As kids head back to the classroom in Kentucky this month, school districts are bracing for the loss of billions of dollars in vital federal funding that has greatly benefitted students the past several years. Next month, the third and final round of federal Elementary and Secondary School Emergency Relief (ESSER) funds expires. ESSER’s historic infusion of federal funds into public education — a total of $3.1 billion for Kentucky — has enabled schools to hire staff, raise wages and meet student needs even as the legislature’s funding of public schools has remained modest despite large state budget surpluses.
National research shows that Kentucky is among the states whose schools will feel the expiration of ESSER funds most deeply starting this school year. This loss exacerbates the funding challenges public education will face if Amendment 2 passes in November allowing the diversion of public resources to private school vouchers.
Federal ESSER funds have enabled districts to make much-needed investments
For the past several years, ESSER funding has enabled struggling school districts across the state to provide critical academic support to students, address social, emotional and mental health needs, promote physical safety and sustain school operations.
Funding amounts per student were greatest in high-poverty schools
On average, ESSER funding afforded school districts in Kentucky $4,264 per student for these investments — an average of $1,421 per-student per-year. District-level funding amounts varied widely, however, with federal formulas designed to provide higher poverty communities more ESSER funds.
In Kentucky, the five school districts with the largest amount of total ESSER funds per student were:
- Fulton Independent ($14,892)
- Middlesboro Independent ($13,865)
- Caverna Independent ($11,914)
- Newport Independent ($11,601)
- Clay County ($10,768)
The five school districts with the lowest amount of total ESSER funds per student were:
- Oldham County ($426)
- Fort Thomas Independent ($638)
- Beechwood Independent ($738)
- Anchorage Independent ($783)
- Walton Verona Independent ($1,001)
Funds have enabled school districts to invest in physical health and safety, student needs, mental health supports and the operation and continuity of services
Allowable uses for ESSER I and II funds were especially flexible, while ESSER III required that at least 20% of funds go specifically to addressing learning loss through interventions like summer and after school programs. ESSER expenditures are broadly categorized as: 1) addressing physical health and safety; 2) meeting students’ academic, social, emotional and other needs (excluding mental health supports); 3) mental health supports for students and staff; and 4) the operation and continuity of services in a district.
In 2021 and 2022 combined, Kentucky districts spent a total of $1.1 billion in ESSER funds to support:
- Physical Health and Safety – 11% ($120,545,371)
- Student Needs – 65% ($693,721,150)
- Mental Health Supports – 2% ($19,899,197)
- Operational Continuity – 22% ($238,566,615)
Kentucky school districts used ESSER III funds to address learning loss in 2022 through the following activities:
- Curriculum adoption related to addressing learning loss (99 districts)
- Summer learning (92 districts)
- Universal screening to gather data about students’ academic and social-emotional behavior (87 districts)
- Tutoring (85 districts)
- Unique student needs, such as students with low-incomes or disabilities, or who are “English learners,” racial/ethnic minorities, unhoused or in the foster care system (83 districts)
- Additional teachers (83 districts)
- Capacity building to support students (80 districts)
- Emotional well-being (75 districts)
- Afterschool programs (67 districts)
- Mental health needs (58 districts)
- Early childhood services (51 districts)
- Coordination of services (34 districts)
- Extended instructional time (33 districts)
- Other (10 districts)
Funds were used by districts to hire several thousand staff positions
Many Kentucky school districts hired additional teachers and other staff with ESSER dollars to provide these interventions and supports. According to a survey of districts by Kentucky’s Office of Educational Accountability (OEA), during the 2022-2023 school year approximately 2,379 certified staffing positions and 1,511 classified staffing positions were funded with ESSER dollars. Superintendents indicated that half of these positions were newly created.
Kentucky is among the states that will be hit hardest by the ESSER funding cliff
The expiration of the billions of dollars in ESSER funding is resulting in a “fiscal cliff” that will hit states like Kentucky particularly hard, especially its poorest districts.
A recent analysis by the Center on Budget and Policy Priorities (CBPP) highlighted Kentucky as one of 15 states that will experience the funding cliff particularly deeply because of:
- The size of the state’s average annual ESSER funding amount as a share of total education funding pre-pandemic. Kentucky’s total ESSER funding amount averaged across three years is 12.03% of all local, state and federal education spending for education. This share is the fourth-highest among all states. In addition, Kentucky’s averaged annual award amount for ESSER III alone is 7.5% of total educational expenditures (local, state and federal) in 2021, which is a larger share than all but four other states.
- The high proportion of school districts with more than 20% of students living in poverty. 63% of Kentucky school districts fall into this category.
- The high proportion of students attending a school district with more than 20% of students living in poverty. 51% of Kentucky students attend one of these districts.
ESSER was designed to provide higher levels of financial support to schools with the greatest needs. At the national level, schools with 0% to 25% of students qualifying for free or reduced price lunch (FRPL) received an average of $1,356 per student in total ESSER funds, compared to $6,228 per student in schools where 75% to 100% of students qualified for FRPL. As a result, there are concerning student equity implications associated with the fiscal cliff. These funds end even while Kentucky already has a historically large and growing gap in state and local dollars between the state’s poorest and wealthiest school districts.
Additional state investment in K-12 funding is one way to mitigate the ESSER fiscal cliff, but the biennial budget passed by the Kentucky General Assembly earlier this year did not provide adequate investment to stabilize districts’ financial situations during the post-ESSER transition — despite revenue being available to do so. Once inflation is factored in, the state’s spending on K-12 education approximately maintains prior years’ funding levels in fiscal years 2025 and 2026.
Kentucky superintendents say that ESSER funding helped address needs that existed prior to the pandemic — and will again go unmet without additional state investment
KyPolicy spoke with five superintendents about how their districts utilized ESSER funds, how these investments benefitted their schools and what the end of ESSER funds means. These superintendents were from eastern, western and northern parts of the state, and represented both small and larger districts, as well as urban and rural ones: Harlan County Independent Schools, Johnson County Public Schools, Rockcastle County Public Schools, Warren County Public Schools and Covington Independent Schools.
The superintendents emphasized that ESSER funding helped not only to meet immediate needs associated with the pandemic but also to address needs that existed prior to COVID-19 that will again go unmet without additional state investment.
“We spent a lot of money on PPE, furniture [needed for social distancing], and air filtration systems in all our classrooms. We did expand our bus fleet with ESSER dollars. We had fallen behind on that cycle of purchasing buses so we were able to get caught back up on that. We also expanded our summer school and after school offers, so all of our efforts were focused on improving the student experience and student instructions. We also increased our pay for our classified employees.” – Superintendent Carrie Ballinger, Rockcastle County Public Schools
“We put several million dollars into ventilation projects … tons of money in instructional resources. The state hadn’t funded new textbooks in forever, so we tried to buy new instructional resources in most areas if not all … we were able to upgrade our one-to-one technology in our district … Robust after school and summer school programs. Increased our pay in those programs … we already had summer school programs, but we really invested in not only getting more people there but also qualified teachers and there to stay. As we were able to bump the dollars, we were able to gain more certified teachers.” – Superintendent Alvin Garrison, Covington Independent Schools
The superintendents KyPolicy spoke with emphasized ESSER spending on facilities needs, operational continuity, student supports and staff raises:
Facilities – Kentucky school districts invested ESSER funding into longstanding facilities needs that also addressed pandemic-related physical health concerns. Several superintendents specifically mentioned Heating Ventilation and Air Conditioning (HVAC) projects that improved air quality, as well as new furniture that enabled social distancing. Johnson County Public Schools also spent funds on playground upgrades.
Operational Continuity– ESSER funds enabled Kentucky schools to continue providing academic instruction while school buildings were closed, make needed digital investments, improve curriculum, fill substitute positions and maintain transportation in the face of a bus driver shortage:
- Superintendent Charles Morton with Harlan County Independent Schools said his district lacked an online platform to provide curriculum and instruction remotely and spent a significant amount of ESSER money for these capabilities. He said ESSER funds enabled the district “accelerate the digital instruction expertise of faculty and staff in ways that otherwise would have taken them five or six years to get to.”
- Superintendent Rob Clayton with Warren County Schools similarly reported that curriculum was the district’s biggest ESSER expenditure.
- Johnson County Public Schools spent the bulk of its ESSER funding on high-quality instructor resources for distance and online learning, as well as Chromebooks that the district couldn’t otherwise have afforded.
- Rockcastle Public School District also spent significant ESSER funds on Chromebooks, and expanded its Career and Technical Education (CTE) programs and dual credit offerings for their students.
- Superintendent Clayton in Warren County reported using ESSER funds to double substitute teacher spending in order to at least temporarily address the extreme ongoing teacher shortage.
- ESSER funds also went to address transportation needs after two decades of the state providing less than the full amount it is obligated to cover, with some districts buying new buses and increasing pay for drivers.
Student Supports – Among the many academic supports for students that districts were able to fund through ESSER, Johnson County Public Schools hired literacy coaches as well as response to intervention (RTI) coaches that address students’ academic and social and behavioral competences. Warren County Public Schools created a teaching and learning coach position at each school with the idea that once ESSER funds ended, “those folks would roll back into our regular teaching staff.”
Superintendents also highlighted summer school to address learning loss and achievement gaps: “Another silver lining was a renewed focus on year-long instruction … even though times have changed, we still have continued to do that on a level that we did not prior to COVID” said Superintendent Morton, Harlan Independent Schools.
Superintendent Ballinger in Rockcastle County underscored the importance of ESSER spending on mental health supports: “We employed three mental health consultants within our district with the initial thought of once ESSER funding went away we would pull back and put them back into school counseling positions, but we have reached a point where there is absolutely no way we could operate without those employees.”
Raises – In addition to the significant ESSER spending on new staff described previously — such as academic coaches, mental health consultants and more substitute teachers — superintendents said their districts increased pay for substitute teachers and support staff such as cafeteria workers and bus drivers.
Given state funding levels for public education, the ESSER fiscal cliff will inevitably result in reductions in staff and services
The deadline for states to commit the final round of ESSER funds is September 30, and all dollars must be spent by the end of December. States can also apply for an extension to spend funds through March 2026. Just 13.7% of Kentucky’s ESSER funds are currently unspent, according to the most up-to-date reporting to the U.S. Department of Education.
As the ESSER funding cliff approaches, Kentucky school districts inevitably need to cut staff and scale back or eliminate services. Wealthier districts are more likely to be able to afford to maintain the educational improvements made possible through ESSER funds, while poorer districts are much less likely. As described by Superintendent Garrison in Covington, “[The loss of ESSER funds] widens the gaps between ‘haves’ and ‘have-nots’ and widens the inequities.”
According to the Brookings Institution, the need to make cuts will be especially challenging in districts that used ESSER funds to add staff or maintain existing capacity. Several superintendents we spoke with were at least temporarily able to secure grant funding to keep some of their new positions, including academic coaches in Johnson County and mental health consultants in Rockcastle County. However, in responding to the OEA survey, Kentucky superintendents indicated that they only planned to keep 20% of newly created positions. In other words, 1,500 positions were expected to be eliminated as districts planned for the ESSER funding cliff.
Other impacts may be somewhat further down the road as funding is no longer available to sustain or build on critical investments in facilities and technology. Superintendent Morton of Harlan County Public Schools said ESSER funds helped the district catch up on important purchases. But, he said, “it’s not going to take long before we are going to be looking at things like zero money for textbooks or school buses. Those things are going to rear their heads and it’s going to be tough unless there is more focus on public K-12 funding from the legislature.”
Amendment 2 would only exacerbate the ESSER fiscal cliff and other serious public school funding problems in Kentucky
The end of ESSER funds comes at the same time Kentuckians will consider Amendment 2 on the ballot this November. This proposed change to the constitution will allow an unlimited amount of public dollars to be diverted to private schools through voucher programs. A number of other states that lack Kentucky’s constitutional protections for public education have rapidly increased funding for voucher programs in recent years. If Amendment 2 passes and Kentucky implements a voucher program at the same scale Florida has today, it would cost the state budget approximately $1.2 billion per year.
Seven states that recently increased voucher spending also had declining state effort in public school funding. The Economic Policy Institute found that states with voucher programs spent $900 less per student on public education than states without vouchers in 2007, and $2,800 less per student by 2021.
ESSER funds provided a temporary glimpse of what is possible with additional resources to address both immediate and longstanding needs in Kentucky schools. But the end of those funds brings back severe funding challenges that will become much worse if Amendment 2 is approved.
