Impact of virus on schools varies

Local situations played role in scope

Each year, the Pennsylvania Association of School Business Officials puts out a report on the financial picture for school districts across the state.

In the newest version released Wednesday, one thing was crystal clear.

“The fact that we clearly know is that all school districts are negatively impacted by COVID,” said Hannah Barrick, PASBO assistant executive director.

What’s not as obvious, Barrick said, is what, exactly, that impact looks like. Each of the 500 school districts in the state has its own unique situation, she said, which means each district has experienced the pandemic slightly differently.

“While everyone is impacted, that scope is tremendously different,” she said.

The PASBO report tried to get a bit of a handle on the issue, painting a picture of some of the biggest statewide trends resulting from COVID-19. It is based on surveys of school leaders and business officials, as well as publicly available data.

Because the pandemic is an ongoing challenge, the report broke down its impact into three sections: the impact on last school year, the impact on the current year and the potential impact in future school years.

The 2019-20 school year

Much of last school year went just like some many before it had, the report said. Districts were facing their typical challenges, focusing their attention on things like the cost of charter school tuition and pension contributions or working to increase safety and security.

“On March 13, 2020, however, the normalcy of the 2019-20 school year came to a dramatic stop, as Governor (Tom) Wolf announced a school closure that ended up lasting for the remainder of the school year,” the report states. “Immediately, the world of K-12 education was thrown into chaos.”

The statewide shutdown of school buildings left districts scrambling to quickly change course to be able to provide students with remote learning.

Financially, the shift had positive and negative effects.

Based on data in the report, about 72% of districts reported lower transportation costs and more than 76% said their non-instructional costs were down.

But about 75% reported higher instructional costs and 73% had higher special education costs.

Dr. Andrew Armagost, research and advocacy manager at PASBO, said a common misconception is that because schools were closed districts saved a bunch of money. And while the PASBO report shows that was the case in some areas, in others it was not.

Districts were still paying staff and for things like charter school tuitions. And classroom supplies had mostly been purchased earlier in the school year before the pandemic hit.

On top of that, many district faced new costs associated with making sure students and staff were able to make the jump to remote learning.

A positive note for the 2019-20 school year was that local revenues didn’t take much of a hit. Because the pandemic hit toward the back end of the fiscal year, things like property taxes and earned income taxes were negatively impacted.

About 68% of school districts said their local reve

nues were up from the previous year.

That situation will likely change moving forward, Armagost said.

The 2020-21 school year

The overriding theme for the current school year is just how different education has looked, Barrick said.

Only about 30% of districts opened fully in-person five days a week, she said. About 20% were fully remote, and about 40% used a hybrid model with part remote and part inperson learning. The rest used a model that didn’t fit perfectly into any of the categories, she said.

And as the school year has progressed, Barrick said, district have had to be nimble, ready to pivot as the COVID-19 situation in their communities changed.

That has had a big financial impact on many districts, Barrick said, mostly through the need to purchase remote learning materials and safety equipment and with a need to reorganize staffs.

Jay Himes, leadership adviser at PASBO, said the survey showed one of the biggest challenges schools have faced this year has been with staffing.

Almost 90% of districts said it was “very difficult” to maintain professional staffing levels and nearly 85% said finding substitutes has been “difficult, if not impossible.”

Another financial impact of the pandemic has been a dramatic increase in students signing up for charter schools, particularly cybercharter schools.

Barrick said that while cybercharter enrollments have been growing, this year is really different, with the number of new enrollments doubling that of past years.

There has been an about 20,000 student increase in cyberschool enrollments, she said. About $350 million of the $485 million increase in charter school tuition costs across the state can be attributed to that enrollment increase.

Despite the current unprecedented situation, Armagost said, many districts across the state have avoided passing hardships onto taxpayers. More than half did not raise property taxes for the 2020-21 school year.

In Berks County, only eight of 18 districts raised property taxes for the 2020-21 school. Nine held the line, and Tulpehocken School District lowered its rate.

But that, along with decreasing or stagnant assessed property values in some areas, means districts are looking at decreased revenues this school year.

Armagost said 50% of districts expect a decrease in property tax collections, and 16% said they will likely have a significant decreased in earned income tax collections.

The 2021-22 school year and beyond

Much like the impact of COVID-19 so far has been different for different districts, what it means for the future varies as well.

Barrick said the scope of the negative impact the ongoing pandemic has is still largely unknown. But it will definitely have an impact.

“The COVID-19 pandemic is not a single year event,” the report states. “It has already impacted two fiscal years, and the 2021-22 school year will be no different. The only uncertainty is the extent of that impact and how school districts and the state will be positioned to respond when federal monies are depleted.”

That federal money is COVID-19 relief funding that is being funneled to school districts. Barrick said that while it is of great help, districts need to be wary of the fact that it won’t last forever.

A first round of funding expires in 2022, and recently approved funding will run out in 2023.

Districts must take into account that funding might not be replaced, and budget it accordingly.

“If they’re not careful to ensure they’re replaced, school districts will come out in significantly worse situations,” she said.

One way to help mitigate the issues is by the state increasing annual basic education subsidies, the largest stream of state money to local districts. The funding was not increased for the 2020-21 school year.

“If the state does not fund small annual increases, when a district is faced with higher costs the only options left are local tax increase and program or service reductions,” the report read.

School districts also reported they have concerns other than financial ones. Respondents to the surveys said they worried about students falling behind during remote learning, as well as future shortages of teachers and staff.

To view the full PASBO report visit pasbo.org/2021budget-report.

Local reaction

Local school officials said Wednesday that their districts have faced many of the challenges outlined in the PASBO report.

Dr. Richard H. Faidley, Wilson School District superintendent, said that as the district was finalizing its 2020-21 budget it had to deal with many unknowns in both the educational and economic environment caused by the pandemic.

Wilson was among the districts that did not raise taxes, Faidley said, instead opting to restructure some debt to create savings that could be used to bridge the gap caused by a projected decrease in revenues.

The district has also seen some expenses increase.

“In order to structure student learning to include in-person and remote learning models at the start of the school year and to continue that model to date, Wilson has faced operational and fiscal challenges in order to maintain social distancing in classrooms and remote instruction while remaining committed to providing the highest quality educational services for all our students,” Faidley said.

Faidley said federal COVID-19 funding has been helpful, but it does nothing to address things like the rising cost of cyber school tuition. The district saw its cost in that area rise 61% this school year.

Diane Richards, chief financial officer for the Gov. Mifflin School District, said Gov. Mifflin is expecting about $3 million in lost revenues this school year but did not increase property taxes to cover the gap.

The district has seen additional expenses for personal protective equipment, much of which has been covered by federal funds.

However the addition of a full-time social worker hired to help address the social and emotional needs of students and families during the pandemic, while initially covered by federal money, will be an added expense down the road.

The two biggest, unexpected areas where costs increased were $389,000 for an increase of 27 students enrolled in cyber charter schools and the added cost of transportation for the district’s hybrid instruction model.

Richards said the district has had to add bus runs because students are attending in-person for half days, with some students attending in the morning and some in the afternoon. It amounts to an increase of about $250,000.

Richards also said she is worried about the assessment value of properties declining in the future because of COVID-19’s impact on businesses, which would lead to less tax revenue for the district.

“The bottom line is any loss of revenue or any increase in expenses becomes an issue, regardless of amount, because budgets are so tight,” she said. “The pandemic sure made things challenging.”

Patricia Denicola, chief financial officer of the Boyertown School District, said Boyertown has seen cyber charter school enrollment grow by about 80%, technology costs increase to allow for remote and hybrid learning, and a jump in pandemic-related employee absences that have been hard to cover with a limited pool of substitutes.

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