact, because the topic of losing such a high amount of federal dollars is so uncomfortable, there is a debate over whether the $190 billion of federal K-12 funding was enough, or whether more is needed to accomplish its stated goal. One side argues that more money could be helpful if LEAs use it right (and some examples exist), while the other argues decades of experience say that more ESSER funding is unlikely to change how schools spend their funds and ultimately perform.

How the funds impact student outcomes – including pandemic learning loss – will be analyzed for years to come.

In the short run, local education leaders need to plan for what lies ahead with funding changes, including what to prioritize, whether to cut spending from one place to add elsewhere, or whether to raise taxes. State policymakers should anticipate requests, including funding, to address continued pandemic impacts.


With time we will understand better whether these funds helped mitigate the impacts of a pandemic on an entire generation of students or set a precedent for a new level of federal funding in K-12 education – or both.

Isabelle Steed contributed research to this post.

Insights: analysis, research, and informed commentary from Sutherland experts. For elected officials and public policy professionals.

  • The federal government distributed an unprecedented $190 billion of ESSER funding during the COVID-19 pandemic to address pandemic impacts on K-12 education.
  • The third appropriation of ESSER funds have to be committed by September of this year.
  • How this massive increase in federal funding impacts student outcomes will be analyzed for years to come, but state and local leaders need to plan for the loss of those funds in the near future.

Connect with Sutherland Institute

Join Our Donor Network