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Legislative Update

Legislative Update-Part One: DPI submits new proposed plan for distribution of remaining ESSER III funds.

by | Jan 24, 2022 | Federal Issue, Legislative Update Blog, State Issue | 0 comments

(Note: This is the first of three blog posts detailing information that was provided by the WASB Government Relations team to in-person attendees at the Legislative Update presentation during the State Education Convention last Friday.)

During our WASB Legislative Update webinar on January 12, the GR team said we hoped to be able to provide a progress report on negotiations between the DPI and the members of the Joint Finance Committee (JFC) aimed at reconciling differences over the distribution of a portion of the federal COVID relief funds for public schools (“ESSER III” funds) provided to the state under the American Rescue Plan Act (ARPA).

We have some good news report.  Last week, the DPI submitted a new plan to the Joint Finance Committee (JFC) for the distribution of about $114 million in federal (ESSER III) COVID relief funds that have been held up for many months.  The DPI’s latest proposal has been submitted to the Joint Finance Committee for and has been made public, which suggests that an agreement may be close. The JFC has 14 calendar days to either meet to approve or modify and approve the plan, or not meet, in which case the State Superintendent would implement the plan as submitted. The Committee has until Wednesday, February 2, 2022 to meet and act on this plan.

If approved by the JFC, the plan could result in essentially all school districts in the state receiving a minimum of at least $578/pupil in federal ESSER III funds, regardless of how much in-person instruction they provided during the 2020-21 school year.

Under the ARPA, state plans for distributing ESSER III funds are subject to U.S. Department of Education (USED) approval.  When Wisconsin submitted its state plan and it was reviewed, the USED found that the JFC’s directive under Motion 57 to explicitly exclude school districts that provided in-person instruction for less than 50 percent of their total instructional hours during the 2020-2021 school year from eligibility to receive funds violated the intent of the ARPA because it would prevent the students who lost the most in-person instructional time as a result of the pandemic from receiving these funds and much-needed services those funds would provide, and because it would also conflict with the ARP Act’s statutory requirement that the address the disproportionate impact of the coronavirus on certain student subgroups. That caused a portion of the state plan to have to be reworked.

The DPI’s Latest Plan
The DPI’s plan for distribution of the five percent earmark appears to be consistent with the intent of the ARP Act. It modifies the amount of ESSER III funding that would be distributed based on in-person instructional hours during the 2020-21 school year, and makes technical revisions to the timeline of activities and deliverables for the reading initiative included in Wisconsin’s ESSER III State Plan.

The DPI’s plan for modifying the ESSER III State Plan includes four components:

  1. $37.6 million ($37,643,324) of the unrestricted discretionary ESSER III allocation would be distributed based on in-person instructional hours provided in 2020-21.
  2. $10 million of the $77.0 million ($77,092,872) five percent earmark for addressing learning loss would be set aside for two new grant programs.
    • $5 million would be used to establish a competitive grant program under which school districts and community-based organizations could apply for funding to expand out-of-school time services to students.
    • $5 million would be used to create a program under which Graduation Alliance would work with school districts to identify and re-engage students who have been chronically absent during the COVID-19 pandemic.
  1. $67.0 million ($67,092872), or the remainder of the five percent earmark for addressing learning loss, would be distributed in a way that ensures that all school districts receive a minimum per pupil amount and a minimum total LEA grant as follows:
    • If a school district ‘s initial ESSER III grant based on the Title I formula allocation is less than $578 per pupil, provide additional funding to raise the school district’s grant to $578 per pupil.
    • If a school district’s ESSER III grant with the per pupil minimum adjustment is below $320,863, provide additional funding to raise the school district’s grant to $320,863.
    • For very small school districts or independent charter schools with fewer than 25 pupils, the minimum grant amount is $200,000.
  1. Technical revisions to the timeline of activities and deliverables for the reading initiative.
    In addition, DPI will request a federal waiver to ensure the reading grants can be awarded through 2023.

**We encourage school leaders to contact members of the Joint Finance Committee and ask them to support the modifications in the DPI’s plan.  This time has come to get this money out to our school districts.**


“ESSER” is shorthand for the Elementary and Secondary School Emergency Relief Fund grant program authorized under ARPA, which provides federal funding to help local educational agencies (LEAs) prevent, prepare for, and respond to COVID-19. “ESSER III” is the third of three separate federal COVID relief allocations for K-12 schools.

The ARPA directed that 90 percent of Wisconsin’s ESSER III allocation (or about $1.4 billion) be distributed to school districts and independent charter schools according to the 2020-21 Title I, Part A formula.  The remaining ESSER III funds not allocated according to the Title I formula were earmarked for specific purposes.

Under ARPA, state education agencies, such as the DPI, are generally required to reserve: five (5) percent of the total ESSER III funding to address learning loss; one (1) percent of the total funding for summer enrichment programs; and one (1) percent of the total funding for afterschool programs. These required set-asides are to be carried out by the DPI directly or through grants or contracts. A portion is also set aside to cover administrative costs.  The remaining 2.5 percent of the total state allotment was to be allocated to school districts according to a plan proposed by the DPI and approved by the JFC. 

Wisconsin has a unique statute that requires the Legislature ‘s Joint Finance Committee (JFC) to review and approve of the DPI’s plan for distributing certain federal funds received by the department.  Under s. 115.295, Wis. Stats., the DPI must submit a plan to the JFC on how to spend additional federal dollars it receives whenever the additional funds received push the total amount of federal funds received by the department above 105 percent of the amount in the Chapter 20 appropriations schedule. The JFC then undertakes a 14-day passive review process of the department’s plan and can approve or modify the plan.

In the case of the ESSER III distribution, the DPI originally proposed using the 2.5 percent allocation to guarantee each district a minimum grant amount of $600,000 per district and proposed to allocate the 5 percent of funds earmarked for learning loss using a formula grant process designed to equalize per pupil awards across eligible districts. 

The JFC scrapped both of those proposals and instead modified DPI’s plan such that the 153 LEAs with an initial ESSER III grant of less than $781 per pupil through the Title I formula used to distribute 90 percent of the funds would be eligible for a minimum grant of $781 per pupil if they provided in-person instruction for at least 50 percent of the 2020-21 school year using the same data collection methodology the JFC specified for determining the ESSER II set aside distribution.

Once those initial distributions have been determined any remaining district that received less than $781 per pupil through the Title I formula used to distribute 90 percent of the funds but did not provide in-person instruction for at least 50 of the 2020-21 school year could apply for the remaining funds.  The allocation to those districts would be calculated by dividing the number of in-person instructional hours provided by the district by the total number of in-person instructional hours provided by all eligible districts, multiplied by the total amount of available funding.

That distribution was deemed by the USED to violate the ARPA requiring the 5 percent set aside funds to be used to address learning loss.

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