Dive Brief:

• The U.S. Department of Education on Wednesday released highly anticipated guidance on maintenance of equity requirements under the American Rescue Plan, the first of the three COVID-19 relief packages to formally prioritize it in Elementary and Secondary School Emergency Relief funding. The provision ensures states and districts don't make excessive cuts to supplant funding rather than supplementing it, which would disproportionately impact underserved districts and make the additional federal funding essentially ineffective.
• Under the guidance, states cannot disproportionately reduce per-pupil spending for high-need districts and dip per-pupil spending below fiscal year 2019 levels for the highest-poverty districts. The provision also prevents districts from disproportionately reducing state and local per-pupil funding for high-poverty schools, and from disproportionately reducing the number of full-time-equivalent staff per student in those schools.
• Maintenance of equity requirements will last until the end of fiscal year 2023, which would mean the end of the 2022-23 school year for districts. Districts should identify highest-need schools by ranking the schools' percentages of low-income students, ranked either district-wide or broken down by grade, with those in the top quartile considered the highest-poverty. 

Dive Insight:

Prior to the guidance, education finance experts and superintendents worried states would cut their funding and backfill their education allocations with the new federal funds. Supplanting rather than supplementing would have impacted the highest-need districts and schools the most, but maintenance of equity is designed to avert that.

"The guidance is a welcome document, in that it helps SEAs and LEAs better understand how to implement this new mandate," Noelle Ellerson Ng, associate executive director of advocacy and governance of AASA, The School Superintendents Association, said in an email.

When the American Rescue Plan included the requirement, many welcomed its intention but remained confounded by the new provision that was absent from previous rounds of relief funding.

"We don’t even really know what it means. It’s subject to interpretation because it’s new," said Michael Hinojosa, superintendent of Dallas Independent School District in Texas, in mid-May. "What I’m worried about is when [the requirement] expires in three years, what happens then, and what does that really mean? We’ll have just to pay close attention." 

While the provision kicks in immediately, district leaders should use caution when implementing its requirements and spending ARP dollars, added Hinojosa. The guidance, while not a law, is something district leaders and states must agree to in order to receive federal funds.

In a presentation last month, the Edunomics Lab, an education finance and policy research center at Georgetown University, said it identified trends that were "some reason for concern" in how districts were spending their ARP money. Many were not targeting the highest-need students, instead continuing with investments that looked like "business-as-usual," said Chad Aldeman, policy director of Edunomics Lab, in an email.

For example, districts were spending on things like "thank you payments to staff," filling budget gaps, hiring teachers and counselors, and taking up facilities projects, rather than personalized learning loss solutions such as tutors, adjusted school calendars, different content delivery models and flexible spending for schools. 

However, the research center did agree the trends were an early snapshot rather than the whole picture, and that districts' plans were still in the making. "Lots could change," said Aldeman.