Navigating the ESSER fiscal cliff: Tapping into unspent funds and leveraging transportation solutions

As many in the K–12 education sphere are aware, the threat of a fiscal cliff looms large as the largest portion of ESSER funds must be obligated by September 2024, and spent by March 2026. Consequently, school districts face two challenges: determining how to best utilize unspent ESSER funds before they expire, and then deciding how to fill budget gaps once those funds are no longer available.

In this article, we’ll further explain the implications of the fiscal cliff, then focus on the first of the two challenges mentioned above: determining the most sustainable use of unspent ESSER funds between now and September 2024.

Understanding the ESSER fiscal cliff and its consequences

In March 2020, Congress issued three rounds of stimulus funding through the Elementary and Secondary School Emergency Relief Fund (ESSER), totaling $189 billion. These funds were meant to address learning loss and other impacts of the COVID-19 pandemic. 

Marguerite Roza, who works as an education finance researcher and director of Georgetown University’s Edunomics Lab, indicated that, on average, most districts will need to cut per-student costs by $1,200 for the 2024–2025 school year due to ESSER funding expiration. She also indicated that districts most likely to be hit hardest by these budget cuts include those relying on ESSER funds for long-term, ongoing financial commitments.

Examples of recurring financial commitments include increasing staff size and offering current employees larger-than-usual, permanent raises. Other examples include purchasing long-term, fixed assets that require ongoing maintenance and upkeep, including school buses.

If your school district is offering higher pay and other incentives to attract new bus drivers amidst the school bus driver shortage, these decisions are also long-term financial commitments.

Utilizing ESSER funds for transportation solutions

There’s no question that the fiscal cliff will pose significant financial challenges for school districts, with many experts predicting that the 2024–2025 school year will be particularly difficult. Still, school districts must balance careful planning for 2024 and beyond while getting the most out of ESSER funds while they still can. 

And while many school districts have unspent ESSER funds, they may not know that ESSER funds can be used to pay for transportation solutions that support students recovering from the pandemic’s impact. Accepted use cases include transportation that:

• Supports daily attendance at school to address the impact of lost instructional time
• Helps solve chronic absenteeism
• Helps students get to before or after-school programs or tutoring to address learning loss
• Helps students get to appointments and activities that address the social, emotional, mental health and academic needs of students — including extended school year learning or other compensatory and related services for eligible students under the Individuals with Disabilities Education Act

When investing in transportation solutions that help solve these problems, it’s important to remember to balance new investments using ESSER funds with associated long-term maintenance and hiring costs.

As a result, more and more school districts are turning to transportation solutions, including HopSkipDrive, to solve ESSER-relevant transportation issues in a sustainable way given HopSkipDrive’s ability to dynamically respond to a district’s needs.

How HopSkipDrive can help solve transportation challenges — with and without ESSER funds

HopSkipDrive’s model, in which you only pay for the rides you use, allows school districts to secure safe, reliable transportation for students who need it while ESSER funds remain available — without worsening the consequences of the impending fiscal cliff.  

We also support districts in leveraging various other funding sources. In addition to ESSER funds, we help districts access federal McKinney-Vento funds; state transportation allotments; and other federal, state or local funding sources. 

For instance, we worked with Tolleson Union High School District (TUHSD) to win an A for Arizona Transportation Modernization Grant. We then collaborated with TUHSD to create a hub-and-spoke transportation model aimed at fulfilling transportation needs for open-enrollment students who live outside district boundaries. 

Our goal is to support school districts by helping them identify sustainable funding sources and improve transportation efficiencies for all students, particularly the most vulnerable populations — both with ESSER funding and once it expires. 

If you’d like to learn more about HopSkipDrive, get a free quote here!

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