State likely to receive waiver on U.S. Department of Education COVID-19 fund rules – Parkersburg News

Del. Bill Anderson, R-Wood, reads through the House of Delegates version of the budget bill during a March 4 meeting of the House Finance Committee. (Photo Provided)

CHARLESTON West Virginia is likely to receive its second waiver for not meeting rules put in place by the U.S. Department of Education to keep state education spending at a certain level in exchange for use of more than $1.1 billion in COVID-19 funds, department officials said.

Officials with the U.S. Department of Education held a background briefing with reporters last week regarding the approximately $465 million the state might have to pay towards education expenses if the department does not grant West Virginias second and final waiver request from the departments maintenance of effort (MOE) requirements after the state received three tranches of Elementary And Secondary School Emergency Relief (ESSER) funds during the COVID-19 pandemic.

The officials, who declined to be identified, said that a decision on a waiver could be rendered before June, opening a possible window for a special session of the West Virginia Legislature to restore certain line items in the fiscal year 2025 general revenue budget passed on the final day of the 2024 session Saturday night.

I cant promise any specific timeline, but I personally will be distraught if it takes us until June, a department official said. Im hoping we can do something more quickly.

The state received more than $1.1 billion through the Coronavirus Aid Relief, and Economic Security (CARES) Act, the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, and the American Rescue Plan Act (ARPA) between 2020 and 2021. Those funds went to all 55 county school systems. Of that, more than $834 million has been spent as of the end of 2023.

But the final rules put in place for states to remain eligible to spend the CRRSA and ARPA funds with final guidance released in August 2022 required states to maintain their total education spending as a certain average compared to total budget expenditures. The percentage was based on an average of the three fiscal years (2017, 2018, and 2019) prior to the COVID-19 pandemic that began in 2020.

West Virginias baseline proportional educational spending level was 41.6%. But state support for K-12 education in fiscal year 2022 was $2 billion, or 37.5%, falling short of the required spending level. Gov. Jim Justice and state Department of Education officials under former state superintendent of schools Clayton Burch applied for a waiver on June 14, 2022.

State officials explained that the states student aid formula to counties was based on per-pupil enrollment, though it could show an increase in K-12 spending in prior fiscal years despite enrollment drops during the same period. State officials were also able to show increases in education spending through other means, including pay raises for teachers, increased funding for School Building Authority projects, deferred maintenance on existing schools, and the Governors Communities in Schools program.

As a result, the state was able to improve the percentage of education spending from 37.5% to 40.6%. The U.S. Department of Education granted the states fiscal year 2022 waiver on June 12, 2023. But despite an increase in state support for K-12 education to $2.1 billion, the states percentage of education spending compared to overall state spending was 34.7%, caused in part by maintaining an artificially flat general revenue budget and ending fiscal year 2023 with more than $1.8 billion in surplus tax collections.

West Virginia applied once again to the U.S. Department of Education for a second waiver for fiscal year 2023 on Feb. 21. According to department officials, five states have also applied for waivers for fiscal year 2023, including West Virginia. States also have until Friday, March 15, to submit additional data to the department which will be used to determine whether to grant a waiver.

West Virginia is not alone. There are other states, a department official said. We dont have final data from those states because it isnt due until March 15. So, kudos to West Virginia for acting on this before the March 15 deadline.

West Virginias monetary gap to meet the 41.6% baseline proportional educational spending level is $465 million according to state officials, though the U.S. Department of Education was unable to confirm the specific dollar amount. The Legislature just passed Senate Bill 200, the budget bill for fiscal year 2025 beginning in July, which also includes funding for teacher pay raises and $150 million for the School Building Authority.

State officials also plan to use ongoing base funding increases, such funding for the Third Grade Success Act that went into effect this school year, in order to close the education funding gap. The Third Grade Success Act included ongoing funding to place aids in early elementary school classrooms.

While there are several mechanisms the U.S. Department of Education can consider against states if waivers are not granted including clawing back the federal COVID-19 funds officials said to date that it was never not granted a waiver.

In some respects, West Virginia is ahead of the game compared to other states because they have worked to update their data and their waiver prior to the March 15th deadline, which was sooner than some other states, one department official said.

SB 200, the budget bill, set the general revenue budget beginning Monday, July 1, at $4.996 billion. However, the section known as the back of the budget which lists budget priorities to be funded from available surplus tax revenue at the end of the current fiscal year on Sunday, June 30 was left skinny in case the waiver is not granted.

The state is expected to end this fiscal year with nearly $800 million above revenue estimates. Once the waiver is granted, lawmakers hope to return to Charleston for a special session as soon as May to restore reduced appropriations in the fiscal year 2025 and to add items to the back of the budget.

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State likely to receive waiver on U.S. Department of Education COVID-19 fund rules - Parkersburg News