How 2021 State Legislatures Could Change the Future of Education

Lawmakers in 2021 sessions are contending with myriad education-related issues fostered by the pandemic through the same all-encompassing “COVID-19 lens” dominating deliberations in nearly every other realm of state concern. As of early March, more than 226 education-related bills had been adopted across 17 state legislatures with thousands more in committee. During 2020 sessions, with all 50 states under emergency executive authority, state legislatures passed more than 175 bills directly related to COVID-19’s impacts on students and school funding.

In 2021, the trends are in the issues: While state lawmakers are awash in a raft of pandemic-induced budget pressures, they are also weighing significant policy changes to remedy inequities exposed during the emergency, respond to emergent needs, and capitalize on the potential opportunities that a reshaped landscape offers to “reimagine education.”

K-12 Priorities

1. Budgets

Overall, federal, state, and local governments collectively spend about $720 billion annually to fund K-12 schools and higher education in the United States, with state and local governments contributing about $670 billion of that. Education spending consumes more than 20 percent of state expenditures, second only to healthcare.

Facing projected revenue declines averaging between 5 and 10 percent over this and the next fiscal year (which begins July 1 in 46 states), economists this fall were projecting some legislatures would need to slash 2021 education budgets by as much as 35 percent.

But lessons from the 2008-09 Great Recession paid dividends for most states. When state education funding declined by an average 8 percent in ensuing years, lawmakers in every legislature boosted reserve and budget equalization allocations to varying degrees. 

As a result, states began Fiscal Year 2020 with a collective $74.9 billion in reserves. When the pandemic emerged eight months later, lawmakers in many states used those accrued funds to shore up pandemic-induced shortfalls, including in education budgets. 

Plugs of federal pandemic assistance allowed state lawmakers to maximize the efficacy of their reserve/equalization funds in sustaining education budgets relatively intact this, next, and in future fiscal years. In 2020, Congress earmarked nearly $113 billion in education pandemic assistance to states through March’s $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act and December’s $900 billion COVID-19 Relief Package. Thus far in 2021, the $1.9 trillion federal pandemic relief package approved by Congress in mid-March earmarks about $170 billion in school reopening assistance for states, including $54.3 billion for K-12 schools, largely through Title I funding.

Therefore, state education budgets are not being dramatically cut by state legislatures through the mix of reserve and federal emergency funding to mitigate COVID-19-induced budget shortfalls. 

State lawmakers will mostly apply the federal funding to technology upgrades and school reopening. The National School Superintendents Association estimates it will cost the average school district each about $1.8 million to open schools and keep them open under federal Centers for Disease Control & Prevention (CDC) guidelines.

Georgia, for instance, is using the federal assistance to restore 60 percent of education spending cuts initiated last June, and Oklahoma has kept reductions to education spending at 2.5 percent while other state agencies received an across-the-board 4-percent trim. Under Arizona Gov. Doug Ducey’s budget request, the state’s education funding formula will produce $389 million less in revenues for schools but federal coronavirus relief money will sustain funding at previous years’ levels.

Among states cutting education budgets in 2021 is Wyoming, including a proposed $300 million slash in K-12 funding. Nevada lawmakers plan to decrease K-12 funding by $156 million and in Utah, legislators are eyeing a $22 million decrease, down from an original $100 million shortfall.

More than a dozen states are expected to pass budgets that increase education funding next year, again augmenting allocations with reserve and federal money. In addition to the $2 billion boost to prepare schools to reopen classrooms by April 1, lawmakers in California are considering a proposed $85.8 billion two-year budget for K-12 schools and community colleges, a $15 billion increase from this fiscal year. New York, South Carolina, and Maryland are among other states proposing to increase education funding. Maryland’s Gov. Larry Hogan proposes increasing state spending by $213 million to hold school districts “harmless” for revenue losses tied to decreased enrollment.

While in the macro, education funding appears stable, the details — and the pain — are in the micro. Many legislatures are re-assessing how their base per-pupil funding formulas work during 2021 sessions, but none are proposing cutting per-student annual outlays. 

However, “categorical funding” — money for programs such as special education, class-size reduction, and transportation — is where lawmakers are drawing back the purse strings and looking to throw unattached cash into general funds. Of the $156 million in proposed cuts in Nevada’s education budget, for instance, $70 million are from “categorical funds.” 

The stress on schools — not to mention teachers, students, and families — from the pandemic is also stirring taxpayers to examine school funding issues. Ballot measures aimed at providing additional school funding are being considered in Arizona, Colorado, North Carolina, and California with many more petition initiatives expected to emerge as campaign issues before the November 2022 elections.

2. Achievement Gap

Enrollment declines averaging between 2 and 4 percent nationwide were reported by 83 percent of the nation’s school districts in March, according to the Association of School Business Officials (ASBO) International. An estimated 3 million K-12 students may not have received any formal education — virtual or in-person — since last March. 

As a result, school districts nationwide reported more failing grades for the first semester of the 2020-21 school year than normal. Standardized assessments are also revealing disruptions. For instance, the Northwest Evaluation Association (NWEA) Measure of Academic Progress (MAP) Growth assessments indicate dips in math performance in Washington state, with students in grades 3-8 scoring between 5 and 10 percent lower than average compared to 2019 tests. 

The pandemic’s toll on classroom instruction is widening achievement gaps for vulnerable students, including those who are English learners, from low-income families, students of color, and students with disabilities. Mitigating the pandemic’s impact on “missing” and underachieving learners — from preschoolers to grad students — is chum for lawmakers casting lines for solutions in addressing achievement gaps ingrained for decades but aggravated over the last year.

Lawmakers in 2021 legislative sessions are pondering proposals from educators on how to make up for that lost time. While there is a bevy of bills nationwide addressing proposed remedial and tutorial academic programs, investments in technology to put the tools of learning in students’ hands are among the most significant advances during the pandemic.

When all 50 states shut down schools last spring and went to full online instruction, as many as 16 million students, or 30 percent of the nation’s K-12 student population, lacked adequate internet access and the devices needed for remote learning, exacerbating the proverbial “digital divide.”

• The Virginia General Assembly has passed 2021 legislation to expand broadband internet access for about 400,000 students including about 140,000 without any internet at all. 
• The Alabama Legislature has adopted a bill creating the state’s Digital Expansion Authority, which will develop a statewide connectivity plan to expand high-speed internet across the state, especially for school districts in rural areas.
• A 2021 Colorado bill proposes a reimbursement program for certain households with students enrolled in online learning of up to $600 per year for broadband service.
• Maine, California, Iowa, North Carolina, and New Mexico lawmakers are among those pondering broadband access bills for students in 2021 sessions.

Many legislatures will use federal pandemic assistance to invest in technologies and connectivity, including providing students with computers. Alabama, Mississippi, and Tennessee spent millions in federal assistance on student technology, IT sustainability, and connectivity with lawmakers in most states likely to do so to varying degrees again in 2021.

3. Attendance Policies

States use prior year’s attendance counts to calculate the funding schools receive through per-student daily attendance or semester enrollment allocations. With an estimated 3 million students “missing” since the pandemic closed schools last spring, most districts across the country will receive less revenue next fiscal year if state lawmakers don’t amend standard attendance-based funding models for FY22 education budgets.

The sudden deployment of remote and hybrid instruction models for more than 50 million K-12 students in 2020 has also raised questions in 2021 state legislative sessions about the continued viability of attendance-based funding formulas as now defined.

The financial repercussions of attendance and enrollment declines on school districts this coming fiscal year and in ensuing years have prompted lawmakers in some states to evaluate how attendance is defined amid the pandemic-induced expansion of delivery models, extended learning opportunities, and virtual learning environments. 

Seven states calculate per-student finding through a straight Average Daily Attendance (ADA) metric: California, Idaho, Kentucky, Mississippi, Missouri, New York, and Texas. 

• A Mississippi bill to transition from ADA to enrollment counts has already died in committee this season despite state Education Superintendent Carey Wright reiterating her desire for lawmakers to adopt such a bill in 2021. 
• The Idaho Board of Education approved a rule allowing schools to use a full-time enrollment rather than ADA this and next fiscal year. A bill has not surfaced in the legislature to make the change permanent.
• Missouri lawmakers are pondering a bill to transition from ADA to weighted enrollment attendance tallies while California, Texas and Kentucky legislators will evaluate 2021 bills making changes to ADA but not doing away with the system.

Four states — Alabama, Alaska, New Mexico, and Wyoming — calculate base student allocations by using a “census” formula while the remaining 32 use a “weighted” ADA and semester enrollment counts to do so.

Instead of addressing funding formulas to adjust to remote or hybrid attendance, in the short term, some states are holding districts “harmless” for attendance declines while requesting studies on possible long-term revisions:

• California, Mississippi, Michigan, Delaware, Pennsylvania, South Carolina, and North Carolina are among states where lawmakers have agreed to fund districts through next year at pre-pandemic attendance-based levels. Maryland Gov. Larry Hogan has done so via executive order.
• Florida is among states where lawmakers are warning districts they plan to restore the state’s base per-pupil allocations in the upcoming budget, meaning schools can anticipate less revenue. 
• In Texas, no bill had surfaced by early March to extend districts’ “hold harmless’ status beyond this school year.

But with different delivery models, extended learning opportunities, and virtual learning environments emerging, state lawmakers across the country are also considering new metrics for attendance and how attendance should factor in the future.

Attendance-based funding trends include “competency-based,” “proficiency-based” and “mastery” metrics that have been adopted in place of ADA “seat time” to varying degrees for funding some education programs since 2013 in at least eight states — New Hampshire, Vermont, Ohio, Colorado, Rhode Island, South Carolina, Idaho, and Michigan.

In 2021 sessions, Maine educators have called for lawmakers to adopt a Proficiency-Based Education (PBE) model while a host of bills have been filed in legislatures to count remote work the same as classwork for attendance purposes, including in New York and New Jersey where lawmakers adopted a bill last year to permit virtual or remote instruction to meet minimum 180-day school year requirement, but it was vetoed by Gov. Phil Murphy.

4. Alternative School Models

After the vaccine is distributed and the pandemic quelled, it is unlikely that the traditional public school model will survive intact for many students in most states. Before last year, nearly a third of all American K-12 students attended a school of choice, including district-operated magnet schools (7 percent), district vocational and exam schools (6 percent), charter schools (6 percent), private schools (8 percent, with 1 percent using taxpayer-funded school vouchers or tax-credit scholarships), and 3 percent were home-schooled.

Participation in these alternate schooling models is expected to increase dramatically in coming years, none more so than school choice programs that already receive public money in 29 states, the District of Columbia, and Puerto Rico, according to EdChoice.

Iowa is expected to pass a major school choice expansion backed by Gov. Kim Reynolds that will grant state scholarships to public school students who want to attend private institutions. Similar expansions are proposed in Colorado, Florida, Georgia, Indiana, New Hampshire, Arizona, and Kentucky, among other states. Lawmakers in Missouri and Washington among those pondering 2021 bills to create tax-funded voucher programs. 

Florida has the nation’s most developed school choice. Sunshine State lawmakers are expected to pass SB 48, which would merge five voucher plans that pay for 160,000 K-12 students to attend more than 1,800 private schools, into two programs to consolidate and dramatically expand access to families in some cases that earn 325 percent of the federal poverty level — $80,000 for a family of four.

Florida’s SB 48 also creates education savings accounts (ESAs) averaging $7,400 per student for participating families to not only pay private school tuitions but also purchase electronic devices, curriculum, part-time tutoring programs, educational supplies, equipment, and therapies that insurance programs do not cover. 

One of five states that have approved ESAs, Florida now only allows them only for students with disabilities. Only Arizona and Nevada entered 2021 with ESAs available to most students. Bills seeking to establish ESAs have also been filed in Missouri, New Hampshire, and Georgia, among other states.

Charter schools are being addressed in many legislatures during 2021 sessions as well, although momentum for this school choice program appears to be slackening. 

• The Republican-dominated House of Delegates in February overwhelmingly passed a bill expanding West Virginia’s nascent charter school system, which lawmakers created two years ago. The bill would increase the number of charter schools that could be approved in a three-year period from three to 10. 
• A Missouri bill would expand charter schools by allowing any city with more than 30,000 people to have them. Only St. Louis- and Kansas City-area districts now qualify.
• Pennsylvania lawmakers are looking at a charter school reform bill backed by Democratic Gov. Tom Wolfe to create charter school performance standards and limit cyber school enrollment until poor-performing schools improve their results. A similar bill has been filed in Oklahoma.

5. Assessments/Testing

States are not pushing for a wholesale shift away from standardized testing but the pandemic has prompted some educators and lawmakers to “rethink” the value of assessment data as a reliable, valid measure of student achievement. 

After waiving 2019-20 school year assessments required by the Every Student Succeeds Act (ESSA), the Biden administration on Feb. 22 ordered that states must administer federally required standardized end-of-year tests in March and April, but schools won’t be held accountable for the results.

The U.S. Department of Education’s guidance for the 2020-21 school year does allows states to offer shorter, remote, or delayed versions of the exams but several states have submitted testing wavers.

Georgia Gov. Brian Kemp and state School Superintendent Richard Woods in February were denied a requested suspension of standardized testing by the U.S. Department of Education. The decision “shows the continued disconnect between Washington, D.C., and the realities of the classroom,” Woods said.

Woods has joined New York City School Chancellor Richard Carranza and others in urging parents to consider opting out of any standardized testing of their students this school year.

The Network for Public Education, which opposes standardized testing, is circulating a petition in districts nationwide calling for testing to be cancelled and the California Teachers Association is calling on state officials to seek a testing waiver, and on state lawmakers to review the states standardized assessment regimes. Several bills have emerged in Sacramento.

In Colorado on March 4, lawmakers introduced a bill that would lessen ESSA testing for grades 3-8 by instead following Colorado Measures of Academic Success (CMAS) standards. If passed, Colorado would still need a waiver from federal education officials to be able to forgo the tests, because the feds are keen on assessing learning loss caused by the COVID-19 pandemic. 

The legislation’s prospects of adoption are diminished by advisory opinion issued by state attorneys warning the federal guidance “plainly suggests that it will not entertain such a waiver request.” 

A bill similar to Colorado’s measure has been introduced in Pennsylvania. In Ohio, lawmakers are considering bills seeking waiver for federal tests and to suspend Ohio-only end-of-course exams for graduation. 

The District of Columbia, Illinois, Michigan, New York, New Jersey and Washington are among states that have submitted testing waivers for the school year with lawmakers. Washington educators want to test a smaller sample of students, about 30,000 instead of the 700,000 normally slated for testing.

Meanwhile, Florida, Indiana, Tennessee and Texas are among states where lawmakers determined the state would continue standard assessments regardless of federal guidance.

6. Grading

The sudden thrust into mass remote learning has some educators questioning the A-B-Cs of grading protocols in fairly measuring mastery of curriculum.

Among states standard grading approaches have been tweaked is Georgia where the state board of education has reduced the percentage weight in end-of-course assessments in a student’s final grade. 

New York City Public Schools is allowing schools to set their own grading scales and provides flexibilities for families in how final grades are reflected on a student’s academic record. 

In Southern California, the San Diego Unified School District now requires teachers to assign letter grades for students based on “mastery of content” and allow for “reflection, revision and reassessment” to reach mastery levels. 

Higher Education Priorities

Higher education was hammered by the pandemic with overall postsecondary enrollment declining by 2.5 percent in fall 2020 and freshman class sizes significantly smaller, especially in community colleges where first-time student enrollment dropped 21 percent, according to the National Student Clearinghouse. 

Strapped higher education budgets are among myriad challenges facing lawmakers in 2021 and among issues confounding state universities and colleges in supporting current students pursuing post-secondary degrees while attracting new ones. 

More than 1,450 bills ranging across 40 higher education funding categories had been proposed in 2021 state legislatures by March 5 with budgets, affordability and access to aid among issues drawing the most attention in 2021 sessions. 

Budgets

Many states slashed higher education funding last year as the pandemic gutted revenues and educators were braced for further cuts in the 2022 fiscal year.

Nevertheless, at least 19 governors specifically called for funding increases in higher education in their state-of-the-state addresses in January and lawmakers in many states, including Iowa, Indiana and Idaho, are looking to restore cuts from this year and increase allocations next year.

Kentucky Gov. Andy Beshear has called for an additional $17 million for postsecondary education. Tennessee Gov. Bill Lee’s budget request includes $900 million for capital improvements to higher education. California Gov. Gavin Newsom proposed an $18.6 billion higher education budget is a 3-percent increase from this year’s plan.

Lawmakers in Georgia, Hawaii, Nevada and North Dakota are among those who are deliberating budgets that call for cuts in higher education funding.

Governors in Georgia, Hawaii, Nevada and North Dakota have proposed decreases in higher education budgets. Georgia is looking at a $280 million cut, Nevada $80 million and Hawaii $78 million over two years. North Dakota may trim higher education funding by up to 7.5 percent in next year’s budget.

State lawmakers and officials are expected to move quickly on higher education budget questions with the adoption of the $1.9 trillion federal pandemic relief package approved by Congress in mid-March, which earmarks about $22.7 billion in assistance for state universities and colleges.

Affordability

The pandemic has spurred states to more aggressively explore strategies to increase affordability and boost financial aid access for students which has been a pressing issue for more than a generation.

At least five states are considering expanding existing “promise scholarship” programs — which cover either partial or full tuition costs for students — or creating news ones 

Lawmakers in seven states have introduced legislation subsidizing the cost of course materials such as textbooks.

A New Jersey bill calls on the state’s Secretary of Higher Education to study prevalence, cost, and quality of certain on-line courses compared to traditional classroom courses offered by institutions of higher education.

In addition, state legislatures are reviewing legislation to modify admissions practices, including Colorado, Illinois, Maryland and New York. Connecticut and Georgia lawmakers are considering bills to prioritize admission for in-state students.

Also, lawmakers in at least three states — California, Massachusetts and New Jersey — are considering bills that would rebate campus fees and even partial tuitions for students whose studies were disrupted because of the pandemic.

Access to Aid

Only 61.2 percent of 2020 high school seniors completed the Free Application for Federal Student Aid (FAFSA), which is the most critical step in obtaining federal and state financial aid to attend college. In five states, fewer than 50 percent took the FAFSA.

FAFSA completion rates among current high school students have decreased even more. As of January, the number of applications was down 10 percent from 2020, with about 144,000 fewer high school seniors applying, according to the National College Attainment Network.

Currently, only Louisiana and Illinois require FAFSA completion to graduate from high school. In 2020, 13 states introduced similar legislation but none were enacted into law. Nebraska lawmakers passed a FAFSA requirement, but it was vetoed.

By March 5, lawmakers in Texas and at least another 10 states, including California, Florida, Hawaii, Indiana, Kentucky, Maryland, Nebraska, Rhode Island, South Carolina, and New Jersey, were considering bills to incorporate FAFSA into senior year curriculum and, in at least six cases, make it mandatory to graduate from high school.

A Colorado bill would ditch FAFSA altogether by removing a requirement for public colleges and universities to request standardized test scores from all applicants. 

Among other higher education-related issues on lawmakers’ plates is campus safety — 15 bills in eight states seek to allow licensed gun owners to carry concealed weapons on campus; free speech — measures calling for “intellectual freedom” primarily from conservatives have been filed in at least 12 states; and 36 “pay to play” proposals to compensate student-athletes, or allow them to financially benefit in some way from the use of their images have been filed in 36 states.

Stay on Top of the Latest Education Policy Developments

For those tasked with monitoring the risk or opportunities associated with the changing education policy landscape, staying on top of rapidly developing issues at the local, state, federal, and global levels is crucial for building an effective strategy.

The good news is FiscalNote has you covered with the most comprehensive suite of products to help you manage policy developments as they erupt, engage with key stakeholders, and tackle the top issues on your agenda.