A New York Times article last week looked at public school funding issues related to the pandemic. The new federal aid bill, which was signed by the president on Sunday, includes $54.3 billion for the elementary and secondary school emergency relief (ESSER) fund. (That’s on top of $13.5 billion for this purpose that was part of the CARES Act this spring.) But, according to the story,

school officials say that is not nearly enough to make up for the crushing losses state and local budgets have suffered during the pandemic, or the costs of both remote learning and attempts to bring students back to classrooms. . . .

The fiscal crisis is looming at a time when families fed up with pandemic-era education have increasingly turned to private and charter schools or chosen to educate their children at home. That is potentially a major drain on public school budgets because most states base school funding at least in part on enrollment numbers.

Indeed, according to Senate staff, of the $14 billion budgeted for Washington’s public schools for FY 2021, “$12.4 billion is tied to enrollment.” In November, the Caseload Forecast Council estimated that common schools enrollment in Washington would decrease by 3.4% from SY 2019–20 to SY 2020–21. Lower caseloads mean that maintenance level spending (the cost of continuing current services, adjusted for inflation and enrollment) will also be lower. Gov. Inslee’s 2021 supplemental budget proposal estimates that maintenance level spending for public schools in 2019–21 is down $738.7 million.

Gov. Inslee’s budget documents note that his budget proposal would use some of the K–12 savings “to meet critical needs, while using the rest to help balance the budget.” But there has already been talk from legislators about adopting some sort of hold harmless funding for districts.

According to the New York Times story,

Some states enacted policies protecting schools financially from pandemic-related enrollment dips. California lawmakers promised to use pre-pandemic student numbers to calculate school funding through the 2021-22 school year, to give districts the resources they needed to make schools safe and to prevent layoffs in communities where education is often a major employer.

But California entered the budget year with a projected surplus of nearly $6 billion. Grace periods were more limited in other states. Texas made its “hold harmless” policy contingent on schools having an option for in-person classes, and limited it, at first, to some of the fall semester, before extending it through the end of the calendar year.

In Washington, state appropriations for public schools for 2019–21 are currently $27.251 billion. Gov. Inslee proposes reducing that to $26.513 billion in the 2021 supplemental and then increasing appropriations to $28.688 billion for 2021–23. Washington’s schools received $216.9 million from the ESSER fund in the spring and, according to the Seattle Times, they could receive about $824 million from the new round of ESSER funding.

Finally, the New York Times claims, “Gov. Jay Inslee of Washington has proposed two new taxes to help pay for catching up students who fell behind during remote learning.” Later the story adds this detail: “Governor Inslee has proposed taxing capital gains and health insurers in Washington to help generate revenue to compensate for the pandemic’s disastrous impact in that state, including $400 million to address learning loss and inequities in educational access.” This isn’t accurate, except in the sense that money is fungible (across uses and time).

The $400 million to address learning loss that is in the governor’s 2021–23 budget proposal would be spent in FY 2022 (see page 184 of the bill). It would be used “to provide accelerated learning opportunities, student well-being supports and extra-curricular opportunities, and address student needs that are anticipated due to school closures and extended time in remote learning mode due to the COVID-19 pandemic.”

The covered lives assessment, which would be charged to health insurers, would not be effective until FY 2023, and it would be dedicated to foundational public health services—not education. Similarly, if the capital gains tax is enacted, revenues wouldn’t be collected until FY 2023.