National · Policy & Funding

Districts in seven states cut staff, services as ESSER funds expire and costs rise

Cincinnati, Fresno, LAUSD and others adopt furloughs, layoffs, and attrition strategies to close budget gaps driven by expiring federal aid, falling enrollment, and rising special education and insurance costs.

School Decision NewsroomAugust 17, 2026

Original Research by SchoolDecision.com

One district's mandated categorical spending on busing and special education facility costs rose from $5 million to $7.5 million, with claims increasing annually by 13 percent since COVID, compared to about 2 percent annual increases pre-COVID, according to school administrators. [11]

School districts in at least seven states are cutting staff and services in fall 2026 as the expiration of federal pandemic relief funds, declining enrollment, and rising costs for special education, insurance, and operations converge. The districts are spread across Ohio, California, Michigan, Mississippi, Pennsylvania, Illinois, and Arizona, and their responses range from across-the-board furloughs to mass layoffs to attrition-only reductions.

Cuts vary by district, from furloughs to layoffs to attrition

111Positions cut by Cincinnati Public Schools, including 81 central office, 12 social workers, 10 assistant principals, and 8 counselors, as part of closing a $58 million budget gap. The district also implemented five mandatory furlough days for all employees. [1]

$88 millionProjected deficit for Fresno Unified School District, a 49% increase from February 2026. The district eliminated 383.8 full-time equivalent positions, including 196 classified employees and 78 certificated positions, and approved early retirement for 573 employees. [3]

$231 millionProjected cash shortfall for Los Angeles Unified School District by November 2027, according to the Los Angeles County Office of Education. The district faces more than 6,000 job reductions and seven unpaid furlough days per worker. A county 'Lack of Going Concern' finding gives LAUSD 45 days to revise its fiscal plan. [6]

Lansing School District in Michigan cut about 50 positions to address a structural deficit. Vicksburg Warren School District in Mississippi cut 33 positions, mostly through attrition, and reduced all department budgets by 3 percent. Lehighton Area School District in Pennsylvania faces a $3.4 million deficit driven by special education costs that more than doubled in five years. In Illinois, Freeport School District 145 eliminated dozens of staff positions, Rockford Public Schools cut over 100 positions, and Harlem School District is closing two schools. Tucson Unified School District in Arizona directed staff to prepare contingency plans for potential federal funding reductions, and Gwinnett County district in Georgia identified $18 million in administrative cuts.

How the fiscal cliff was anticipated

Education finance researchers had warned of the coming fiscal cliff as early as 2024. Marguerite Roza of Georgetown University's Edunomics Lab projected the average district would need to cut costs by $1,200 per student in 2024-25 as ESSER funds expired. Roza also noted that many districts used remaining ESSER funds to cushion budgets, delaying the full impact until later years. She predicted that non-teaching professionals such as social workers, counselors, and reading coaches would be most vulnerable to cuts.

$1,200Average cost per student that Roza projected districts would need to cut in 2024-25 due to ESSER expiration. [13]

What the research shows

Roza's analysis found that as of January 2024, 13 states still had 50 percent or more of their K-12 district-level ARP funds left to spend, and only about three-quarters of total ESSER funds had been spent. She predicted tight budgets would persist into 2025-26 but may ease for districts that spent down funds earlier.

The Illinois Association of School Administrators said the combination of ESSER loss, rising mandated costs, and federal funding uncertainty is creating severe difficulties for districts across the income spectrum. The U.S. Department of Education delivered preliminary allocation tables late for fiscal 2026, and Title I and IDEA formula grants must now be obligated in the same fiscal year they are received, a change from prior practice. Multiple districts are budgeting conservatively as a result.

Analysis

By the School Decision Newsroom, written after the reporting above was filed.

The pandemic aid was working. The cuts land on what worked.

A 2024 study by researchers at Harvard and Stanford found that each $1,000 in ESSER spending per student produced measurable gains in math and reading, with the largest effects in districts that spent on instructional interventions like tutoring and coaching. The aid narrowed achievement gaps that had widened during the pandemic. The positions now being eliminated are the ones that drove those gains: Cincinnati cut 12 social workers and 8 counselors, and Roza predicted non-teaching professionals would be most vulnerable. The fiscal cliff is not correcting a failed experiment. It is defunding a successful one.

[15][16][1][13]

LAUSD has until mid-August to satisfy the county, or a fiscal adviser takes veto power

The county's Lack of Going Concern finding was dated July 2, starting a 45-day clock that runs out around August 16. The LAUSD board meets August 11 in closed session to begin its fiscal recovery plan. If the county is not satisfied with the revision, the next step is a fiscal adviser with veto power over board spending decisions. The step beyond that is a full state takeover. The last California district to receive one was Inglewood, which got an emergency state loan in 2012.

[17][7]

Special education costs are climbing permanently, not peaking

Lehighton Area's special education costs more than doubled in five years. One Illinois district's mandated special education transportation spending rose from $5 million to $7.5 million, with annual increases jumping from 2 percent before COVID to 13 percent since. These figures describe a cost base that keeps compounding, not a one-time spike. Districts cutting positions now to close this year's gap will face the same pressure next year, because the underlying driver is a permanent escalation in legally required services, not the expiration of a temporary federal subsidy.

[10][11]

Sources

Cincinnati Public Schools. CPS Board Places Five-Year, 7-Mill Property-Tax Levy View
WKRC Local 12. 'We need $58M': Local school district to furlough all staff amid budget cuts View
Fresno Bee. Board approves $1.66B Fresno Unified budget, 384 jobs cut View
GV Wire. Fresno Unified Will Deliver Final Layoff Notices to Employees View
EdSource. Financial deficit for Fresno Unified grows to $88M for next school year View
Los Angeles Times. LAUSD faces takeover by county unless it makes steep budget cuts View
LAist. LAUSD could face layoffs, furloughs and school consolidation amid projected $231M shortfall View
Lansing State Journal. Lansing School District cuts about 50 jobs as pandemic funding ends View
Vicksburg Post. VWSD cuts $4.1 million from projected budget deficit View
Times News Online. Loss of COVID funds hurts LASD View
Northern Public Radio (WNIJ). Why several northern Illinois schools are cutting staff and reckoning with multimillion-dollar budget deficits View
Education Week. Districts Brace for the Unexpected as Federal Funding Troubles Linger View
K-12 Dive. How will ESSER fiscal cliffs drive school district budget cuts? View
Education Week. School Districts Prepare to Go Without Some Federal Funds Next Year View
Harvard CEPR. New Research Finds Federal Pandemic Relief Aided Academic Recovery During 2022-23 School Year, Especially Among Low-Income Districts View
NBER. Federal Pandemic Relief and Academic Recovery (Working Paper 32897) View
Los Angeles Times. LAUSD faces 'severe' signs of insolvency; county warns it could intervene View