Lincoln Park Public Schools prides itself on its fiscal stewardship, including a high bond rating as well as keeping students safe, dry and warm by updating school buildings.
But a decision by the federal government to claw back COVID-19 school funding nationwide could harm both of those goals, forcing leaders in the Wayne County district to search for a way to recover $780,000 the district had dedicated to upgrading its outdated HVAC system.
“The sudden and unexpected move by the (federal) Department of Education has caused uncertainty and puts key projects like upgrading our outdated HVAC system at risk,” Lincoln Park Superintendent Terry Dangerfield said. “We are working with our financial team to develop contingency plans so these sudden cuts to funding will not negatively impact learning or kids in our classrooms.”
Michigan school districts that stand to lose millions in federal pandemic dollars are defending projects they said are critical to student health and safety as they search for other sources of revenue to complete projects that have been planned for months, but may never come to fruition.
Last week, state education officials said 27 local districts — including West Bloomfield, Hamtramck, Royal Oak, Lincoln Park and Northville — might need to make budget cuts after the federal government canceled an extended spending deadline for COVID-19 funds.
Michigan Attorney General Dana Nessel on Thursday joined 14 other attorneys general to sue Secretary of Education Linda McMahon and the U.S. Department of Education for allegedly unlawfully rescinding the extended deadline. The move essentially cut off access to $25 million in stabilization funds, she said.
“School districts across our state relied on a clear, approved timeline to complete essential projects to keep classrooms warm, ventilated and safe for kids,” Nessel said in a statement. “Rescinding those funds at the last minute without warning or any legal basis is illegal and harms some of Michigan’s most vulnerable children.”
Initially, the Michigan Department of Education said nearly $42 million was at risk. The next day, state education officials issued a clarification that more than half of the money — about $23 million — had already been reimbursed to the districts by the state, which acts as a pass-through for federal dollars.
That left $17 million of unspent money no longer accessible to schools that had already planned projects with the cash months earlier. Many districts sought and received extensions to spend the money, in some cases for updating HVAC systems during the summer months with fewer interruptions to instruction.
On Wednesday, state education officials issued another statement, saying “given the unpredictability of the current federal administration,” they are concerned the U.S. Department of Education may seek to take back the $23 million the state has already paid out to districts.
Michigan schools received more than $6 billion in COVID relief funds spread across three years. Each district had to submit a spending plan to the state; most had been using the money for tutoring, summer school and building improvements.
McMahon sets off worries
In late March, McMahon issued a national directive stating that the deadline for using the funds, which was extended during the Biden administration, “was not justified” and that states and school districts “have had ample time to liquidate obligations,” according to a copy of the letter obtained by Education Week.
The March 28 communication from McMahon announced that the deadline for reimbursement requests for Coronavirus Response and Relief Supplemental Appropriations and American Rescue Plan funds had been changed from March 28, 2026, to one full year earlier — March 28, 2025.
Madi Biedermann, a spokesperson for the U.S. Department of Education, said in a statement last month that the COVID-19 pandemic is over and states and school districts can no longer claim they are spending their emergency pandemic funds on “COVID relief” when there are numerous documented examples of misuse.
“The Biden Administration established an irresponsible precedent by extending the deadline for spending the COVID money far beyond the intended purpose of the funds, and it is past time for the money to be returned to the people’s bank account,” Biedermann said in the statement. “The department will consider extensions on an individual project-specific basis where it can be demonstrated that funds are being used to directly mitigate the effects of COVID-19 on student learning.”
Like some other states, Michigan had been approved to submit delayed requests for late reimbursement of its pre-approved projects, state school Superintendent Michael Rice said. The 27 districts entered into contracts with the understanding that their pre-approved projects would be reimbursed by the federal government, Rice said.
On Tuesday, the State Board of Education called on McMahon to honor the federal government’s previous commitment, saying the districts had entered into contracts for the allowable work to be completed and had relied on the earlier approval as assurance that the federal funds would be available.
“The State Board of Education will continue to fight for these federal funds that should rightfully go to school districts that were promised financial assistance to keep children and staff safe and healthy,” board President Pamela Pugh said in a statement. “Canceling the funding with no notice is unfair to students.”
Hamtramck Public Schools officials said they had relied on the federal extension to award contracts for window replacement and HVAC system upgrades — projects that were aimed at improving air quality and health safety across school buildings.
Jim Larson-Shidler, Hamtramck’s interim superintendent and chief financial officer, said the district worked swiftly with contractors to account for the completed work and revise its final expenditure report. This effort reduced the amount of unexpended federal pandemic funds to $3.9 million, he said.
“This reversal presents serious challenges for our district and others who followed federal guidance in good faith,” Larson-Shidler said. “We remain committed to ensuring these projects — critical to the health and safety of our students — are completed as planned.”
Larson-Shidler said the state education department and the Michigan Attorney General’s Office are advocating on behalf of Hamtramck and other affected school districts across the state.
Pontiac leader: It’s ‘unduly distressing’
State education department officials said they will be working with districts to file requests for extensions on an individual project-specific basis for the outstanding federal funds.
Kimberly Leverette, interim superintendent of the Pontiac school district, said she was stunned by the sudden rollback of funding for COVID-19 funds that had previously been approved.
“The potential impact on our district is significant, as the majority of our $3.3 million has been committed to projects that are complete and we have paid for. We are currently in the process of submitting for reimbursement on those projects,” Leverette said. “The lack of warning of this change is unduly distressing for all involved and has caused significant financial strain and concern over necessities and critical resources that we were assured had been approved.”
The Flint schools superintendent issued a statement last week saying media reports of funds owed by his district were “misunderstandings.” State officials had said Flint Community Schools could lose $15.6 million in reimbursement based on McMahon’s decision to rescind the deadline. The state education department’s clarification said Flint schools had actually received $14.2 million in reimbursement.
“I want to be very clear: We have not been notified of any federal request to return funds, and all (school pandemic) ESSER 3 funds have been allocated and spent responsibly in compliance with federal and state guidelines, as well as deadlines met, by Flint Community Schools,” Superintendent Kevelin B. Jones II said.
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