ABSTRACT
Executive SummaryCongress responded to the COVID pandemic’s disruptions to instruction with unprecedented federal aid for school districts. Although this relief has been widely characterized as a major windfall for K–12 education, per-pupil amounts vary considerably across districts, as will the costs districts face for COVID mitigation and recovery. In this paper, we conduct simulations to understand the potential distribution of net effects of the pandemic and federal aid on the finances of local school districts in the next several years. In our baseline scenario, we assume one-time adjustment costs of $500 per pupil plus additional costs of $1,000 per student in poverty and $500 per student not in poverty per year for 4 years. Federal aid was distributed proportional to the long-standing Title I program, which sends more money per pupil to higher-poverty districts. Low-poverty districts are therefore projected to face some budgetary shortfalls, whereas many higher-poverty districts are projected to have excess funds, which they could direct toward long-standing challenges. Although our findings depend on key assumptions about the COVID-related costs, we find significant district-level variation in simulated net fiscal impacts, in part, but not completely, due to poverty rates across all the scenarios we consider.