What lower than expected Enrollment Stabilization Grant funding means for schools - AZEdNews
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What lower than expected Enrollment Stabilization Grant funding means for schools

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Arizona public schools share what they are doing to deal with the lower-than-expected amount of Enrollment Stabilization Grants that they learned about in letters they received just last week.

In June 2020, Gov. Doug Ducey set aside $370 million in federal CARES Act funds for Enrollment Stabilization Grants to help protect schools’ budgets against an anticipated decline in enrollment due to the COVID-19 pandemic by ensuring that schools received at least 98 percent of their previous year’s state funding.

But requests for the funding were more than the money allocated for it, so reductions were made in the amounts that schools received.

“The estimator tool indicated that we would receive $6.5 million; however, the proportional deduction statewide reduced our allocation down to about $5.2 million,” said Renée Ryon, director of communications & public relations for Dysart Unified School District, which serves 24,000 students in El Mirage, Glendale, Surprise, Youngtown, and Maricopa County. “However, our budget reduction was only $4.3 million because we had already anticipated reduced enrollment before we submitted our budget.”

Dysart Unified “has incurred a lot of additional expenses with some federal support to cover them, but the costs continue, and the reductions have certainly had an impact on our district,” Ryon said.

Initial communication in July when the program was rolled out indicated that districts would receive at least the greater of 98 percent of last year’s enrollment or 105 percent of this year’s enrollment as of the 40th day of instruction, said Chris Kotterman, director of governmental relations for Arizona School Boards Association.

“Districts then estimated that number and planned accordingly based on assurances that if the initial $370 million was not sufficient, additional funds would be made available,” Kotterman said.

“At some unknown point, when it became clear that enrollment had decreased by more than expected and the calculated award amounts would far exceed $370 million, the decision was made by the governor’s office to cap the program at $370 million.”

What it means for school districts

Schools budget for the year based on expected revenue because there are serious consequences for going over budget by a significant amount, Kotterman said.

“The further you go into the school year, the harder it is to adjust to a significant decrease in revenue because you have less time to spread it out,” Kotterman said. “So, losing a significant amount of funding you planned for the year in December is much harder than cutting that same amount in July or August.”

Peoria Unified School District “expected to receive approximately $14,553,503 based on the 98 percent of the prior year funding Enrollment Stabilization Grant criteria, and we received $11,431,732,” said Michelle Myers, chief financial officer for the district that serves 36,000 students in Glendale, Peoria, Surprise and Youngtown.

Because of this, “we will have to use Maintenance & Operations budget carry forward from Fiscal year 2020 to offset the difference.  This will reduce opportunities for students, teachers and staff that normally would be paid for from M&O,” Myers said.

Parker Unified School District Supt. Brad Sale said, “By using the Enrollment Stabilization Grant award estimator, I estimated that Parker Unified would receive an award of $658,155. Our actual award was $608,493.”

The difference of $49,662 was not expected, “but in the overall scheme of things, it could have been worse,” Supt. Sale said.

“While the discrepancy between what we thought we were getting compared to the amount we actually got stings, it is not life threatening to our district,” Supt. Sale said. 

Parker Unified, which serves about 2,000 students in five schools in the county seat of La Paz County,  will not allow this to influence or effect the way teachers instruct students and interact with them, Supt. Sale said. 

“Our students will not feel this discrepancy in any way, shape, or form,” Supt. Sales said. “Our job is to make sure our teachers have the resources needed to provide a high-quality education to our students.” 

How the funding helped

Supt. Sales thanked Gov. Ducey for setting aside the $370 million to help schools cover the costs of COVID-19 and helping offset the loss of student enrollment. 

“Without the Enrollment Stabilization Grant, Parker Unified would have survived this year, but barely,” Supt. Sale said. “Without the Enrollment Stabilization Grant, we would have been laying off both certified and classified staff members for fiscal year 2022 as we were using every means necessary to make it through Fiscal Year 2021 with no guarantee that the students who are not attending this fiscal year will return next fiscal year.”

“Because of the Enrollment Stabilization Grant, I know we will be able to make it through to the end of the year without having to lay people off, and in a small community that is good news,” Supt. Sale said.

Dysart is in a good position with our finances, because of our caution in budgeting for the year, and diligence in reducing costs and seeking out additional funding sources, such as COVID-related reimbursements to help fill the gaps, Ryon said.

“We anticipated a budget shortfall due to COVID, and accounted for that in our 20-21 budget,” Ryon said. “In addition, our enrollment was reduced by less than 2%, a testament that we listened to our community and provided multiple class-format options that fit everyone’s needs, while taking into account appropriate health and safety measures.” 

What’s next

There had to be a different way to make sure the enrollment for schools was stable, Supt. Sale said.

“In many of our small rural communities, the school is the center of everything in the community as well as the largest employer,” Supt. Sale said.

“This year was difficult with the unknowns of student enrollment, whether or not we will get to stay open, and all of the additional costs to be able to open as safe as possible,” Supt Sale said.

“The governor and legislators should have worked together with school leaders to find the best way to keep our schools open and providing the best education possible to our children,” Supt. Sale said.

The governor’s office has not indicated they are willing to make more money available, and it’s not clear how much relief funding they have left, said Kotterman with ASBA.

“Districts can draw down other relief funds from the Arizona Department of Education if they need them, but most were probably already planning on using those dollars for different things, meaning that they will still have to rearrange priorities,” Kotterman said.

“The only hope of truly new money before January lies with additional federal appropriations,” Kotterman said. “There has been activity around another COVID relief bill but whether it will get done before the new year and/or new administration is a big question right now.”

“We are going to the Legislature now to let them know of this issue, hoping that they will be able to direct some state general fund savings from lower enrollment back to schools to help close this gap, but they are unable to act until they come back in January at the earliest,” Kotterman said.

“We are hopeful that through the legislative process additional stabilization funding will be identified due to state budgeted school district funding payments being lower than anticipated due to Fiscal Year 2021 enrollment declining for a majority of districts in the state,” said Myers with Peoria Unified.