Impact Aid funding delays and staffing cuts worry districts, committee hears

The Senate Committee on Indian Affairs heard detailed testimony on how Impact Aid supports school districts serving federally connected and tribal land and how payment delays and limited program staffing put districts at immediate fiscal risk.

Nicole Russell, executive director of the National Association of Federally Impacted Schools, told the committee Impact Aid “sends funds directly to school districts,” and that many federally impacted districts rely on those payments for basic operations. Russell said districts were still waiting for FY2025 funds after the year-long continuing resolution and described one district that was “three pay periods away from needing to borrow funds just to make payroll.”

Impact Aid was established in 1950 to reimburse school districts for lost property tax revenue when federal or tribal lands reduce the local tax base. Russell said Impact Aid can be used for a wide range of needs — special education, transportation, language programs and teacher housing — and that construction grants remain deeply underfunded at roughly $19,000,000 annually. She warned that moving the program to another agency would introduce “unnecessary bureaucratic hurdles” and risk losing institutional knowledge: Russell noted the program has a small team of dedicated analysts and cautioned that reassigning or displacing that staff would likely cause payment delays.

Committee members pressed for steps to ensure timely payments and to protect Impact Aid in any larger departmental reorganization. Senators and witnesses emphasized that Impact Aid includes tribal consultation requirements and that any legislative or administrative change should preserve direct funding to districts and tribes.