Dive Brief:
- Public school enrollment is expected to keep declining in 40 states and the District of Columbia through the 2030-31 school year, according to an analysis of federal data released last week by Bellwether and WestEd.
- The two education nonprofits estimate that public schools nationwide could consequently lose $11.5 billion in state revenues annually by 2030-31. The forecasted revenue losses were calculated using individual state enrollment projections and 2022-23 per-pupil spending levels.
- The enrollment challenges are largely driven by decreasing birth rates, Bellwether said. Other contributing factors cited include a “national slowdown in immigration,” out-of-state migration in some areas, and growing interest in private school and homeschooling as a result of school choice initiatives.
Dive Insight:
The U.S. hasn’t seen as significant of a decrease in public school enrollment since the post-baby boom 1970s, the Bellwether and WestEd analysis said. Meanwhile, the demands of public education have shifted drastically since then and are far more complex today.
“Because this moment is unique, the policy tools that state lawmakers have used to address previous K-12 revenue contractions, such as during the Great Recession, are unlikely to be appropriate or effective now,” the analysis said.
The types of previously used — but now-insufficient — short-term responses to enrollment-related budget woes include budget deferrals, reserve spend-downs, spending and service reductions, and temporary tax increases, according to Bellwether and WestEd. What’s needed from state policymakers instead are solutions tied to long-range enrollment projections and students’ changing needs, the two research groups said.
To help state leaders address this challenging financial landscape for schools, Bellwether and WestEd recommended the following three policy approaches:
Adjust policies to reflect shifting student enrollment and needs
This can be accomplished through updating K-12 state funding formulas to weigh enrollment changes, the analysis suggested. Policymakers could implement a dynamic hold-harmless policy or tapering mechanism that gradually shifts funding as enrollment shrinks — instead of using a state funding formula that relies on historic enrollment patterns.
State leaders should also provide sufficient base funding for fixed costs like facilities maintenance, administration and utilities while granting local flexibility on how those funds are used. States could update formulas to provide more funds to higher-need student populations, such as those who live in low-income households or are English learners.
Offer districts the tools needed for success
States can help local districts manage enrollment changes by providing forecasting tools, technical assistance and system redesign grants, according to the Bellwether and WestEd report. Some districts need support to navigate enrollment challenges that lead to budget reductions, staff layoffs and school closures and consolidations, and states can help by making shared resources available at scale.
State leaders could also provide tools for districts to forecast enrollment changes and determine the related short- and long-term budget implications, as well as provide guidance, technical assistance and resource hubs for district leaders needing to right-size their budgets.
Likewise, state-funded grants could help districts devise facility plans or otherwise plan for school closures. And states can also help fund or facilitate labor agreements between districts and unions.
Use strategic communications to improve public confidence
States can strategically inform the public about enrollment trends so as to help districts explain to their school communities why they need to make difficult yet necessary decisions, the analysis said.
This can include state legislators holding hearings to surface trends and solutions to enrollment declines and to spotlight innovative opportunities and success stories. In addition, state leaders can encourage districts to innovate to address changing student needs, demographics and family preferences caused by enrollment shifts.
