Michigan school districts must allocate federal stimulus funds before deadline

Michigan is sitting on billions of dollars in COVID-19 federal funding earmarked for its public schools, but there’s a ticking clock associated with it. If the funds are not allocated by the end of September, they risk being forfeited.

The year 2021 saw President Joe Biden signing a stimulus bill aimed at channeling funds into communities to tackle the economic fallout of the pandemic. The American Rescue Plan specifically included provisions for schools and education agencies.

Back in 2021, Michigan received a significant sum of over $3.7 billion in Elementary and Secondary School Emergency Relief (ESSER) funding, augmenting the previous smaller-scale stimulus packages. This brought the total federal funds available for education-related projects to over $5.6 billion for the state. The deadline for allocating the 2021 funds to specific education initiatives is September 30.

Despite the substantial funding available, certain Michigan districts and agencies might miss this critical deadline and risk losing access to these funds, as stated in an announcement from the Michigan League for Public Policy.

According to the Michigan Department of Education’s dashboard (DOE), there remains $740.4 million unallocated for schools to claim reimbursement. While some educational institutions might have already expended their designated funds prior to receiving reimbursements, a substantial sum is still up for grabs in the coming months.

The lion’s share of this funding was directed towards local educational institutions, encompassing public and charter schools. The federal funds received by these schools are intended to address the learning deficits exacerbated by the pandemic and to alleviate disparities that were accentuated during this period, potentially through initiatives like expanded after-school programs or summer educational offerings, which educational advocates have reaffirmed as essential.

Furthermore, the extra ESSER funding can be utilized for diverse health and education-related projects, ranging from technology upgrades for remote learning or in-classroom use, employing additional staff, enhancing air quality, and bolstering mental health services.

Tackling Challenges in the Long Run

Allocating one-time payments poses a challenge for schools as the funds are non-recurring and necessitate careful planning to ensure sustainability, according to Anne Kuhnen, Kids Count’s policy director at the Michigan League for Public Policy. For instance, if a district employs a mental health professional and covers their initial year’s salary with the stimulus money, the district must then finance their salary going forward from its own budget since the federal funds are not perpetual.

“The expiration of the funding will pose a particular challenge for districts that found themselves compelled to use some of the funds for ongoing expenses without adequate preparation,” remarked Michigan State Superintendent Michael Rice during a May 14 State Board of Education meeting.

Michael Rice

Michigan’s youth also grappled with academic setbacks during the pandemic, with elementary students displaying lower proficiency levels in critical subjects such as math and reading compared to pre-pandemic levels in 2019, as underscored in a recent report from the Annie E. Casey Foundation. This report also highlighted Michigan’s lowest education ranking in 35 years, placing the state at 41 out of 50 states for education during the 2021-22 academic year.

Biden’s stimulus strategy seeks to tackle these educational hurdles, particularly in light of the potential economic impact posed by a future workforce lacking appropriate academic skills.

For instance, a joint study by the National Bureau of Economic Research projects that US students enrolled in K-12 education throughout the pandemic could collectively lose $900 billion in income if math proficiency levels remain low. This projection stems from the historical correlation between increased earnings and rising math scores on the National Assessment of Educational Progress in the three decades leading up to the pandemic.

Furthermore, a study conducted by the Hoover Institution at Stanford University foresees that Michigan students might face a 5.4% reduced earnings trajectory attributable to learning losses brought about by the pandemic. This decline could contribute to an approximate $300 billion contraction in the state’s gross domestic product, reflecting the total value of goods and services produced.

The authors of the Hoover Institution study, Eric A. Hanushek and Bradley Strauss, suggest that while a significant portion of the ESSER funding has been used for additional educational support or extended learning opportunities to counteract learning losses, incentivizing teachers to take on more challenging teaching roles could be the most effective approach to addressing this issue.

Rice observed that Michigan’s previous two education budgets have played a crucial role in addressing pandemic-related and pre-pandemic educational challenges in the state, including teacher shortages. He emphasized that ongoing funding from the state budget will help mitigate issues such as literacy deficiencies, transportation barriers, and teacher shortages over the long term.

“While we still have ground to cover in terms of funding, the progress made in the last two years and budgets gives us optimism for the strides we can make in this upcoming budget,” Rice concluded.

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