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As school districts prepare for the end of federal COVID relief funding, the second annual Allovue Education Finance Survey finds that K-12 teachers and administrators have grown more pessimistic about the financial conditions in their districts and schools. A total of 1,855 educators responded to the 2023 survey, including 467 district leaders, 592 school leaders, and 796 teachers.

In 2022-2023, the Allovue Education Spending Confidence Index was developed to gauge educators’ level of optimism regarding their districts’ financial status. On a 600-point scale ranging from -300 (extremely pessimistic) to +300 (extremely optimistic), this year’s score was -67, down 29 points from last year’s score of -38. In a 10-person interview study that was a companion to this year’s survey, educators cited multiple concerns, such as the use of one-time COVID relief funds to pay for ongoing expenses; the rising cost of addressing student behavioral and mental health challenges; uncertainty around state budgets and local tax referenda; and expectations of a looming recession.

For the second year in a row, “funding that fails to keep pace with inflation” surfaced as educators’ number one concern related to district finance.

“Once those one-time monies are gone and we’re in the middle of a recession and we don’t have increased core revenue, we’ll be right back where we were before the pandemic,” a California principal predicted in an interview.

Same as last year, administrators involved in budgeting say their top challenges are long-range planning and accurate forecasting. Software is another concern, with roughly half saying their budgeting tools are out of date and in need of modernization, and only a quarter indicating that the software they use interacts or operates well with relevant programs and apps.

Also unchanged from 2022: teachers and administrators are most likely to attribute increasing per-pupil spending rates to increasing student needs.

“The mental health needs of kids since COVID not doubled, not tripled, quadrupled—or even more than that. I can’t even really put a number on that,” a district-level safety/at-risk coordinator in Tennessee said.

With nearly two-thirds of school and district leaders reporting that 10 percent or less of their COVID relief funding remains, educators have fewer resources available to address ongoing pandemic-related fallout. Seventy-three percent of respondents say that the end of these funds has had or will have a negative impact on their budgets. If districts do have to make budget cuts, administrators say they are most likely to reduce spending in professional development, contributions to savings/rainy day funds, and extracurriculars.

The survey also investigated knowledge of school resources beyond pandemic aid. Typically, the federal government supplies roughly 10 percent of all K-12 education funding. However, survey results suggest that educators generally overestimate this amount—the median guess was 20 percent. Survey results further suggest that educators generally underestimate per-pupil funding and the cost of teacher benefits.

According to follow-up interviews, these finance knowledge gaps ultimately make it more challenging for educators to advocate for resources, make informed decisions, and engage in long-range budget planning.

The second annual Allovue Education Finance Survey was commissioned by Allovue, a technology solution for K-12 financial management, and administered by the nonprofit, nonpartisan EdWeek Research Center in November 2023. The companion study interviews were conducted in December 2023 and January 2024 with a total of 10 teachers and administrators from eight states. Allovue was acquired by PowerSchool in 2024; visit www.powerschool.com/allovue/ to learn more.