Did federal COVID aid impact state school spending?

Chalkbeat Ideas is a new section featuring reported columns on the big ideas and debates shaping American schools. Sign up for the Ideas newsletter to follow our work.Nearly $200 billion in federal COVID relief money left schools in a relatively strong financial position in recent years. But new data highlights a potential unintended consequence of all the federal aid: states cutting back on their own efforts to fund education. A report, released by the Albert Shanker Institute, a think tank affiliated with the American Federation of Teachers, tracks the share of each state’s economy devoted to public schools. Researchers call this “fiscal effort.” I like to think about it as the tax rate applied to the states’ economy to fund education (though it’s really multiple taxes). Crucially, this does not count federal dollars, just state and local money.By this measure, funding effort dropped sharply between 2020 and 2023, as the figure below from the report shows. This doesn’t mean that stat