Never have Michigan public schools received such large sums of money in such a short amount of time as they did through federal Covid relief funds. Not only that, but school officials also have broad discretion on how to spend these additional resources. The main requirement is that the money be allocated in a certain amount of time — although it’s not clear what penalty would be enforced for districts that do not spend this money by a certain date.
Most school districts are challenged with spending a lot of money fast. The expenditure data from Michigan’s Center for Educational Performance and Information allow for a closer look at how schools have used this money so far. Table 1 shows the statewide totals of how school districts reported spending their Covid relief funds from the last three school years: 2019-20, 2020-21 and 2021-22. This funding came from 19 Covid-related grants, which are listed in Appendix A.
Altogether, school districts spent $2.58 billion of their Covid funds across these three school years. This constitutes about half of the total Covid aid granted to Michigan school districts. Districts have until September 2024 to spend the remaining funds.
It should be noted that funds were not distributed equally across school districts. Those serving a greater number of students from low-income households received significantly more dollars per pupil. Urban school districts received more money per pupil, in general, than districts located in suburban communities or small towns. Some districts, such as Flint, Detroit and Pontiac, received tens of thousands of dollars extra per student. Other districts, such as East Grand Rapids, DeWitt and Brighton, received just hundreds of dollars per student in Covid relief.[15]
Graphic 2: Total Covid spending by all public schools by category and year
About half of all education spending from 2020 to 2022 covered employee salaries and benefits. That is a well-documented, long-term trend in school finance: districts typically devote about half or more of their budgets to employee compensation. It is, however, interesting that almost the same percentage of Covid relief was spent on compensating employees. Across all three years, employee salaries and benefits made up 47%, or $1.2 billion, of total pandemic relief expenditures.
One plausible reason schools might spend such a large amount of pandemic relief on employee compensation is to hire new employees to address learning losses. State data show, however, that staffing levels did not increase significantly over this period. This suggests that schools used their Covid relief funds to boost the pay of existing employees rather than hire more of them.
State data show staffing trends for the number of full-time equivalent employees.[16] Between fall 2019 and fall 2022, overall staffing levels at schools increased by 5,800, or 3%. Most of that increase happened between 2021 and 2022, with districts adding nearly 5,000 employees in just one year. Even if each new employee hired by school districts cost an average of $100,000, that would amount to less than half of the Covid relief funds districts spent. A rough estimate then would be that districts have spent at least a quarter of all Covid relief so far on boosting the pay of existing employees.
Looking at the staffing changes by job category reveals that, in the years since Covid broke out, most growth occurred in the number of instructional coordinators, district-level administrators and administrative staff. Districts hired the equivalent of 666 new full-time instructional coordinators between 2019 and 2022, a more than 50% increase. They hired 1,198 more district administrators and administrative staff over the same period, an increase of 30%. On average, districts hired at least one new coordinator and two new district-level administrative employees.[*]
The number of teachers remained somewhat level, with an increase of 1% for all general education, special education and career and technical education teachers. That represents about 990 teachers. Interestingly, schools hired large numbers of career and technical teachers since 2019. Although the total number is small, with only 2,000 employed in 2022, staffing levels for career and technical teaching personnel have increased by 22% in three years and made up a third of the increase in teacher hirings over the period.
Overall, staffing levels did not increase drastically enough to suggest that the $1.2 billion of Covid aid slated for compensation was primarily devoted to mitigating learning losses incurred by prolonged school closures. With the additional $1.2 billion, Michigan school districts could have hired roughly 16,300 more full time-employees.[†] Although a portion of the funds may have been used to hire new employees, these findings support the idea that school districts mostly used Covid relief funds to pad existing employees’ compensation levels.
Graphic 3 shows the spending allocation of Covid relief funds for school years ending in 2020, 2021 and 2022. There are 15 different categories in which districts can report spending. More than 90% of all pandemic relief spending fell into just four of those categories: employee compensation, purchased services, supplies and capital expenses. As mentioned, the portion devoted to compensation was similar to the share allocated by districts in the year before Covid. But a much larger proportion of pandemic relief was spent on supplies (11% greater share) and purchased services (8% greater share) relative to 2018-19 allocations. In other words, school districts spent a greater proportion of Covid aid on purchased services and supplies than was spent in years prior to the pandemic. The increased spending on supplies and purchased services could represent efforts by districts to address learning loss and mitigate the effects of school closures, but it is difficult to determine more than this based on this data.
Graphic 3: Total Covid spending by all public schools in category percentages, 2019-2022
The increase in purchased services is particularly stark. This spending is when school districts contract with third-party vendors to provide services, such as pupil transportation, food service, building maintenance, administrative and personnel services and more. Twenty percent of Covid aid funded purchased services, which is nearly double the portion school districts normally spend on purchased services (11%). This trend suggests that school districts relied on third-party vendors to meet acute needs during the pandemic.
Similarly, districts spent three times the portion they normally spend on supplies. They devoted 16% of Covid relief to supplies, whereas they typically spend just 5% of their funds for this purpose. Supplies can include educational media, energy costs, hardware and tools, periodicals, testing materials and transportation supplies.
Schools spent the most on supplies in the second year of their Covid relief. In 2020-21, districts devoted 25% of all Covid relief to supplies, or $230 million. Of this, 60% was categorized as miscellaneous and 36% as teaching and testing materials.
A more granular analysis shows that, during that school year, 61% of pandemic funding for miscellaneous supplies was spent on “operating buildings services,” which includes heating, lighting, and air systems; repairing facilities and equipment; building leases; property and liability insurance; and janitorial and ground maintenance costs. About 10% covered “non instructional technology,” such as supporting networks, maintaining information systems, processing data, supervising technology personnel and hardware. This spending may reflect schools’ attempt to improve their facilities and technology in order to operate virtual learning courses and flexible scheduling for in-person classes.
[*] Despite this increase in hiring district-level administrators, the total number of administrative employees at school districts decreased slightly from fall 2019 to fall 2022. Including school-level administrators and support staff and school and district directors in the tally finds the total number of administrators fell by 179, a 0.7% decrease. The most significant decrease was in school-level administrators, whose numbers fell by 1,771, or 27%.
[†] This calculation is based on the average cost per employee which is determined by dividing the total amount districts spent on employee compensation by the number of full-time school employees districts employed during the 2018-19 school year.