Fewer Kids, Less Money: How the Pandemic Puts Districts in a Bind

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Administrators in Anchorage, Alaska, cranked up the volume on their annual back-to-school campaign a few weeks ago when, after scanning district attendance rolls, they realized they were more than 4,000 students off from their projected enrollment.

District leaders appeared on the nightly newscasts and the morning radio shows, they extended in-person registration into the weekend, called parents of kids who were MIA, and then dispatched teachers to start knocking on students’ doors.

For every kid who shows up for class this month and next, the district gets about $10,000 from the state, so a dip that dramatic could ultimately cost tens of millions of dollars and result in widespread layoffs.

“We need to do everything we can to get kids enrolled right now,” said Jim Anderson, the Anchorage district’s chief financial officer. “This is the running of the bulls.”

Across the nation this fall, the coronavirus pandemic has scrambled where and how students are getting an education. Parents are home-schooling their kids, red-shirting their kindergartners, sending students hundreds of miles away to live with their grandparents, sending them to private schools, or, confused about their options, not enrolling their children at all.

If states, as they typically do, use enrollment and attendance figures for September and October to determine how much money districts should receive this year and next, thousands of districts are poised to lose millions of dollars. That’s especially the case for low-income urban districts wracked by absenteeism due to coronavirus outbreaks, and those struggling to get an accurate account of who is attending online. Meanwhile, charter schools and wealthier school districts that manage to boost enrollment or get a better handle on in-person attendance will likely get more state aid this year.

The debate on how to tally how many students districts are serving this year is fraught and currently being hashed out in state school board meetings and legislative committees. It will have financial implications for years to come.

“School this year is not inside four cinderblock walls,” said Robert Hull, the president and CEO of the National Association of State Boards of Education. “What this is forcing us to do is redefine what school is.”

Bottom-Line Impact

How states compile and factor fall enrollment and attendance data into their funding formulas is incredibly complicated and differs from state to state. But, what it ultimately boils down to is, the fewer kids who show up, the less money districts get.

Frantic superintendents across the nation are warning their communities that if their enrollment numbers don’t rebound in the coming weeks, they’ll have to either drain their savings accounts or lay off teachers.

In Clark County, Nevada, enrollment is down 10,000 students, each worth around $6,100.

Salt Lake City lost more than 3,000 students, which could potentially result in a $23 million budget cut.

Some states have circuit breakers built into their formulas to mitigate the fiscal loss and spread it out over several years. Some districts aren’t waiting to act.

In Santa Rosa County, Fla., the superintendent laid off 80 teachers after more than 1,200 students students failed to show up to school, which officials predict will result in $7 million in budget cuts.

Within states, policymakers are at odds over how much money districts should get for students who are only attending classes online or who administrators thought would show up but didn’t and how to count attendance during this fall’s student count dates.

Delaware, Illinois, Kentucky, and Washington legislatures have altered the ways in which they count a student present since so many districts are conducting classes online and having difficulty keeping track of who shows up.

At least three states, including California, Illinois, and Michigan, have altered their funding formulas to factor in last year’s enrollment to stave off budget cuts for low-income districts, according to the Education Commission of the States.

But such a move can be expensive for states, most of which are undergoing severe revenue shortfalls.

“Holding districts harmless might be impossible for some states based on their revenue projections,” said Eric Syverson, a school finance policy researcher for ECS.

Squeezed by States

Rapidly growing charter schools, virtual schools, and school districts that have seen sizeable growth these past few weeks have lashed out at legislatures that want to hold harmless districts with dramatic student loss.

Last month, John Adams Academy, along with two other charter organizations, sued the state of California after its legislature decided to hold harmless districts that have lost thousands of students this year. While the state has since changed the dynamics of its enrollment policy so that growing districts won’t be fiscally punished, the plaintiffs say the amendment is not enough.

“Never in the history of California has a child’s education money been held hostage like this,” said Dean Forman, the founder and board chair of John Adams Academy, a network of charter schools. “The state is giving money to school districts for phantom students, students who don’t exist.”

John Adams Academy recently opened a glistening, new 96,000-square-foot campus on the outskirts of Sacramento, complete with towering windows, three libraries and a performance art stage. It received the $25 million Wall Street bond after promising investors it would be able to recruit more than 700 new students this year. While it reached that number, the state now may not completely reimburse the school to serve those students. It now risks having to take out a high-interest loan to make its annual $1.5 million bond payment.

“We’ve counted on that money, worked toward it for seven years, and to have that rug taken out from underneath us at the last minute is a horrible situation,” said Foreman.

Fairness Issue

Administrators in districts that have lost thousands of students say it’s unfair to use the first few months of this very unusual year to determine how many students they are serving.

Every spring, administrators use Census Bureau data, historical birth and housing patterns, and anecdotal information to predict how many students they’ll have to serve in the fall. For low-income students, students with special needs, and English-language learners, districts receive extra money from the state and federal government.

They then craft a budget based off those projections.

In addition to the pandemic forcing parents to reconsider how their students should receive an education this year, districts had to alter their registration procedures this summer to reduce crowding and long lines, conducting the process online or over the phone in what parent groups have described as a frustrating process. And administrators are questioning the validity of their attendance rolls since teachers are interacting with students in a myriad of ways throughout the week, both in-person, online, over e-mail, and on the phone.

Alaska takes attendance over several days throughout September and October to determine the frequency and the type of students who will likely show up for the rest of the year, a period known in the state as “oasis count.”

Anderson, Anchorage’s CFO, said that after the district announced it would conduct classes online this fall, he started noticing private schools promising to conduct in-person learning no matter what the local infection rate is, and an abnormal number of parents who started telling the district they’d rather just home-school their child. Other parents sent their children back to the contiguous United States to live with relatives.

Most troubling, because the district wasn’t able to test students with special needs over the summer due to the pandemic, the district is dozens of students off its projection for special services. It typically gets around $95,000 for each student with exceptional special needs.

“We certainly will lose money,” Anderson said. “That’s the fiscal reality.  I don’t blame the parents who are trying to find the best situation for their kids, but we’re going to have to make budget cuts, and parents are going to come back and say, ‘This isn’t what my kid’s classroom used to look like.’ Well, yeah. That’s how money works.”

Vol. 40, Issue 07, Pages 12-13

Published in Print: September 30, 2020, as Fewer Kids, Less Money: Pandemic Puts Districts in a Bind
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