Burbio School Tracker 10/30:  The Cliffs of Jersey

1.  Strategic plans are important documents for understanding a district's objectives, and suppliers to K-12 often require account teams to review them before engaging with districts.  Burbio's searchable database of K-12 strategic plans and LCAPs is now at over 3,000 districts covering over 66% of K-12 students.

This week we take a look at the differences in key terms mentioned in strategic plans by NCEC locale (City, Suburb, Town, Rural). For this exercise we looked at just under 2,000 strategic plans issued since 2020; we left out LCAPs, which are California plans issued annually that are much more detailed than plans in the other 49 states and can skew keyword comparisons. We also left out plans where the most recent plan doesn't have a date on it, even though many of them are more recent. 

Our first keyword is Community Engagement.  Below you can see the prevalence of the term declines gradually from City to Rural locale types:

2.   The Department of Education recently announced updates regarding ESSER III spending deadlines.  States and districts can now apply for 14-month extensions to spend funds which could carry spending into the Spring of 2026.  Our analysis indicates that at the end of Q3 there is just over $50 billion available to be spent. For perspective, Title I grants to LEAs in 2023 total $18.4 billion.  A breakdown of spending categories in Burbio's ESSER III dataset can be found here.

Even with the extension, districts can face a transition as Federal stimulus spending winds down. In previous weeks we have analyzed ESSER III spending as a proportion of district annual budgets in Pennsylvania and Texas.  This week we look at New Jersey.  To review our approach: 
 

• We focus on ESSER III as that is the overwhelming bulk of federal funding remaining.  ESSER III spending began scaling in the Spring of 2022 and has accelerated, but the spending will end up being back-loaded.  We estimate 40% of ESSER III funding will be spent during 2023-24 budget year.  

• Next, we took that 40% of a district's ESSER III allocation and divided it by the 2022/23 budgeted expenses for each district to calculate the percent of spending that a district may be looking at replacing on an ongoing basis as ESSER III expires. 

• There are other variables: for example, 2023-24 operating expenses aren't finalized, so the denominator in our equation (the 2022-23 Budgeted Expenses) may be low.  Districts are also eligible to spend ESSER III funds during 2024/25 and beyond and ESSER III may be a part of those budgets, so the funding drop-off won't be immediate.  Districts' ESSER III spending pace also varies. This is an effort to frame the scope of the issue.

Federal census data announced in May indicates New Jersey has the fourth highest per pupil spending of any state, behind New York, Vermont and Connecticut.  As a result of that higher baseline, the percent of dollars that Federal spending makes up of local budgets is lower than most states, and the size of the "cliff" in New Jersey is lower as well. 

Our first chart shows a distribution of New Jersey districts ESSER III funds as a percentage of their annual budget.  Over 86% of districts are looking at a loss of 3% of revenue or less when ESSER III expires:   

In contrast, in our Pennsylvania analysis, over 35% of districts had exposure of 5% or more, and in Texas it was over 50%.   

3.   This week we end with a breakdown of ESSER III spending from Illinois.  Through last month Illinois has spent 52.1% of its ESSER funding, and districts in the state have over $2 billion remaining.  Below is a breakout of remaining ESSER III allocation by size.  Two districts in the state have over $50 million remaining and 50 have between $5 million and $50 million remaining: