The Boom Years of Pandemic School Funding Are Ending

This story is part of our It’s Gonna Blow reporting series. Read more stories here.

Across virtually every metric, from chronic absenteeism to test scores, most San Diego County schools are still worse off than they were before the pandemic. This comes even as districts have dumped millions of dollars into recovery efforts ranging from additional tutoring to the hiring of employees to interface with the families of chronically absent students.  

Those investments may not be permanent, though. That’s because recovery efforts at school districts nationwide have for years been leaning on a massive crutch: federal pandemic recovery funds.  

That extra cash was a godsend for many districts struggling to balance returning to the classroom. But soon, those funds will expire, blowing a massive hole in district balance sheets. That could spell big trouble for still unfinished recovery efforts. 

The significant increase in funding, to some officials, didn’t represent a windfall, so much as the place funding should have been all along. San Diego Unified trustee Richard Barrera told me so last year: “The federal Covid funds temporarily provided the level of funding that our schools have always needed.”

According to budget presentations, all told, San Diego Unified will have received about $543 million in federal pandemic recovery funds since 2020. The district is also set to receive about $245 million from state pandemic recovery funds, though some of that money will continue to trickle in.  

There were plenty of questions about where the dollars went. A 2022 analysis by the Union-Tribune found the majority of the nearly $262 million San Diego Unified had spent at the time went to employee salaries and benefits. A recent three-year deal with the district’s teachers union that included retroactive pay increases and will cost more than half a billion dollars over its lifetime also raised eyebrows. Barrera’s waved off pay concerns, saying raises are a simple necessity if districts hope to attract and retain talented teachers.  

But regardless of whether one agrees with how the money was spent, districts like San Diego Unified are soon to be in an unenviable position: there’s much more work to be done and much less money to do it with. It would be like someone pulling up a ladder as you were using it to climb out of a hole. The combined expiration of federal funds and certain state funds amounts to the disappearance of $160 million from the district’s 2024-25 balance sheet. 

The evaporation of those funds is bad news. Earlier this year, the district projected it would face a nearly $130 million budget deficit in the 2024-25 school year, which would expand to about $182 million by the next year. Those are big bucks. 

All of this is compacted by some worrying developments. First, enrollment is declining. Not as much as during the pandemic, but it’s going down. And less students means less dollars from the state.

On top of that, chronic absenteeism continues to be more than double what it was before the pandemic — which also affects funding. During the pandemic, state officials temporarily paused their use of average daily attendance to determine funding. Now, funding and attendance are married again. Intense levels of absenteeism will hurt the bottom line.

Earlier this year, school officials were hit with another blow: California’s budget projections. The state is projecting a record $68 billion budget deficit. Cuts to school funding were already planned earlier this year when the state’s deficit was projected to be less than half what’s now being forecasted. The new projected numbers are likely to only add to the fiscal strain. The Legislative Analyst’s Office forecasted a nearly $19 billion funding deficit over three years for schools and community colleges.  

Where the state may end up cutting isn’t certain yet, but could include programs that San Diego Unified has leaned into, like $1 billion unallocated dollars for community schools. Barrera, a big advocate of community schools, is hopeful the program will be off the table. 

“The decisions made in Sacramento around school funding are political decisions, not a math problem. It’s a priorities challenge and the legislature and the governor are ultimately subject to the will of the people of California who care about public schools,” Barrera said.  

How much Californians will make lawmakers sweat over programs like community schools which, despite having plenty of research-backing, are still relatively untested in local schools is unclear. 

Even before the latest worrying statewide fiscal news, San Diego Unified officials were acknowledging they would need to do significant belt-tightening. “This is a roadmap for sweating. We’re going to have to sweat a bit,” San Diego Unified trustee Cody Petterson said at a June board meeting, when the projected deficits were first announced. 

District officials laid out the broad strokes of their plan to address the looming deficits back in June. It includes spending and staffing freezes, reductions in central office staff and programs and increasing average daily attendance. Whether they can make up the shortfall with those strategies is yet to be seen, but Barrera thinks they can get the district back in the black without resorting to the kinds of layoffs they’ve had to turn to in past years or taking an ax to impactful programs. 

“There’s a lot of clarity on the strategies that make the most positive impact for students,” Barrera said. “The focus for district leadership is very much about how do we protect those strategies, and then turn over every rock that we can to make sure that we balance the budget without really doing damage to the things that are working.”