The termination of the federal Elementary and Secondary School Emergency Relief (ESSER) funding in September 2024 could potentially lead to substantial budget deficits in numerous school districts across the country. Furthermore, there is a possibility that the COVID-era program may expire with unutilized funds.

According to a study released by the Center on Budget and Policy Priorities (CBPP), a think tank based in Washington, D.C., ESSER funding has provided schools with nearly $200 billion. This funding was allocated through three different legislations: the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020; the Coronavirus Response and Relief Supplemental Appropriations Act of 2021; and the American Rescue Plan of 2021. However, many states have become dependent on this financial support, which now accounts for between 5% and 11% of their K-12 education revenues.

The CBPP paper, titled "Expiration of Federal K-12 Emergency Funds Could Pose Challenges for States," warns that after Sept. 30, 2024, ESSER funding will no longer be accessible. The cessation of these funds combined with factors such as inflation, state tax cuts, and resource reallocation to school vouchers could pose significant challenges for states and school districts. These challenges could manifest as teacher layoffs, school closures, and reductions in student programming.

"The expiration of these resources will create a fiscal cliff for school districts, which will need to figure out how to make up for the lost dollars or significantly reduce services," stated the CBPP paper.

The CBPP paper also highlighted another impending issue: more than half of ESSER III funds remain unspent in 13 states and the District of Columbia due to reasons such as staff vacancies, hiring difficulties, and supply chain delays for capital projects.

"If school districts fail to obligate their ESSER III funds by the end of September, they will lose them entirely," the CBPP paper cautioned.