MEET THE EXPERT:
Sean Cavanagh is a senior editor for EdWeek Market Brief, a membership service that offers intelligence about the K-12 market through journalism, analysis and original data collected though nationwide surveys of K-12 officials. Cavanagh is also an associate editor for Education Week, where he has covered federal and state policy, charter schools and school choice, and math and science.
Onvia’s Market Research team spoke to Sean in the recently released 2018 State & Local Government Contracting Forecast.
What have been some of the biggest trends, issues or developments you’ve been seeing this year so far (in 2017)?
We see a continued, strong appetite for online systems and platforms to help schools manage both academic data and other information. This includes everything from attendance to human resources and health records. Much of this trend reflects the overall wave of interest from K-12 in using data much more precisely, especially as it pertains to boosting students’ academic performance. Districts are also investing heavily in new and more expansive forms of learning management systems, student information systems and similar platforms. District leaders expect these systems to create hubs where teachers, parents and students can get relevant information instantly.
There’s also a continued focus on buying curriculum in an increasing array of forms. Classroom resources have been a staple of district buying, of course, and they always will be. But we see a demand for new kinds of curriculum – including materials that are offered online, and that can meet the needs of specific populations, such as English-language learners.
Another, overriding trend, is a focus on “personalized” learning. This is a vague and often aspirational goal and it means different things in different districts. But in general, what it means in K-12 is schools showing an interest in software that can adapt to students’ needs, and data systems capable of pinning down specific academic strengths and weaknesses.
We see a continued, strong appetite for online systems and platforms to help schools manage both academic data and other information.Sean Cavanagh, Senior Editor at EdWeek Market Brief
Do you see these trends continuing through next year?
I do see these trends continuing. But one huge issue to keep an eye on is states’ implementation of the main federal education law, the Every Student Succeeds Act (ESSA), and the demands it places on them. In general, the law gives states much more flexibility in assessment, spending and other issues.
States have also recently been required to submit their accountability plans—basically, blueprints for what they’re going to accomplish under ESSA— to the feds. And these individual state plans offer a treasure trove of insights on the direction of state spending.
One surprising takeaway from those plans pertains to social-emotional learning, which has received a ton of attention from states and districts over the past few years. ESSA requires states to go beyond test scores and grad rates in finding new ways to measure school quality and student success.
Perhaps surprisingly, states have not chosen social-emotional factors as one of the things they want to measure under ESSA. They’re instead focusing on things that are easier to monitor—like absenteeism and college/career readiness.
Expect states and districts to look for products and services that can help them show progress by those specific metrics.
How would you describe your overall outlook for procurement in 2018?
We’re not hearing a lot of optimism from state and local officials about the flexibility they will have to spend on K-12 education. But the picture also can look very different across the states and individual districts. Looking at budgets and budgeting, I would describe the overall fiscal environment as cautious, and somewhat pessimistic.
While there will be funding increases for K-12 across many states for the coming academic year, these are likely to be relatively small boosts. This is partly because tax collections have not been as strong as many states have hoped recently. And there is an overall level of anxiety among school districts about what’s ahead.
I would describe the overall fiscal environment as cautious…
A new survey that we at EdWeek Market Brief just released shows that nearly half of district officials at the local level believe their budgets will decrease over the next two years. And they are also nervous about the impact of proposed deep cuts to federal education programs by the Trump administration – even though Congress has not yet backed those cuts. One state fiscal expert I interviewed recently predicted 2018 to be an “OK year, not a great year.”
We see a fairly steady amount of state and local funding being devoted to K-12 in state and local budgets. But despite the fact that we’re roughly eight years removed from the “Great Recession,” state tax revenues, which along with local funding are the lifeblood of K-12 systems, have risen very slowly – by only about 1 percent in the most recent recorded year. Individual states’ funding for schools has been all over the map, with some states approving basically flat-line spending, and others, like California, offering decent bumps.
I think it’s safe to say that states’ ability to spend on K-12 education and other needs continues to get squeezed by mandated expenses and obligations that are growing faster than overall revenue. If you look at the spate of legislative budget activity over the past year, you will see many states making big payments to cover pension and rainy-day obligations, which leaves less funding for other parts of the budget. Medicaid costs are also swallowing a big chunk of state budgets. Barring dramatic (and politically difficult) policy changes in the states, it’s safe to say that pension and other expenses will continue to loom over many state budgets for the foreseeable future.
In addition to the weak tax growth, and obligations for pensions and other needs, many state legislatures have an overall determination to keep government spending in check, and not raise new money through taxes. That philosophy is going to have at least an indirect impact on K-12 spending, which takes up a huge piece of many states’ general fund budgets.
What kind of an impact do you think the major hurricanes this year might have on procurement trends or buying patterns in 2018 within the Gulf States and Carolinas?
It seems pretty clear that these storms will have an impact on state economies and budgets—but how much of a direct impact this has on K-12 spending, specifically, remains unclear. For instance, the Florida legislature’s chief economist recently told lawmakers that Hurricane Irma’s destruction will make the state budget “much worse” for next year, and maybe for 2019 and 2020, too.
If the overall economy in states like Florida takes a beating, it means less revenue flowing into state and local coffers, and school systems having to respond with less spending - meaning cuts to programs, fewer RFPs, and consolidations of programs. So on the whole, the post-hurricane picture in many of these states is not good for the school districts. But we won’t know the real impact in states like Florida and Texas until we can see if legislators take specific action to protect or aid K-12, or if schools get caught up in the overall sweep of cuts.
In the coming year, what are your expectations for further evolution in cooperative purchasing methods?
In general, I think there’s a strong interest in moving further in this direction. We can see it in efforts such as some districts using Amazon to make purchases while still trying to comply with procurement law. You also see it in efforts such as Amazon’s recent effort to partner with U.S. Communities, a purchasing co-op.
The idea is to allow districts to latch onto existing contracts and buy through Amazon’s marketplace, while avoiding a protracted procurement process and still complying with the law. But I would expect these changes are likely to come relatively incrementally, and unevenly around the country. Local district officials still face huge pressure to 1) comply with procurement laws and regulations; and 2) control costs for taxpayers. Before they step outside longstanding procedures, they’re going to face questions from school boards, parents, and others that the new approaches are accomplishing those goals.
There are other big efforts underway in K-12 to increase buying power, and the quality of products. The Council of the Great City Schools, for instance, which represents the country’s biggest school systems, recently announced that a group of its school systems will jointly buy instructional materials for English-language learners. The districts did this with the goal of setting common, high expectations for education publishers.
In the event that significant cuts are made in federal spending, how could that impact K-12 contracting?
This is one of the biggest wildcards that could potentially impact state and local governments. Trump’s administration proposed cuts of $9 billion from a $68 billion budget for fiscal 2018. Congress so far hasn’t gone along with those plans, though a House spending measure would still make big cuts to next year’s budget, including eliminating $2 billion in money for teacher-training.
If this money, and other sources of federal money goes away, state and local programs will most likely have to make cuts at the local level, as they re-prioritize and try to move money and staff around to make up for the losses.
This interview originally appeared in Onvia's 2018 State & Local Government Contracting Forecast. You can download a complimentary copy of the report below.