School districts are laying off hundreds of staff members under the combined weight of enrollment loss and the end of ESSER funding. Here’s how one district is carrying out the steep cuts predicted by some education experts.
California’s Santa Ana Unified School District on Monday initiated the layoffs of more than 260 employees, the Orange County Register reports. Santa Ana USD has lost more than 10,000 students since the 2018-29 school year while its budget deficit has grown to around $154 million, according to the district’s website.
The last time the district issued layoff notices was in 2017.
The impact of ESSER
Santa Ana USD spokesperson Fermin Leal told the Orange County Register that the district used ESSER dollars to hire nearly 400 new employees, prioritizing counselors and teachers. As a result, most of the layoffs include folks in those groups, which are expected to save the district about $30 million.
Other ways the district is considering cutting costs, according to a March 11 board meeting, include:
- Early retirement incentives (expected to save 16% of the deficit)
- Revenue enhancement through attendance
- Cuts in supplies (accounts for 27% of reductions)
- Reducing capital expenditures (16% reduction from construction and technology purchases)
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It’s time to make difficult decisions
While difficult, now is the time for superintendents to make tough decisions, a sentiment regularly echoed by Marguerite Roza, director of Georgetown University’s Edunomics Lab, who often speaks with District Administration about trends and forecasts associated with education finance.
Last month, Roza told District Administration that labor costs make up the majority of a district’s budget, especially since districts like the Santa Ana Unified School District used pandemic relief money to hire additional staff. Unsurprisingly, many schools have more staff and fewer students than ever, resulting in a massive gap in labor costs versus funding determined by student enrollment.
In a recent webinar hosted by the Edunomics Lab, Roza outlined the most impactful financial risks school districts will likely experience during the first year of President Donald Trump’s second term. The risks include layoffs, a potential recession and ongoing battles related to DEI and transgender services.
Below is a chart recapping Roza’s predictions from the webinar:
| Title I | Low (no) risk |
| IDEA | Low (no) risk |
| Unspent ESSER | High risk for a few districts/SEAs with remaining ESSER |
| Medicaid | Partial risk. Medicaid is <1% of budgets. Can be trimmed in reconciliation. |
| Battles over DEI, transgender services | Some risk for locales that violate Title VI or Title IX |
| A recession triggers a reduction in state funds | ~50% chance (major effect since it impacts the largest funding source) |
| Decline in migrant arrivals reduces revenue | High risk for locales w/ migrants (proportional to prior migrant arrival rates) |
| A reduction in all types of funds with a drop in enrollments; school closures due to enrollment declines | Steady risk over the next decade, proportional to enrollment losses |
| Layoffs, reduction in force at the school/district level | High risk |
| Special ed costs for cuts elsewhere in budget; Test score declines | Depends on the district; Depends on the district and state |
