School Districts That Spent COVID-19 Money on Hiring Now Grapple With Layoffs

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Around this time last year, Franklin Central School in upstate New York faced a $1.46 million budget gap and painful choices: Push for a double-digit tax increase, lay off teachers, or send high school students to a neighboring district.

The state was dealing with its own financial issues and reserved the right to shift state aid amounts based on demographics, regardless of the short notice. Franklin was ultimately held harmless, a legal term for being released from responsibility; its state aid remained at $4.6 million, or about 56 percent of the district’s 2024 to 2025 budget.

With state aid flat, there was still a 4 percent tax hike, and $200,000 was applied from the district’s reserve fund. Some positions were eliminated through attrition, and Franklin partnered with neighboring districts to share staff in limited circumstances. But at least no jobs were lost, and the older kids weren’t sent away, Superintendent Bryan Ayres said.

“The hold harmless piece is critical for us,” Ayres told The Epoch Times, adding that community organizations use the school building for events on evenings and weekends. “The loss of a million dollars in state aid would cripple the community.”

Ayres said that during the pandemic, Franklin spent its federal Elementary and Secondary School Emergency Relief (ESSER) funds, more than $1 million, on equipment and services, not additional staff the district couldn’t pay after federal money went away.

Districts across the nation that used ESSER to bolster staff and hire teachers during the pandemic now face a fiscal cliff, but unlike Franklin, they won’t be held harmless for their circumstances or prior spending decisions. ESSER funding, which totaled $190 billion over three years, expired in September.

It also said states provided oversight on spending: A New York state district’s request for a community center was denied, and in Florida, Texas, Michigan, and Pennsylvania, upgrades or renovations to athletic facilities were not funded. But in New York state and Texas, the report said, ESSER money was allowed to “replace lost state funding and maintain basic operations.”

Chad Aldeman, an education researcher, columnist, and former policy director of the Economics Lab at Georgetown University, said large urban districts with high poverty rates received the largest share of ESSER grants.

Aldeman estimated that 129,000 teaching positions could be cut by summer 2026. His calculations are based on the student–teacher ratios that decreased between the 2018 to 2019 and 2023 to 2024 academic years with the hiring of more teachers with ESSER funds. He completed a spreadsheet that lists staffing levels in thousands of districts. To return to pre-pandemic levels, it shows, for example, Miami-Dade in Florida would need to cut 794 positions; San Francisco 647; Omaha, Nebraska, 290; and Hempstead in Nassau County, New York, 62.

“This has happened before,” Aldeman told The Epoch Times. “During the Great Recession, schools shed 364,000 jobs. It was a big decline in the public sector.”

All told, Washington state school districts spent $497 million over three years on additional teachers and other employees.

“If districts are unable to manage reductions via attrition, it is likely that the end of ESSER fundings will be followed by significant layoffs,” wrote one of the paper’s authors, Dan Goldhaber.

Many large school districts, including in Houston; San Diego; Anaheim, California; Hartford, Connecticut; Seattle; and Cleveland, grappled with deficits and job cuts at the end of the prior academic year.

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“We don’t know exactly when each of Michigan’s 800-plus local school districts will face these tough staffing decisions or how deep the personnel impacts will go,” the report states. “However, we are starting to see some examples play out as local boards and administrators grapple with the end of their federal relief aid and the realization that their schools are educating far fewer K–12 students than before the pandemic.”

The Epoch Times reached out to the American Federation of Teachers and the National Education Association teachers union but didn’t receive a response.

Because the pandemic was deemed a national emergency, ESSER funds were approved quickly with little oversight. It was assumed that school districts would use the money to provide remote learning, assure the safety of staff and students, and preserve school employment levels. The final phase of the program, ESSER III, stipulated that 20 percent of the funds must cover learning recovery efforts.

Ahead of this school year, the board of education for Memphis-Shelby County Schools (MSCS) in Tennessee cut 1,100 positions to save $68 million.

Board member Kevin Woods said during the meeting that the district’s decision to add more than 1,600 jobs largely funded by ESSER funds during the pandemic was appropriate at the time, even though the cuts, “which potentially impact people you love,” are painful now.

“This district likely played a vital role in stabilizing the local economy that kept families employed, the restaurants open, and kids in college,” he said. “As many of these dollars sunset, we must prepare for a new day under a new administration.”

The Buffalo City School District in New York state, which serves 30,000 students, employs 7,000, and received $289 million from ESSER, has a plan to climb down its fiscal cliff more gradually. The district added 400 employees between 2021 and 2023 and was forced to cut 226 of them this year. Most of those reductions were through attrition, but 10 employees, most of them teachers, were laid off, said chief financial officer Jim Barnes.

Under a four-year reduction plan, 200 positions will be cut through attrition next year, and two schools will be closed after 2026, Barnes said, adding that his district maintained a strong reserve fund before and during the pandemic and was able to apply $83 million from it to avoid further layoffs. The district continues to lose state aid because its enrollment declined by 4,000 students in five years.

“The most difficult part is the issues like learning loss, health concerns, and guidance needs haven’t gone away,” Barnes said. “We need everyone to return to traditional spending metrics.”

Small rural school districts fared better when the ESSER well ran dry.

Superintendent John Zimmerman told The Epoch Times that the cuts in the most recent budget were limited to five teaching positions his district shared with another district.

“We’re being pretty mindful going forward,” he said. “One-time money is hard to spend on people, because you can’t support it.”

In Vermont, budgets were already very tight with continuous enrollment declines and deteriorating school buildings that date back more than half a century, said Andrew Haas, superintendent of Windham Northeast Supervisory Union, the central office for four school districts that collectively service about 1,000 students in grades K–12. The $20 million for those districts covered security systems, the removal of building contaminants (polychlorinated biphenyls, or PCBs), and new heating and ventilation systems that were otherwise unaffordable.

Haas said he was able to keep most of the employees hired by ESSER dollars, and the three staff cuts were limited to central office communications and after-school programming administration in the central office. Some curriculums, summer programs, and teacher training programs were cut, and could be further reduced in the next budget.

“We purposely tried not to add too many positions, but this still hurts,” Haas told The Epoch Times. “We have kids that are still behind from the pandemic closures.”

In school districts across the country, expenditures during the three years also included student laptops, broadband improvements, teacher retention bonuses, new athletic facilities in some states, and other major capital projects.

“Congress was very flexible,” Aldeman said. “There wasn’t a clear goal or mission. Districts had a long wish list of things they wanted to do if they had the money, and ESSER allowed them to spend their money.”

Aldeman said he anticipates that most layoffs will occur at the end of this academic year and in the 2025 to 2026 academic year. With teacher unions, contracts often stipulate that the newer faculty members are the first to go. Districts will likely implement hiring freezes if they haven’t already, and then take cost-saving measures such as cutting after-school and summer programs, scaling back curriculum and technology purchases, and exploring shared services with neighboring districts.

“It wasn’t made clear to everyone that their jobs are tied to ESSER funds,” he said. “It’s going to be a tough time for school districts.”