The expiration of ESSER funds looms large over schools nationwide. Many educators fear potential job loss. Countless students face dwindling access to learning resources. Schools nationwide are managing a learning environment forever changed by the pandemic.
These federal relief funds were introduced during the COVID-19 pandemic to help schools tackle immediate needs such as 1-to-1 technology, additional staff, and enhanced support programs.1 While the final round of these funds is set to evaporate, COVID's impact on education hasn't disappeared. As this temporary lifeline fades, districts are grappling with a tough question: How will they sustain critical resources without ESSER?
Public Education Funding 101
Public school districts rely on a complex mix of federal, state, and local funding to cover their diverse operational and instructional needs. Once funding is secured, districts allocate resources to essential areas such as salaries, classroom supplies, technology, and special programs. These allocations also support extracurricular activities, special education services, and infrastructure projects.
The following provides a more detailed breakdown of the primary sources of school funding.2
Local Funding
Local funding, primarily sourced from property taxes, accounts for 44-45% of a typical school district's budget.3 Wealthier areas can generate higher revenue, enabling more robust support for educational programs, while districts in lower-income areas may struggle to meet even basic needs.
*Source3,4
These funds cover a variety of expenses, including operational costs, teacher and staff salaries, classroom materials, and facility maintenance or improvements.4
One key advantage of local funding is its flexibility. It allows districts to tailor resource allocation to their specific priorities, whether that means investing in new technology, maintaining smaller class sizes, or addressing unique community needs.
*Source3,5
State Funding
State funding typically accounts for 46-47% of a school district's budget and serves as a critical component in promoting equitable education.3 These funds are allocated using formulas that consider factors such as student enrollment, district size, and the unique needs of each community. This approach helps address disparities by providing additional support to districts with lower local revenue-raising capacities.
State funds are often directed toward foundational needs, such as establishing a minimum level of per-student funding, covering teacher salaries, supplying classroom materials, and maintaining facilities.5 Additionally, state funding frequently targets specific priorities, including closing gaps for at-risk students or providing services for those with special needs.
Federal Funding
Federal funding makes up a smaller portion of school district budgets, typically accounting for 7-14% of overall funding.3 Despite its relatively modest share, these funds are vital for addressing specific educational needs and supporting programs aimed at equity and inclusion. Federal funding is often directed toward targeted initiatives that supplement state and local resources, particularly for at-risk student populations.
*Source3,5
Key examples include Title I grants, which provide essential support to schools with high percentages of low-income students, and Individuals with Disabilities Education Act (IDEA) funds, which ensure special education services are available to students with disabilities.5
Additional federal funding supports English language learners, bilingual education programs, and other initiatives designed to bridge gaps for disadvantaged students. By focusing on these critical areas, federal funding helps ensure that all students have the opportunity to succeed, regardless of their socioeconomic background or unique learning needs.
*Source6
Grants and Donations
Grants and donations account for a small but impactful portion of school district funding, typically making up less than 1% of overall budgets.6 These funds come from a variety of sources, including federal and state grants, private foundations, and philanthropic contributions from individuals or organizations. While they represent a smaller share of resources, grants and donations often enable schools to pursue projects and programs that would otherwise be out of reach.
Private funding is frequently allocated to supplemental initiatives such as technology upgrades, extracurricular programs, specialized equipment, or professional development for teachers.7 These contributions provide schools with the flexibility to support innovative solutions and address specific community or student needs that public funding may not cover. The exact allocation of these funds can vary greatly, reflecting the unique priorities and circumstances of individual districts and schools.
The Cause and Effect of ESSER
The ESSER fund, introduced as part of the CARES Act, provided essential financial support to schools during the height of the COVID-19 pandemic.8 This funding addressed immediate and critical needs, including investments in remote learning technologies, health and safety measures including PPE and upgraded ventilation, and programs to mitigate pandemic-induced learning loss. By removing financial barriers, ESSER allowed schools to quickly adapt and support students and staff during an unprecedented crisis.
As the ESSER funds approach their spending deadline — January 28, 2025 — many districts face a "fiscal cliff."9 Schools that used ESSER for recurring costs, such as hiring additional staff, will now have to integrate these expenses back into their standard budgets. For example, some districts used ESSER to hire interventionists, counselors, and teachers to support mental health crises and academic recovery. Without sustainable funding, these positions are at risk, leaving schools vulnerable to staffing shortages and students vulnerable to unmet needs.
The transition away from ESSER funding forces districts to make difficult choices, including evaluating programs for cost-effectiveness, reducing budgets for non-essential programs, and seeking alternative funding sources through local tax increases or bond issues. However, these strategies are not guaranteed to succeed, leaving many schools to face ongoing financial pressures that could impact educational quality and equity for years to come.
How School Districts Are Navigating the End of ESSER Funds
As ESSER funds approach their expiration, public school districts are adopting a variety of strategies to manage the financial challenges ahead. Many administrators are rethinking budgets, exploring alternative funding sources, and prioritizing essential programs. Job cuts and layoffs are already increasing as districts adjust to the loss of these critical federal relief funds, leaving many educators and support staff uncertain about their futures.10
*Source11
To bridge the gap left by ESSER, districts are leveraging state and local funding where possible. Nearly half of 250 district leaders surveyed by the EdWeek Research Center indicated they plan to use state per-pupil operating funds to sustain key programs, though the availability of such funds varies widely across states.11
Others are turning to local tax revenue, Title I funds, and partnerships with nonprofits or private donors. However, these funding options are not universally available or sufficient. Rural districts, for example, may struggle with limited tax bases and voter opposition to new local tax initiatives or bond issues, further compounding the financial strain.
For many districts, creative solutions are necessary. Some are tapping into existing bond funds or exploring cost-saving measures, such as reducing energy expenses or evaluating the efficiency of current programs. Administrators are also seeking support from state legislatures, urging policymakers to increase funding for public education.
Despite these efforts, significant gaps remain, with 1 in 4 district leaders reporting no viable funding sources to replace ESSER.9 This financial uncertainty underscores the urgent need for long-term solutions to ensure schools can continue meeting the needs of students and educators in a post-pandemic world.
References
- Pew Trusts. (2024, August 14). End of pandemic funding for schools requires states and districts to plan. Pew Research and Analysis. https://www.pewtrusts.org/en/research-and-analysis/articles/2024/08/14/end-of-pandemic-funding-for-schools-requires-states-and-districts-to-plan
- ScribSoft. (n.d.). Funding alternatives for school districts navigating the end of ESSER. ScribSoft Blog. https://blog.scribsoft.com/blog/funding-alternatives-for-school-districts-navigating-the-end-of-esser
- USAFacts. (n.d.). How are public schools funded? USAFacts. https://usafacts.org/articles/how-are-public-schools-funded/
- Vanco Payments. (n.d.). How are school budgets determined? Vanco Payments Blog. https://www.vancopayments.com/education/blog/how-are-school-budgets-determined
- Peter G. Peterson Foundation. (n.d.). How is K-12 education funded? Peter G. Peterson Foundation. https://www.pgpf.org/article/how-is-k-12-education-funded/
- ScribSoft. (n.d.). Funding alternatives for school districts navigating the end of ESSER. ScribSoft Blog. https://blog.scribsoft.com/blog/funding-alternatives-for-school-districts-navigating-the-end-of-esser
- Education Commission of the States. (2024). 50-state comparison: K-12 funding 2024. ECS. https://www.ecs.org/50-state-comparison-k-12-funding-2024/
- School State Finance Project. (n.d.). ESSER funding. School State Finance Project. https://schoolstatefinance.org/issues/esser-funding
- https://www.k12dive.com/news/school-funding-esser-American-Rescue-Plan-covid-19-coronavirus/728352/
- Discovery Education. (n.d.). ESSER is winding down: What's next? Discovery Education Blog. https://blog.discoveryeducation.com/leadership/esser-is-winding-down-whats-next/?_gl=1*prszzs*_gcl_au*ODc4ODYyNDI0LjE3MzM0MzI2Nzg.*_ga*MTMyNjI2OTYzNi4xNzMzNDMyNjc4*_ga_QGF5X0KQV5*MTczMzQzMjY3OC4xLjEuMTczMzQzMjc1OS41Ny4wLjA
- EdWeek. (2023, December). When ESSER funds are gone: Here's where districts may turn to fill gaps. Education Week. https://www.edweek.org/leadership/when-esser-funds-are-gone-heres-where-districts-may-turn-to-fill-gaps/2023/12
