It’s not often that I get a chance to browse through school board agendas but once in a while I take a poke at Lakewood Public School District’s excellent platform. Here is an agenda item from last week’s Lakewood Board of Education’s meeting. For context, the Board is approving “changes to the ARP grant for the 2022-2023,” specifically the use of funds from the Biden Administration’s American Rescue Plan  (“ARP”) which, for the nation’s schools, comes in the form of federal emergency aid (close to $130 billion all in) distributed as “Elementary and Secondary Schools Emergency Relief Fund,” or ESSER:

• Reclassify the Building Improvement (LMS Cafeteria) from CRRSA (ESSER II) to the ARP (ESSER III) grant to provide adequate time for the project completion ($2,750,000).
• Tuition for Charter Schools ($8,785,397).
• Tuition for mandated services as per settlement agreements ($2,298,977).
• Transportation pursuant to N.J.S.A. 18A 39-1 et seq and N.J.A.C .6A:27-2 (which includes all public and nonpublic mandated transportation obligations including settlement orders to the extent of allocated grant funds) ($23,442,076).

First, kudos to Lakewood for its transparency in reporting to the public how it is spending its $109 million in federal emergency COVID school aid.  Only local journalism alerted Newark residents that the district was using half a million dollars in COVID emergency aid (also known as ESSER I, II, and II for Elementary and Secondary School Emergency Relief Fund) to buy floor-polishers instead of focusing this remarkable federal largesse on student learning loss. and retrofitting facilities to keep kids and staff safe.

But that’s where we’ll end our hallelujah chorus. 

While numerous think tanks, governmental groups, and analysts have warned districts about using COVID aid for recurring costs, Lakewood is doing just that: Sure, improvements to the cafeteria are kosher (one of the purposes of the money is to update facilities), but neither the federal nor state education department thinks it’s a smart move to spend $11 million on one year’s worth of non-district tuition or $23.5 million on one year’s worth of busing. 

Why?

When the COVID relief money runs out in two years, districts that used the temporary influx for permanent, recurring costs will face what economists call a “fiscal cliff”: 

Education Law Center: “Because these funds are non-recurring, they are meant to support COVID-19 recovery, but they are not to be relied on for regular annual expenses in school district budgets or for the creation of new programs and services that will require district funding going forward.”

Chalkbeat: “Experts suggest that schools should instead consider expenses like building repairs, short-term tutoring, or extended school day programs that use existing staff. During the last recession, schools had to make substantial cuts after federal funds dried up.”

Center for Reinventing Public Education: “Other districts have made clear they plan to use the new funding to plug holes in their budget, or perhaps, to delay a reckoning with future budget cuts. Anchorage Public Schools’ proposed budget would use ESSER funds to maintain staffing levels despite enrollment drops during the pandemic—a move that could place the district in a precarious financial position if students who left for private or homeschool options don’t return as hoped. Denver Public Schools is using funds to offset a budget deficit. Its chief financial officer says the district will gradually wean itself off the federal money over the next three years, but provides no detail.”

But this is so Lakewood. Last  year we reported the district was using the COVID money to plug its $70 annual budget hole so it only needed to “borrow” $24 million from the state. (Lakewood’s current “loan” that it will never pay back started in 2015 with $4.5 million and now is up to $135 million. Administrative Law Judge Susan M. Scarola calls this a “Ponzi scheme,” with Lakewood as Bernie Madoff and New Jersey taxpayers as his deluded investors.)

Now Lakewood is using one-time-short-term-not-for-recurring-costs federal cash to cover its tuchus despite a 400-student drop in enrollment and a $20 million increase in annual operating costs from last year to this year; meanwhile, three out of four Lakewood third-graders can’t read on grade-level and, district-wide, three out of four can’t do math on grade-level.

Technically these spending plans must be approved by the State Department of Education but competent staff members there are dropping like flies.

And, really, can you blame Lakewood families, almost all low-income and Hispanic, for voting with their feet and choosing public charter schools* over the district? In 2021-2022, the district reported zero in charter tuition payments; this year, it’s almost $9 million. Good to see government money well-spent. We’ll give the $50 million in tuition to ultra-Orthodox private schools a pass this time.

*I’m forced to use the Asbury Park Press as a source for the district budget because, inexplicably, the State DOE’s “user-friendly budget” database that is supposed to list every district’s annual budget doesn’t include Lakewood.