Commissioner Mike Morath announced the decisions and per-district funding allocations for districts Thursday afternoon. There wasn't any press release from state leaders on this one.
The per-district funding under ESSER II will first be used as a method of finance to pay for the funding hold harmless offered to districts in the 2020-21 school year. That means that similar to the CARES funding allocation that districts “received” along with either a decrease in state aid or increase in recapture in order to supplant the funding in 2019-20, a similar mechanism will occur again in an amount equal to the hold harmless funding each district received in 2020-21.
For the 2020-2021 school year, LEAs will be eligible to receive hold harmless adjustments (increases in ADA/FTEs) for attendance figures as previously announced. For each LEA that actually receives a hold harmless ADA adjustment, TEA will fund a portion of that hold harmless adjustment with federal funds in a manner similar to how the 2019-2020 hold harmless was funded using CARES funds. The mechanics for the portion funded using ESSER II funds will also be an ADA reduction. For 2020-2021, TEA will reduce total Refined ADA in an amount necessary to ensure each LEA receives total state and ESSER II funding equal to the amount that would have been available through the FSP while receiving the benefit of the hold harmless provided by the State.
Here is an explanation for three different scenarios that could apply to districts (choose the one that applies to your district):
District received hold harmless funding in 2020-21 AND ESSER II:
For districts that received hold harmless funding in 2020-21, the State will reduce your hold harmless ADA as necessary to supplant your ESSER II funding. For recapture districts, this could mean a large increase in recapture and could therefore require a budget amendment. Some districts will have plenty of ESSER II funding remaining, even after it is used to cover the cost of the hold harmless. For other districts, the amount of ESSER II funding could be completely consumed by the cost of the hold harmless and not leave any additional ESSER II dollars for district use. If the district’s ESSER II allocation is not sufficient to cover the cost of the hold harmless for the district, then the State will cover the remaining cost.
Final numbers of the ADA reduction per district will not be known until settle-up. TEA is going to update the template to help districts estimate the amount this summer.
District didn’t require hold harmless funding in 2020-21
If your district had ADA that was higher than the floor set for the hold harmless, then you didn’t require hold harmless funding to keep you whole in 2020-21. That means you will receive your whole ESSER II allocation and you won’t have to worry about the state supplanting funding, reducing your ADA, or increasing your recapture.
District received hold harmless but NOT ESSER II (or not enough ESSER II)
If your district did not receive ESSER II funding, or if your ESSER II funding allocation is not high enough to cover the cost of your funding hold harmless in 2020-21, then the state will cover the cost of the hold harmless.
