The Edunomics Lab at Georgetown University hosted a webinar to present their financial forecast for school district budgets over the next four years. They outlined four current and upcoming atypical financial shocks that will impact school district budgets over the next four years:

  1. ESSER funds: school districts are experiencing a shock of extra money from ESSER funds that will end in September 2024.
  2. Enrollment declines: many districts are experiencing enrollment declines from the pandemic. These enrollment declines will be exasperated over the next decade due to declining birth rates.
  3. Inflation, labor scarcity, and new hiring: schools are increasing their recurring financial commitments with permanent raises and a growing number of staff.
  4. The economic slowdown will affect growth in state revenues: since the last recession, states have been experiencing steady revenue growth. The economic slowdown will most negatively impact districts that are more dependent on state revenue and those in states greater affected by economic slowdowns.

When adding together the impacts from each financial shock, the Edunomics Lab predicted that the net impact on school budgets is:

  1. In 2022-2023 school budgets are experiencing positive effects.
  2. In 2023-2024 the effects on school budgets will remain positive but to a lesser degree.
  3. In 2024-2025 school budgets will experience negative net financial effects.
  4. In 2025-2026 school budgets will experience negative net financial effects but to a lesser degree than in 2024-2025.

The impact of each financial shock will vary by state and district. The findings presented in the webinar are predictions. School districts, communities, and states should use these financial shock predictions to assess the financial needs of their communities and to prepare for negative impacts on school budgets.

Note: Landing page for the webinar: (link to slides and recording)

Image of Marguerite Roza, Ph.D., is Director of the Edunomics Lab and Research Professor at Georgetown University’s McCourt School of Public Policy, where she leads the Certificate in Education Finance program.

Written by Zoe Klein, Research and Policy Specialist at Learning First Alliance.