Budget & Finance

Inflation Is Putting the Squeeze on Schools. How Are They Coping?

By Mark Lieberman — July 22, 2022 3 min read
Cargo containers chart showing increasing prices of cargo transport
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The cost of virtually everything has spiked over the last year, and school districts deep in preparation for the 2022-23 school year already are feeling the pain.

Iowa’s largest school district, which starts its new school year on Aug. 24, is shelling out double last year’s cost for fuel. An Oregon district is putting off a paving project for a year after costs ballooned far beyond what the district’s voters had approved the district to spend. Many districts, within weeks of opening their doors for the school year, are raising fees for school meals to account for dramatic increases in the cost of bread, meat, cheese, and milk.

With fixed budgets complicated by local, state, and federal funding that rolls out on different schedules, school districts often struggle to adjust to unexpected costs. Some can shift funds around or tap into savings without much issue, but others find themselves experiencing a deficit, laying off staff, or canceling vital investments in teaching and learning to stay afloat.

“It’s really wearing on all of us,” said Michelle Hamilton, director of purchasing for the 58,000-student Mesa district in Arizona, which opens Aug. 4 for the new school year.

Just as the pandemic was beginning in early 2020, a case of paper cost the Mesa school district $23.29. This month, the district placed an order for hundreds of cases at $41 per case.

To add insult to injury, shipments of these unusually pricey goods are taking far longer than usual, as industries struggle to find enough workers to make and transport items.

The Mesa district used to get a truckload of paper one to two weeks after placing an order. Now, an order placed in April still hasn’t arrived nearly three months later.

Consumer prices jumped 9 percent between July 2021 and July 2022, according to estimates from the Bureau of Labor Statistics. The last time they increased that dramatically in one year was during the Reagan administration, four decades ago.

When costs spike, finance administrators cringe

Quirks in states’ approaches to funding schools squeeze districts’ ability to be nimble in the face of widespread inflation.

Employee groups nationwide—in Arkansas; Denver, Colo.; and Orange County, Fla., among many others—are seeking dramatic raises for their members so they can deal with the inflation they’re seeing at the pump and in stores. But in Oregon, the state sets school funding every two years and doesn’t budget for annual cost-of-living increases.

“We worked really hard to keep our staff employed and are keeping our fingers crossed we can hold it together this year,” said Cathy Hurowitz, superintendent of the 650-student Clatskanie district.

Construction is a major area where districts are trembling at the sight of dramatic cost increases. The Clatskanie district is putting off a parking lot paving project after its estimated cost doubled. More than a dozen school construction projects in Kentucky are in peril after costs jumped past what local taxes could cover.

A district administrator in North Carolina told New Hanover county commissioners he believed that updated estimates for a long-planned project to construct a new elementary school were inaccurate because they were so much higher than expected. But there was nothing amiss about the estimates: $44 million as opposed to the previous estimate of $27 million.

The list of items affected by inflation is sprawling. District leaders cite maintenance and custodial products, utilities like electricity and gas, trash and recycling pickups, insurance, and even Play-Doh.

These challenges come as schools face persistent pressure to make smart investments with the massive influx of COVID relief dollars the federal government sent their way in 2020 and 2021.

The deadline for spending the last of those funds is 2024, and many districts are still figuring out where those funds will make the biggest impact. With higher costs, some districts will have to trim their ambitions and shrink their priorities.

District leaders said they don’t expect these issues to subside anytime soon—and they’re taking a toll.

“My purchasing staff is totally burned out,” Hamilton said.

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