School Expenditures in NC During the COVID-19 Pandemic

To address both the funding and academic challenges caused by the COVID-19 pandemic, the federal government issued over $190.5 billion in Elementary and Secondary School Emergency Funds (ESSER), of which $5.6 billion was distributed to North Carolina schools.

ESSER Funds and Per Pupil Expenditures

Made in three allotments, ESSER provided state and local education agencies with one-time funds to support schools and school programming during the pandemic and subsequent learning recovery efforts. The last of this funding, known as ESSER III, was distributed at the end of 2021 as part of the American Rescue Plan. All ESSER funding must be spent by the end of September 2024 and, although these funds were always understood to be one-time funds, there are concerns about a looming “fiscal cliff” and a potential negative impact on students when funding returns to typical levels.

Beginning in 2020–21, the influx of federal COVID relief funding increased the percentage of North Carolina public school funding that came from the federal government. Typically, federal funds account for 10% of all school funding. This percentage peaked at 20% in 2021–22, before decreasing to 14% in 2022–23.

Figure 1: K-12 Public Education per Pupil Expenditures, Inflation-Adjusted to 2023 Dollars, by Source (2018–19 to 2022–23)

Expenditure of COVID Relief Funding

The North Carolina Department of Public Instruction (NC DPI) has created an interactive dashboard to track expenditures of COVID relief funding, including funding from ESSER, the COVID Recovery Fund (CRF), the Governor’s Emergency Education Relief Fund (GEER), and state funding. Figure 2 examines school and district expenditures by category, illustrating the way funding priorities have shifted over time.

Figure 2: COVID-19 Relief Funds Spending by K-12 Public School Units, by Category (2019–20 to 2023–24)

The majority of COVID relief funding (55%) has been spent on salaries and benefits for school staff with approximately 20% of all funding used to supplement educator contracts in the form of one-time bonus pay, mostly in 2021–22. While salaries and incentives for educators remained the top expense in 2022–23 and 2023–24, many districts have begun to allocate a greater portion of funding towards Capital Outlay (i.e., facilities) to update and maintain infrastructure in school buildings.

As of April 2024, 40 LEAs have 10% or more of their COVID relief funding remaining, while 75 LEAs have less than 10% remaining, including three districts which have spent all of their COVID relief funding.

Looking Ahead

In order to understand how ESSER funds have contributed to learning recovery and academic improvement, NC DPI’s Office of Learning Recovery and Acceleration (OLR) will continue to investigate the outcomes of programs and policies that were supported by ESSER funding. By evaluating the return on investment, policymakers can better understand how educational supports utilized during the pandemic can be leveraged to improve student outcomes in the future.