Budget Badge #09 - Presenting the Budget to the Board and Community-Budget Badge #9 - ESSER Cliff

Budget Badge #9 - ESSER Cliff - Perfect Storm

Pdf Summary

A Georgetown University Edunomics Lab forecast (Feb. 8, 2023, Marguerite Roza) warns school district budgets will face significant turbulence from 2022–23 through 2025–26, with 2024–25 expected to be the worst year (“the bloodletting”), though impacts will vary by district.<br /><br />The presentation identifies four atypical financial shocks hitting at once. First, federal ESSER relief funds are temporarily boosting spending but end abruptly around 9/24; districts are most vulnerable if they used ESSER to backfill operating budgets or make ongoing commitments such as new hires or permanent salary increases. Second, ongoing enrollment declines will reduce revenue over time, especially for urban districts and those that stayed closed longer. Third, inflation, labor shortages, and recent hiring are increasing recurring costs; districts are most at risk if they are granting unusually large permanent raises (beyond typical increases) or expanding staff. Fourth, an economic slowdown could reduce growth in state revenues, creating larger problems for districts heavily dependent on state funding.<br /><br />Given these pressures, the deck outlines “four stages” of budget cutting that typically progress from freezes and top-level trimming to negotiation and, if gaps persist, labor reductions. Early actions include freezing hiring and discretionary spending, letting contracts expire, dipping into reserves, postponing maintenance, delaying payments, and offering early retirements. If deficits continue, districts may trim partnerships, reduce professional development and prep time, cut central office roles, consolidate departments, and squeeze non-labor expenses. Because gaps of roughly 2–3% often require labor cuts, larger layoffs may ultimately affect electives, librarians, academic coaches, and even core teachers.<br /><br />The presentation also flags warning signs when districts are not addressing enrollment drops (e.g., relying on attrition, delaying planning, or refusing school closures). Finally, it recommends clear, trust-building communication: avoid business jargon, be explicit that a cut is a cut, use dollar figures and tradeoffs tied to student impact, invite stakeholder input, rely on principals as trusted messengers, and emphasize a forward-looking plan.

Keywords

Georgetown University Edunomics Lab

Marguerite Roza

school district budget turbulence 2022-2026

ESSER relief funds expiration

enrollment decline revenue impact

inflation and labor shortages in education

state funding slowdown risk

stages of school budget cuts

district layoffs and staffing reductions

budget cut communication and stakeholder trust