The federal government has flooded the state with billions in COVID relief dollars through the CARES Act and the American Rescue Plan Act. Nowhere has more one-time money flooded into budgets than in public schools.
“Those funds are going away in time,” said State Superintendent Eric Mackey addressing the Permanent Joint Legislative Committee on Finance and Budgets-Education on Thursday.
“We are going to have that funding cliff that we have been talking about,” Mackey said.
“There are three tranches of federal money: Cares round one, Cares round 2, and then the American Rescue Act,” Mackey explained. “That money has to be spent by September 2024. The is only 18 months away.”
“In 2021 and 2022, you gave us the funding for summer reading camps – about $18 million a year,” Mackey said. “We have used federal set aside funds in 2023 and 2024.”
Much of those federal dollars went to local school systems directly, and that money was not appropriated by the Legislature, so it is being spent by local school boards and local school administrators.
Mackey warned that the federal government encouraged systems to use that one-time money to add staff, but there is no long-term funding mechanism for continuing to pay for those positions once the one-time money is exhausted.
“If you hired a teacher with these funds, you would for certain run out of money by September 2025, and it could be sooner than that,” Mackey said.
Mackey said the State Department of Education has a COVID relief dashboard on its website. There you can see the federal dollars that went to every school district, how much of that money is left, and how it has been spent.
Mackey used Gulf Shores in Baldwin County as an example.
“Gulf Shores has spent 66% of their federal funds,” Mackey said. “They were given $50.04 million between all three tranches (of money). $33 million has already been spent. Some districts have only spent 25 percent of their money. In some rural districts, they can’t find the people. The teacher shortage is one issue. In some cases, they can’t find teacher aides in their communities. I never thought I would see the day where we had more money but can’t find the people.”
“The last tranche of money runs out in September 2024,” Mackey said.
The money presently has to be spent by then. Mackey explained, however, that if they contracted to buy a piece of equipment, but due to supply chain issues, it has not arrived yet. The system could still use those federal dollars for that purchase even if it does not occur until after the September 30, 2024, deadline. Mackey is optimistic that the U.S. Treasury will allow the state and school systems to have another year to spend all of that one-time federal money, but presently the deadline is still September 30, 2024.
None of this is a problem in the fiscal year 2024 budget that the Legislature will prepare to go into effect on October 1. The fiscal cliff comes into effect in the 2025 fiscal year budget when school systems look to the state or their local school boards to make up those funds, or schools will have to cut positions and programs funded with these one-time federal dollars.
In the 2023 education trust fund (ETF) budget, the Legislature appropriated $8,261,590,649 for education, an increase of $589,014,074 from fiscal year 2022.
The 2023 Alabama Legislative Regular Session begins on Tuesday, March 7.
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