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Video: Fiscal Challenges of Declining Enrollment in California Schools

Mary Severance March 5, 2020
photo - Girl Writing While Sitting at Desk in Classroom

Enrollment declines in California’s public K–12 school system are expected to intensify in the coming decade. Districts with falling enrollment face financial pressures, as state funding falls along with the number of students they serve. Lower enrollment also has important implications for the state budget. At a lunchtime event in Sacramento last week, PPIC researcher Paul Warren outlined a new report on declining enrollment and a panel of experts offered state and local perspectives.

Warren explained that enrollment is falling in about half of California’s school districts. In the coming decade, declines will be significant in coastal areas—and in many of the state’s largest school districts. The state budget cushions the fiscal impact of declines in enrollment by delaying attendance-based funding cuts for one year. But enrollment declines are almost always long term, and district costs do not fall at the same rate as district revenues.

Renee Arkus, executive director of fiscal services for the Long Beach Unified School District, said that adjusting to lower enrollment hinges on knowing the speed and the spread of declines. Long Beach, the state’s third-largest district, has been experiencing declines for 15 years. “We’ve lost 25% of our population,” she said, adding that the district has been losing 1,500 to 2,000 student each year, and those losses have been spread across a number of schools.

Sara Bachez, assistant executive director of governmental relations for the California Association of School Business Officials, noted that declining enrollment is one of many fiscal pressures districts are facing. She cited a growing demand for special education, pension and health care costs, aging infrastructure, and the challenge of offering proper compensation for district staff.

Claudia Davis, associate superintendent of the Calaveras County Office of Education, highlighted the challenges that small districts face. Like Long Beach, Calaveras County has been experiencing declines for the last 15 years. But because Calaveras is a small county, it is challenging to find ways to reduce spending. “We have district offices with three people in them,” she said, so cutting staff would have a big impact: “The work has to get done regardless of the size of your district.”

Mike Fine, chief executive officer of the Fiscal Crisis and Management Assistance Team, pointed out that the fiscal challenges that Calaveras County faces are typical, as more than half of the state’s districts serve fewer than 2,500 students. In his view, the best guide to addressing these challenges is the Local Control and Accountability Plan (LCAP) that each district is required to develop. “We have to clearly define what are our core services that we can’t do without, and then everything else is up for discussion,” he said.

Most districts could benefit from state assistance in forecasting and responding to declining enrollment. As Arkus put it, long-term planning is “the only way that some districts can survive this.” And Davis noted that small districts don’t have the human capacity for exhaustive planning. “Long-term planning is difficult when you’re . . . just trying to keep the doors open.”

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