Budget & Tax, Education

Watchdog report: No shortage of funds in Oklahoma schools

June 26, 2024

Ray Carter

For years, the academic outcomes produced by Oklahoma schools have been among the worst in the nation. And for years, school officials have offered one chief excuse for those poor outcomes, blaming funding levels for academic woes.

But a new report by a state fiscal watchdog agency shows that excuse no longer holds water. In reality, the coffers of Oklahoma schools have been filled to bursting in recent years due in part to an enormous infusion of federal COVID funds.

In its most recent report, presented to state lawmakers this month, officials with the Legislative Office of Fiscal Transparency (LOFT) reviewed federal funds in Oklahoma’s K-12 school system.

“In total, Oklahoma received $2.43 billion in COVID-relief funds,” Jeromy Knapp, financial analyst/economist for LOFT, told lawmakers. “This inflow of funds caused Oklahoma’s education agencies to have unprecedented funding.”

He noted that in the 2021 state budget year, federal COVID dollars increased funding at Oklahoma schools by 57 percent “on top of the operating revenue for FY21.”

Federal COVID funds were provided to Oklahoma schools in three major installments.

In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which established the Elementary and Secondary School Emergency Relief Fund (CARES-ESSER I). Oklahoma received $161 million in that round.

In December 2020, Congress passed the Coronavirus Response and Relief Supplemental Appropriations Act, which created the second round of ESSER funds known as ESSER II to be used beginning in January 2021. Oklahoma received $665 million in that round.

In March 2021, Congress passed the American Rescue Plan, which created the third and final round of support for schools known as ESSER III. Oklahoma received $1.5 billion from that law, which was a priority of the Biden administration.

An additional $112 million was provided to Oklahoma schools to benefit students such as those who are homeless, those requiring early intervention, and students with disabilities.

Combined, those programs provided Oklahoma schools with a federal windfall of $2.43 billion on top of existing local, state, and federal funding. As of May 2024, Oklahoma schools have spent $2.06 billion of that total, leaving $368.6 million that must be spent in the next year.

Of the $2.06 billion in federal COVID funding that has been spent, the LOFT report found “a majority of the funds were expended to support instruction in the districts, closely followed by funding district operations.”

The massive increase in federal funding in Oklahoma schools coincided with a massive increase in state appropriations to schools.

From 1993 to 2018, state funding for Oklahoma schools increased by $1.35 billion. But from 2019 to 2024, state spending in Oklahoma schools increased by $1.37 billion, meaning state funding surged more in a five-year period than it had in the prior quarter-century.

So far, there is little indication that the massive spending binge of the last few years has generated any notable improvement in Oklahoma’s K-12 system. Testing continues to indicate that Oklahoma students, in general, are either performing at a lower academic level than their peers prior to COVID and the funding increase or are at roughly the same level.

The LOFT report notes lawmakers may not know what, if any, benefit has been generated by the massive increase in school funding for several more years.

“It may only be after all COVID funds exit the public education system that policymakers will be able to assess the impact of those funds and any outstanding needs,” the LOFT report stated.