School districts are reluctant to use ARP funds for construction

Diving letter:

  • A School Superintendents Association (AASA) survey shows that school districts across the country do not plan to spend much of their American Rescue Plan funds on building renovations or building new facilities.
  • Nearly half of the districts reported spending no more than 10% of ARP funding on school improvements, while 16% of districts reported spending between a quarter and half of ARP funding on such improvements.
  • Around 25% of respondents said the 2024 spending deadline is an obstacle to using ARP funds for infrastructure and construction. Although the reasons varied slightly, the most common problem identified was finding contractors willing and able to take on the given projects persistent interruptions in the supply chain.

Dive Insight:

Congress allocated nearly $ 200 billion to state and local education agencies in 2020 and 2021 to reopen schools stricken by the COVID-19 ARP. The plan, which was enacted in March by President Joe Biden, directly addresses the recovery of learning in the context of a pandemic.

The breakdown among the survey participants resulted in the following:

  • 45% of districts plan to spend between 1% and 10% of ARP funds on improving school facilities.
  • 13% of the districts plan to do this Spend between 11% and 15% of ARP funds on improvements to school facilities.
  • 17% of the districts plan to do this Spend between 16% and 25% of ARP funds on improvements to school facilities.
  • 16% of the districts plan to do this Spend between 26% and 50% of ARP funds on improvements to school facilities.

But ARP funding alone is not enough to improve the country’s school infrastructure, said Sascha Pudelski, Head of the AASA advocacy group. Other solutions, such as Reopening and Rebuilding the American School Act, will be vital in supporting these projects.

The Reopen and Rebuild America’s Schools Act, introduced by Senator Jack Reed (DR.I.), promises to invest around $ 130 billion in public elementary and secondary schools.

“We urgently need Congress to pass the Rebuild America’s Schools Act, which would provide $ 100 billion in direct aid to new facility projects,” said Pudelski. “Although ARP funds can be used for school facilities, we invest around $ 80 billion annually behind what we should be in school facilities.

High prices, high demand

A number of AASA survey participants said that given inflated pricing due to demand, they were deterred from using ARP funding to invest in asset updates. Suburban counties were less likely than urban and rural counties to say that they would use ARP funds to renovate and build school facilities over the next three years.

“[It’s] unclear whether we will see an increase [in school construction projects]”, said Pudelski.” Problems in the supply chain, bottlenecks and inflationary prices make it difficult for the districts to invest in the construction with ARP funds.

In the survey, nearly half of boroughs and two-thirds of suburban counties said they would spend less than 10% of ARP funding on construction or other infrastructure improvements. According to the report, rural counties were much more likely than suburban and urban counties to spend more than 25% of their ARP funds on facilities improvement.

The rural counties’ ARP allocations were much lower than those of the urban counties, which may be one reason why they spend a larger proportion of this funding on construction and facility improvements

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