Despite the dire forecast for education funding, some California schools may soon find themselves doing something counter-intuitive: returning money to the government.

The deadline for committing federal COVID-19 relief money is Sept. 30, and schools that haven’t planned to spend their money by then or received an extension must send it back to the U.S. Department of Education.

“It’s not a hard fiscal cliff, but it’s a big deal because it’s the last time districts can make decisions about how to spend this money,” said Bella DiMarco, a policy analyst for FutureEd, an education think tank at Georgetown University’s McCourt School of Public Policy. “Some districts have been planning for this from Day One, but others are going to be scrambling at the last minute.”

Dozens of California school districts still hadn’t spent the majority of their Elementary and Secondary School Emergency Relief Act money as of Aug. 28, according to a database compiled by Georgetown’s Edunomics Laboratory. In some cases, districts risked leaving millions of dollars on the table.

Overall, California schools hadn’t yet spent $1.8 billion of the $13.5 billion they were allotted when the final – and largest – of the pandemic relief grants rolled out in 2021.

School districts contacted by CalMatters said they intend to spend the money before the deadline, or had already committed it to vendors — such as organizations providing after-school programs — but there was a lag in the paperwork.

The pandemic relief funds were an unprecedented windfall for schools, intended to help them reopen safely for in-person instruction and help students who fell behind during remote learning. In all, the federal government gave $190 billion to schools through several waves of COVID relief grants.

By mid-September, most of California’s largest districts — including Los Angeles Unified, San Diego Unified, San Francisco Unified and Elk Grove Unified — had spent close to all their funds. A few, such as Fresno Unified, had unspent millions but did not respond to requests for an explanation.

Long Beach Unified, with 64,000 students, still had not spent $66 million — roughly 30% — of its $212 million allotment. The district plans to spend it all by the deadline on needs including playground equipment ($11 million) and classroom modernization ($14 million), said spokesperson Elvia Cano.

“While we have carefully paced our spending to maximize impact, we remain on track to allocate the remaining resources before the deadline,” Cano said.

Students during class at Lake Marie Elementary School in Whittier on Nov. 17, 2022. Photo by Lauren Justice for CalMatters

The end of pandemic relief grants comes at a precarious time for schools. While Gov. Gavin Newsom largely spared K-12 schools from cuts in his budget, the future could be grim as enrollment continues to decline, absenteeism remains high and the economy remains uncertain. Los Angeles Unified, for example, has seen its enrollment drop by 20% over the past decade, while absenteeism was higher than 30% last year. Because California funds its schools based on the number of students who show up every day, those empty seats mean the district receives millions less from the state.

School districts relied on their pandemic relief grants to pay for one-time investments they might not have been able to afford otherwise, like new heating, air conditioning and ventilation systems. They also spent the money on tutoring, after-school programs and mental health services to help students catch up academically and regain social-emotional skills. And some districts used the money to hire permanent staff or raise teacher salaries, which puts them in a vulnerable position as grant funding expires.

“Even if you’re a district that didn’t get a lot of (pandemic relief) money, you might have some tough budget decisions ahead,” said Julien Lafortune, a researcher at the Public Policy Institute of California who studies school funding.

School districts have known for almost four years that the money would be ending, and should not be blindsided by the cut-off, said Rebecca Thiess, who manages fiscal research at the Pew Charitable Trusts. They should have evaluated their spending to see what worked, what didn’t, and how they’d fund programs going forward.

“Schools received a lot of funding, which provided an opportunity for a lot of new programs and investments,” she said. “But they should have approached this opportunity mindfully so they’re not in a difficult position when the money runs out.”

Pandemic relief money wasn’t quite no-strings-attached, which is one reason for some districts’ slow spending, said Tatia Davenport, chief executive of the California Association of School Business Officials. The guidelines and reporting requirements were complicated, which was a big strain on districts with small administrative staffs, she said. Those districts also struggled to launch new programs because staff were already overburdened.

Davenport’s group is advising districts with surplus relief money to look back over recent expenses and see if anything can be paid for with pandemic grant money.

Ocean View School District, a TK-8 district in Huntington Beach in Orange County, used some of its relief money to lower class sizes. At first, the plan was to have fewer people in each classroom so students could return safely — and sooner — for in-person instruction. The lower student-to-teacher ratio was also intended to help boost student mental health and teacher morale.

The idea proved so popular that the district kept the smaller class sizes even after the threat of COVID-19 waned.

“Who doesn’t like smaller class sizes? Teachers loved it, students loved it, families loved it,” said Julianne Hoefer, interim superintendent. “It allowed us to build connections with students, nurture relationships, help students make up for learning gaps.”

The district also used relief grants to start a five-week summer program that included academic tutoring as well as games, field trips and other fun activities to boost student engagement. Students also got two meals a day.

First: District School Nurse Sofia Felix checks student Audrey Hernandez’s vitals in the nurse’s office at Sheridan Elementary School. Last: A ninth-grade class goes over their lesson in the student outdoor learning pavilion at Orange Cove High School in Orange Cove on Sept. 23, 2024. Photos by Larry Valenzuela, CalMatters/CatchLight Local

The program was “immensely popular” with families, more than half of whom are low income.

But with pandemic grants ending, the district now has to find a way to continue paying for the initiatives. It recently laid off 16 staff members, its first layoffs in recent memory.

“We have to figure out how to keep these programs,” Hoefer said. “So far, one-time money keeps showing up but we’d like to find a permanent funding stream.”

In Kings Canyon Unified, southeast of Fresno, the district has avoided layoffs because it spent most of its relief money on infrastructure improvements. The district hired a slew of temporary employees — counselors, health aides and teachers — but was able to find permanent funding to keep most of them on staff.

“We knew we had to be really smart about how we use this money, because we’ll never see this kind of funding again,” said Jose Guzman, assistant superintendent. “Our priority was to make kids safe, but also to make these investments sustainable.”

Using its pandemic grant money, the district built nine health centers, with nurses, separate entrances and bathrooms for sick students. The centers helped keep students and staff safe during the pandemic and beyond.

Among the district’s most popular projects were outdoor classrooms, dubbed “learning pavilions,” at five school campuses. Initially the pavilions were for COVID-19 safety, but students and teachers liked them so much they’re still used regularly. Not only do they reduce exposure to communicable diseases, Guzman said, but they boost mental health, as well.

“Our goal was to make our kids safe and happy, and this is what we did,” Guzman said. “Our community truly appreciates that.”

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