Updated: Georgia Risks Losing Billions in Federal Funds for Public Schools

UPDATE: On 8/6/21 the U.S. Department of Education released updated guidance on the calculation for Maintenance of Equity requirements for the American Rescue Plan Act. Under this new determination for state expenditures, Georgia will likely not be found in violation of the provisions. Regardless of future action by the federal agency, Georgia’s public school system continues to be held back by decades of budget cuts and the under-funding of necessary grants. For more information on the 2022 education budget, see the GBPI’s 2022 Budget Primer.


Without significant investment in the state’s public school system, the state of Georgia will violate a federal requirement for maintenance of equity in the American Rescue Plan (ARP) and will risk losing billions in federal relief aid. When Congress passed the ARP, they included the maintenance of equity provision as a condition for the Georgia Department of Education (GaDOE) and local school districts to receive $4.3 billion in the Elementary and Secondary School Emergency Relief (ARP ESSER) Fund.

This stipulation was put in place to ensure that states do not use federal dollars to cut state funding to districts with the highest needs, and/or make larger cuts to districts serving higher proportions of students living in poverty.[1] One part of this provision is an assurance that the state would not lower the Fiscal Year (FY) 2022 funding per child in the “highest-poverty” school districts below the amount provided in FY 2019.[2],[3]

The FY 2022 Georgia budget includes $383 million in cuts to the K-12 public education system.[4] FY 2019 was the last budget where schools in the state did not have a cut—one of only two such years in the last twenty. Guidance from the U.S. Department of Education (USDOE) explains how to find the state’s “highest-poverty” school districts using Small Area Income and Poverty Estimates (SAIPE) data.[5] Eighty-nine school districts in Georgia meet this classification. Using the USDOE guidelines, an analysis of state funding shows that eighteen of these school districts will receive fewer per pupil dollars in FY 2022 than in FY 2019.[6] These eighteen districts educate 30 percent of the students in the USDOE classification of “highest-poverty” school districts statewide.

Black Students Overrepresented in Districts with Less State Funding

Most of these school districts with the highest percentage of students living in poverty are in Georgia’s rural Black Belt.[7] Together, the eighteen districts’ enrollments are 64 percent Black, compared to 36 percent statewide.[8] The state’s history of the exclusion and/or mistreatment of Black students and communities, paired with the disproportionate harm of the pandemic on Black people, makes the situation more dire. Budget cuts already mean fewer resources for the current school year, but by violating this provision Georgia risks losing billions in federal aid that is needed to mitigate the damage of COVID-19 and continuing a pattern of underfunding Black communities.

Investments Pay Off

Georgia lawmakers have several common-sense avenues to invest in public schools and avoid potentially losing billions for the state’s children. The state’s Revenue Shortfall Reserve (RSR, or “rainy day fund”) held $2.7 billion at the end of FY 2020. State leaders could use a fraction of that savings account to end the pattern of consistent budget cuts to public schools via filling the current $383 million reduction. Ending these cuts would have the dual benefit of meeting the federal maintenance of equity provision and providing schools with basic resources to address the day-to-day needs of schooling outside of a pandemic.

For example, even before COVID killed tens of thousands of Georgians and upended our daily lives, school leaders struggled to meet the rising cost of student transportation, as evidenced by a 2019 survey.[9] The fact that state funding for student transportation has not kept up with actual need shows that ending budget cuts can only be a first step towards addressing adequacy in school finance.[10]

After the state has filled in the cuts for the current year, lawmakers should raise revenue by increasing the state’s rock-bottom tobacco tax and scaling back unproductive special-interest corporate tax credits. Georgians would quickly benefit from the $1 billion annual boost from increased revenues that could be used to shore up the health, criminal legal system and economic mobility systems—while also doing right by the state’s public school children.[11]

Endnotes

[1] U.S. Department of Education. (2021). Frequently asked questions. American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Program. Maintenance of equity (MOEquity) requirements. https://oese.ed.gov/files/2021/06/21-0099-MOEq-FAQs.-FINAL.pdf

[2] Note: The Georgia Budget and Policy Institute includes the phrase “highest-poverty” because this is the designation used by the U.S. Department of Education. Otherwise GBPI relies on titles such as “high percentage of students living in poverty” to denote that poverty is an economic condition, not a trait of a person.

[3] U.S. Department of Education. (2021). Frequently asked questions. American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Program. Maintenance of equity (MOEquity) requirements. https://oese.ed.gov/files/2021/06/21-0099-MOEq-FAQs.-FINAL.pdf

[4] Owens, S. (2021). Georgia education budget primer for state Fiscal Year 2022. Georgia Budget and Policy Institute. https://gbpi.org/georgia-education-budget-primer-for-state-fiscal-year-2022/

[5] U.S. Department of Education. (2021). Frequently asked questions. American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Program. Maintenance of equity (MOEquity) requirements. https://oese.ed.gov/files/2021/06/21-0099-MOEq-FAQs.-FINAL.pdf

[6] This analysis may differ from the one used by the GaDOE. After conversations with GaDOE representatives, it appears that the GaDOE analysis may include the full amount that the state calculates is needed to provide an adequate public education, but not the amount provided to school districts. Before providing state funds to schools, the state subtracts out an amount that represents a portion of the local property taxes (Local Five Mill Share). The GBPI interpretation of the USDOE guidance is that only the total state funds provided to districts should be used to determine whether the state has met maintenance of equity provisions: “State [maintenance of equity] considers the use of State funding sources only. Therefore, a state education agency (SEA) may not include Federal funds, local revenues, or support from private donors, such as charitable contributions that corporations or individuals make to elementary and secondary education.” Most importantly, with both methods of analysis there are still districts that receive fewer state dollars in FY 2022 than in FY 2019, triggering a potential violation of the provision.

[7] Owens, S. (2019). Education in Georgia’s Black Belt: Policy solutions to help overcome a history of exclusion. Georgia Budget and Policy Institute. https://gbpi.org/education-in-georgias-black-belt/

[8] Based on a GBPI analysis of Governors Office of Student Achievement Enrollment by Subgroup Programs. 2019-20. https://gosa.georgia.gov/dashboards-data-report-card/downloadable-data

[9] Aisami, L. (2019). Effects of school funding cuts continue to linger. Georgia Budget and Policy Institute. https://gbpi.org/wp-content/uploads/2020/04/K12Survey2019.pdf

[10] Owens, S. (2019). Georgia lawmakers should renew their commitment to student transportation. Georgia Budget and Policy Institute. https://gbpi.org/georgia-lawmakers-should-renew-their-commitment-to-student-transportation/

[11] Kanso, D. (2020). Georgia can’t afford another lost decade: Options to increase state revenues to close budget shortfalls. Georgia Budget and Policy Institute. https://gbpi.org/georgia-cant-afford-another-lost-decade-options-to-increase-state-revenues-to-close-budget-shortfalls/

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