Enrollment in public schools is declining, district budgets?

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Student numbers matter in funding for public schools, and a 2% nationwide drop in K-12 enrollment during the pandemic is a budget wake-up call that districts are watching closely.

It’s a looming “crisis”, says Marguerite Roza, director of the Edunomics Lab at Georgetown University. If the missing students never come back, “the system will have to find a way to accommodate the falling dollars.”

Why we wrote this

School funding formulas matters more than usual this year after a sharp drop in attendance linked to the pandemic. But federal and state efforts to help are already underway.

Most remote districts usually have surpluses, which could inflate budgets next year. But districts that operate primarily in person are more likely to overspend and rely on additional relief.

The latest federal relief bill (averaging $ 2,520 per student) aims to support reopening of schools and help students catch up. Bill prohibits states from using new federal funds “as an excuse to cut public spending on education” in their next two fiscal budgets, reports the news site 74 million.

Several states are expand palliatives who anticipate an increase in registrations.

Declining kindergarten enrollment led to almost a third of the 2% decline nationally. Some parents have held children old enough to enter kindergarten, but young enough to wait. Others turned to private, chartered, or home education options as public schools maneuvered controversial reopenings and setbacks. And up to 3 million marginalized students may not have had formal education since March 2020, a nonprofit estimates.

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Since the start of the pandemic, dozens of students have not attended class. Kindergarten to Grade 12 public registrations last fall fall by 2% on average at the national level compared to the previous year.

Because the number of students is factored into the funding of public schools, declining enrollment is seen as an imminent “crisis”, says Marguerite Roza, director of the Edunomics Lab at Georgetown University.

If the missing students never come back, “the system will have to find a way to accommodate the falling dollars.”

Why we wrote this

School funding formulas matters more than usual this year after a sharp drop in attendance linked to the pandemic. But federal and state efforts to help are already underway.

Why is enrollment important to school budgets?

K-12 public schools receive a mix of funds that differ by district. The federal government contributes the smallest share of global business figures nationwide – approximately 8% in fiscal 2018.

State revenues constitute the largest share (47%), followed closely by local revenues (45%), which comes largely from property taxes. But again, it varies: before the pandemic, local dollars made up two-thirds of district funding in Illinois.

At the state level, “base formulas” are common. They usually guarantee districts a base amount, but adjust the funds according to the shares of certain students in the district, such as low-income or special education.

Typically, “as the wealth of the district decreases, the state contribution increases,” and vice versa, says Anthony Rolle, dean of the Alan Shawn Feinstein College of Education and Vocational Studies at the University of Rhode Island.

State funding formulas often rely on district membership from the previous year, such as enrollment or average daily attendance, for initial estimates.

Where have the missing students gone?

The reasons vary. Declining kindergarten enrollment led to almost a third of the 2% decline nationally. Some parents have held children old enough to enter kindergarten, but young enough to wait. Others turned to private, chartered, or home education options as public schools maneuvered controversial reopenings and setbacks. And up to 3 million marginalized students may not have had formal education since March 2020, a nonprofit estimates.

What if the missing students don’t come back?

To prevent districts from losing money due to declining enrollment, several states are adjusting short-term funding formulas. But if the decline in enrollment persists, it could force districts to downsize.

Labor, the district’s biggest expense, is difficult to reduce when class sizes are only slightly reduced.

Schools have additional fixed costs that would exist regardless of COVID-19 reductions, says R. Craig Wood, professor of education administration at the University of Florida. Utilities, transportation, and bonds, for example, don’t go away even when enrollment goes down.

“It’s very difficult for school districts to cut to the margins,” says Dr. Wood.

Several states are expand palliatives who anticipate an increase in registrations. North Carolina, for example, adopted in September a “holdback” provision to fund districts based on 2019-2020 counts. Texas announced in March that it would keep districts harmless for the remainder of the school year if they continued or expanded in-person instruction.

How badly COVID-19 has hit state economies could also impact the amount of funding districts receive, adds Dr Rolle. State responses to declining enrollment will vary widely, according to Dr Wood, and will reflect “political tug-of-war.”

Wait, haven’t the schools received federal aid?

Congress approved $ 67.5 billion in pandemic assistance for K-12 schools last year. The American Rescue Plan Act enacted on March 11 offers nearly double that amount to $ 126 billion.

The first wave of relief last March was largely devoted to distance learning. The second approved in December is flexible but likely to address learning loss – and is still on its way to the districts, says Dr Roza.

The latest relief bill (averaging $ 2,520 per student) is aimed at supporting the reopening of schools and helping students catch up. A shine goes to state education agencies, but the bill prohibits states from using new federal funds “as an excuse to cut state education spending” in their next two tax budgets, reports the information site 74 million. However, the education secretary can waive this requirement.

The reopening had an impact on the fiscal health of the district, according to Dr Roza research. Most remote districts usually have surpluses, which could inflate budgets next year. But districts that operate primarily in person are more likely to overspend and rely on additional relief. Expenses such as substitute teachers and nurses this school year made the reopening costly.

Arizona’s largest district, operating primarily in person, is bracing for a possible tax cliff in a few years when its $ 110 million stimulus package dries up. Since last spring, public schools in Mesa have lost at least 4,200 students, a drop in enrollment of 7%. While federal aid has saved layoffs so far, and more money is likely on the way, the district needs to cut spending to its new size, Deputy Superintendent Scott Thompson said.

Major budget cuts don’t make sense, he says, “at the same time that we need to do more for children than we have ever needed to do before.”


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