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K-12 Dive
School enrollment decline threatens lasting funding damage for districts
Naaz Modan
Jan. 20, 2021
Dive Brief:
Low enrollment numbers could be permanent in some areas where students
are moving beyond school district borders, cornering districts into
difficult decisions, said education finance expert Marguerite Roza in a
Tuesday webinar hosted by the Edunomics Lab at Georgetown University.
Even though states are putting in place policies to buffer the impact,
shrinking enrollment could result in a significant decline in funding
districts receive from their state, forcing them to think about whether
they need to "downsize their operations,” Roza said.
In the past, districts reacted to enrollment-related funding losses by
delaying budget cuts, which depletes reserves and causes more financial
strain later, Roza said. Most also resisted closing schools even when
declines persisted, and many will likely delay similar decisions this
time around.
Dive Insight:
As many state legislative sessions get underway this month, Michael
Leachman, vice president for state fiscal policy at the Center on
Budget and Policy Priorities, warned states could sharply cut funding.
According to a report released in December by the National Association
of State Budget Officers, K-12 saw the largest decrease in state
funding for fiscal year 2021 when compared to other state programs.
"Even in a situation where you get across-the-board cuts, the impact
and the pain from those cuts are felt most deeply by the schools and
kids who need the help the most," Leachman said during a Jan. 14
webinar, adding that how cuts are imposed can also impact their outcome.
Historically, even a 1% enrollment loss is "financially destabilizing
for districts," Roza said. For example, Mesa Public Schools in Arizona
is facing a loss of $23 million after a 6% decline in enrollment.
At the same time, some districts are making enrollment and funding
gains, Roza said, adding however that it is often charter and private
schools seeing increases in these areas.
To stave off funding destabilization, some states have developed or are
considering alternative enrollment options. Kansas, for example, is
allowing districts to choose between reporting this year's or 2020's
enrollment. Colorado is allowing districts to calculate enrollment
based on a multi-year average.
"States can do the right thing still," Leachman said, who urged states
to make policy decisions focused on funding districts equitably and
addressing learning losses.
While districts are making budget decisions based on lower enrollment
numbers and funding cuts, they also are being tasked with addressing
learning loss. Federal aid for learning loss provides approximately
$1,100 per pupil, which Roza said could be used in various ways. For
example:
Pay for four months of COVID-19 testing for all students and staff
twice a week to reopen school. While this may help schools reopen, it
won't address learning loss.
Reduce class size by two for all students for two years. Leaders will have to consider what happens when funds for this run out.
Add a month of school for all students. Leaders will have to consider
whether all students need the same kind and duration of support.
Fund two years of tutoring for half of the students. While this is a
more customizable option to meet students where they are, tutoring can
oftentimes be stigmatizing and raises the question of whether students
will participate.
Give schools money per pupil to spend as they see fit. While this
permits schools to innovate, not all districts are comfortable with a
hands-off approach and that could lead to varying results.
While districts tinker with these options, many are calling on the
federal government to provide funding in the next COVID-19 relief
package to help stabilize state and local budgets. President-elect Joe
Biden's proposed $1.9 trillion American Rescue Plan includes $350
billion in aid for that purpose, but some question the package's
viability in Congress.
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