The start up of debate about the return to school has been quick out of the gates. All parties would prefer to see the children back in school to learn in a supportive environment. The administration has voiced its opinion forcefully on the matter in recent days. Since I have a pediatrician and a New York City teacher in my household, I have consulted with each of them on the right course of action for schools across the country reopening — or not.
The American Academy of Pediatrics (AAP) released a statement on the subject. AAP argues there is a strong preference for having students be physically present in the classroom. But how fast this happens and what the density in the classroom should be, in their view, depends on the level of the virus in the community under consideration.
Their express desire is to mitigate further spread of the virus. All children should have their well care visits before school and all required vaccinations that would offer more protection.
What of the finances?
Certainly, one aspect of the discussion needs to be focused on the operating side. The Trump administration suggested that some federal aid would be at risk if schools do not fully open.
AAP is strongly opposed to the politicization of this important consideration. Whether this threat is real, federal funding is the smallest part of school budgets accounting for 10% or less.
States are ultimately responsible for school funding and operating standards within their borders. In many states the provision of a fair and equitable education is written into the state constitution.
The federal government has not had the most prominent role dating back to the birth of the nation. But, federal funding under various titles has become a critical element in the overall education funding status.
The majority leader in the U.S. Senate has suggested there may be another round of fiscal support that should include additional funding for education. If we are to open schools, the funding needs to be forthcoming very soon. As we know, a considerable number of schools in the South and the West plan to open their doors in August.
Another financial aspect is that many school funding arrangements rely on attendance. I am certain that attending virtually counts, but, some of the cherished school funding formulas may have to be reconsidered in light of the pandemic induced changes.
The funding status may lead to some volatility in the sales and trading of school bonds. School districts in Texas have been selling quite a bit of paper recently and there has been no real discernible effect. But, as we know, this market condition may be subject to change.
To open or not?
The AAP group recommends that temperatures be taken, and children should be sent home if they have a reading of 100.4 degrees Fahrenheit or more. Of course, more intense monitoring will require more manpower and more budget authorization to get the job done.
There is also the matter of the debate about three feet or six feet minimums for social distancing. AAP appears to accept three feet if all the other safe practices are being adhered to with strict discipline. Face masks, hand sanitizer, washing hands, etc. are all strongly encouraged.
Randi Weingarten of the NYC United Federation of Teachers discussed the three-feet versus six-feet distinction. She appears to be strongly leaning in the six-feet direction, which would translate to a much smaller classroom population of 50% or less.
Remote learning has had a real test in this environment. It has proven that it works. However, there are two aspects that are problematic. One is the availability of a computer for the student. This may be a problem in certain areas of the country, but is easier to solve to an extent. Charitable donations make a difference in this regard. However, the more vexing problem is that some students have limited or no good access to Wi-Fi. Even if access is available, the availability may be intermittent. Technology-focused providers may have some answers here.
What about the longer term?
The emerging changes due to Covid-19 that will affect schools will also have a longer-term impact on the design and financing of school facilities. Just absorbing the need for future flexibility, the architects will need to go to work on designing flexible space. This may include the need to have more moveable partitions that would have the ability to create differently configured spaces upon demand. HVAC systems will also need to be upgraded with more advanced filters.
This need may necessitate more column free space in the physical plant of schools. What will run counter to this potential change would be the need to maintain the physical integrity of the building.
In states such as California where the Field Act must be adhered to for compliance with earthquake requirements, the challenge will be greater.
Reconfiguring existing space to meet the new pedagogical requirements may prove to be expensive and time consuming. Simply, there may be many hurdles and limitations to doing so.
The adoption of a rotating schedule of attendance in person must be carefully considered. There may be many more expenses that are not readily apparent, including transportation aspects.
Teaching staff must also be considered in the weighing of health and safety. There may be a necessity for more assistants and aides.
If this discussion does not bring about any changes in the budgeting and financing of schools, there is one certainty that will become transcendent. Disclosure about all the Covid-19 influenced considerations will need to be raised and discussed.
School district paper has always been sought after in all market conditions. School financing still represents a relatively significant proportion of issuance. Cynics would say that given the strong market conditions, school paper will sell at tight spreads regardless of all the noise surrounding the sector.
Most market participants care about the fundamentals always.
We just want to be ready if market conditions ever change. Low rates should be with us for a good long time and we do not see severe credit problems developing in the sector. But we are always wary of the possibility.
