Expiration of Federal K-12 Emergency Funds Could Pose Challenges for States

If funds are obligated by the end of September, they can still be spent through the end of December or through March 2026 if an extension is granted.2 The financial impact of the expiration of ESSER funds for states and school districts will be exacerbated by several factors: costly state tax cuts, the diversion of resources to school vouchers, inadequate school funding formulas, elevated costs, a. [...] ESSER funds provided historic infusions of cash into schools to address the challenges of reopening schools, helping students with mental health needs, and recovering from pandemic learning loss.3 Funds were distributed through the same formula as federal Title I education funding, which allocates more resources to districts with a high proportion of low-income families than to wealthier districts. [...] As of January, 50 percent or more of ESSER III funds remained unspent in 13 states and the District of Columbia. [...] Still, many states will need to undo tax cuts to address education funding shortfalls in the long run, and lawmakers in states that have not cut taxes should continue making critical investments in their states’ futures and look for opportunities to raise revenue.14 • Diversion of resources to school voucher programs. [...] This might be true of some schools, but others might have used the bulk of their available funds in a single year for a one-time investment in infrastructure or one year of lengthening the school year.