With K-12 enrollment drop, funding schools an urgent challenge for Washington state
The number of students enrolled at most Washington state K-12 public school districts has dropped during the pandemic, and superintendents say COVID-conscious operations and reopening require hefty investments.
That combination presents a quandary when it comes to state funding, which for schools is largely driven by enrollment. The Senate Ways & Means committee on Nov. 30 discussed the issue and a need to address it early in the 2021 session that convenes Jan. 11.
Sen. Christine Rolfes, who chairs the committee, called it “possibly one of the single biggest budget items and biggest challenges we’re going to be facing.”
Rep. Laurie Dolan, a Democrat from the district that covers Olympia, said she’s working on a bill that addresses it.
Changes in enrollment
Over the last several months of pandemic-related school shutdowns and, in some cases, partial re-openings, enrollment dropped for the majority of districts. Across the state, full-time enrollment went down by 39,394 students, or 3.7 percent, in October 2020 versus October 2019, according to state data.
Those numbers don’t include students in the Running Start program, which lets students in the last two grades of high school take college classes, or students in the Open Doors system, which provides education and services to students ages 16-21 who have dropped out or aren’t expected to graduate before they turn 21.
The drop is steeper than in earlier data from the Office of the Superintendent of Public Instruction, which showed a 2.8 percent drop in September 2020 versus 2019, as The News Tribune reported.
While most districts saw declines, the extent to which that happened varied. North Thurston Public Schools saw a drop of 756 students (5.1 percent). Tacoma Public Schools lost 1,032 students (3.7 percent), while Peninsula lost 908 (10.2 percent).
Bellingham dropped 312 (2.8 percent), the same percentage drop as Kennewick, which lost 524 students. Ferndale dropped 351 students (7.9 percent).
Most of the overall enrollment decline is attributable to the lowest grades. Enrollment declined nearly 15 percent in kindergarten, overall, according to a Ways & Means staff presentation. One reason for that, staff said, may be parents holding back their children or homeschooling.
Grades 1-6 saw declines ranging from 4.1 percent to 6.2 percent, while changes were more modest in the remaining grades.
Some individual districts, on the other hand, saw enrollment increase. Four of the five districts that gained the most students had previously established distance learning programs, according to data presented by staff.
For instance, Goldendale in the Central Valley saw a 2,078-student uptick — an increase of 127.4 percent. Omak gained 2,807 students (52.7 percent).
Alternative learning experience (ALE) programs, where some or all instruction happens outside a regular classroom schedule, experienced a student enrollment increase of nearly 50 percent in September 2020 versus September 2019, according to OSPI.
The overall dip in enrollment is attributed to concerns around COVID-19 and remote or hybrid schooling in a recent forecast from the state Caseload Forecast Council. It’s expected to be temporary.
The forecast shows enrollment is expected to rebound in the 2021-22 school year, assuming full in-person school will start up by then — of course, there’s a caveat that COVID-19 and remote/hybrid instruction have “injected significant uncertainty into the forecast,” which it says will also be affected by the economic downturn and recovery.
The resulting funding dilemma
“Enrollment is the primary driver of state K-12 funding,” the first bullet point in a staff presentation Nov. 30 read.
For the first four months of the school year, funding is sent to districts largely based on enrollment estimates they submit to the state in August, according to Ways & Means staff.
Starting in January, though, that funding is based on actual enrollment — and adjusted to account for any difference between the estimates and actual enrollment from the earlier months.
That means districts that underestimated their drop in enrollment will get less money due to fewer students now and more will be taken out to make up for over-payments in Fall 2020.
The impact of the declining enrollment, according to Ways & Means staff, is likely to total $500 million across districts at maintenance level (the level the state is required by law to keep funding).
The effect of that drop would vary by district, T.J. Kelly, Chief Financial Officer for the state Office of the Superintendent of Public Instruction, explained in a phone interview.
The state’s budget was passed when little was known about how COVID-19 might impact enrollment. But, there’s no requirement for districts to budget at the enrollment levels assumed by the state, Kelly explained. So, districts may have already budgeted less based on more up-to-date numbers.
Fewer students or not, district officials say reopening and operating during a pandemic is costly.
Art Jarvis, superintendent of Peninsula School District, said at the Ways & Means meeting that the district has had K-1 students in class in-person since late September, along with a significant portion of the district’s students with special needs.
The district lost about $8 million worth of enrollment, Jarvis said, but had to add five teachers in kindergarten and six in first grade to accommodate in-person learning with social distancing. That cost more than $1 million, he said, in the face of the existing $8 million deficit.
Ahead, superintendents see a need for remediation, such as summer school, to get kids back on track — another expense.
Schools have received some federal funding: Districts directly received $195 million in money for Elementary and Secondary School Relief through the federal CARES Act, OSPI information shows. The money was allotted based on a formula tied to the federal Title I program, which takes into account the number of low-income families in a district.
They have two full years to claim and spend that money, Kelly said.
At the meeting, Jarvis said Peninsula’s allotment was $600,000, and it’s been spent. Spokane Superintendent Adam Swinyard said the district got about $9 million and has it all budgeted but hasn’t claimed it all, and Northshore School District Superintendent Michelle Reid said they received $500,000, though the district is much bigger than Peninsula, and the school has spent $1.4 million.
Districts can also seek money from the Federal Emergency Management Agency (FEMA). Kelly said several districts have attempted to do that, but the process is time-consuming and difficult — to his knowledge, just one district was successful and received $2 million.
“We are gonna face one heck of a time if, in fact, the statement is, ‘Each district has gotta resolve this on their own somehow, and your problems are not our problems,’” Jarvis said. “We need to say that the system needs to stabilize schools and we desperately need that help to do what needs to be done in the Fall of 2021.”
Another issue: Transportation funding, while more complex than the role enrollment plays in apportionment, is tied to ridership. One key part of allocation calculations is the number of kids being transported to and from school on three “count days” over the course of a year, Kelly explained.
Data from Fall 2020 shows ridership is down 93 percent, he said.
Lawmakers may think school districts don’t need that funding if schools aren’t in session, Kelly said. But districts say that, if they lay off bus drivers (which are already in short supply) and only have 10 percent of their normal resources, they won’t be able to get kids back to school once that’s possible.
Without a legislative fix, staff estimates transportation funding could be cut by as much as half.
A top priority
On the spectrum of priorities, Ways & Means Chair Rolfes said “having a robust and amply funded public school system” is near the top.
Typically, the Legislature would develop a supplemental operating budget on the same timeline it develops the budget for the next biennium, meaning it’d be finalized at the end of session.
That timeline clashes with the needs of school districts, which have to issue lay-off notices sooner than when the budget will likely be signed, Rolfes said. It always makes this a guessing game for districts, but this time it could result in large, in some cases “devastating,” funding cuts,she said.
The desire to get students back in schools is also a major factor driving the urgency, Rolfes said in an interview. She doesn’t want a lack of funding from the Legislature to be a reason schools aren’t opening.
In principle, she said, if the Legislature wants schools to have an opportunity to open this winter or spring, it’s fair for them to know if they’re getting the resources they would need to pull that off.
To make a difference for schools, staff says there will need to be legislative action by February.
Kelly said that OSPI is supportive of any solution that provides districts funding that’s close to the levels in the current supplemental budget.
For transportation, the agency requested the Legislature provide revenue to districts outside the traditional funding formula to maintain current funding. But it doesn’t have a stance on that same request for funding tied to enrollment, according to Kelly.
At the Nov. 30 Ways & Means meeting, Republican Sen. John Braun of Centralia, who was recently elected Senate Minority Leader, called it “very tricky” to adjust state funding for the K-12 system outside of the statutory funding model amid so much uncertainty.
It’s important, Braun said, to make it clear that when this passes, there’s not an expectation of more funding than the Legislature can provide.
“We have to be, I think, very cautious and deliberate,” Braun said.
Rep. Laurie Dolan said that rather than working the solution into the supplemental budget, she’s working on a bill to address the enrollment challenge on a shorter turnaround. Dolan serves as Vice Chair of the Education Committee and is on the House Appropriations committee.
“If we waited until the end of the long session, that would be too late to stop all the layoffs that could happen,” Dolan said. “Districts need to be assured earlier in the year that the money’s going to be coming, which is why this is a bill and not a budget proviso. It needs early action.”
Before she was a legislator, Dolan was a teacher and later supervised principals at public schools in Spokane. The bill she’s working on would continue — or partially continue — funding schools as if enrollment hasn’t changed, she said in a phone interview. Otherwise, she said schools will have to lay off secretarial staff, custodians, cooks, and other employees who aren’t on continuing contracts.
Those people could end up relying on unemployment benefits, which the state would then pay for.
“We’re kind of in this nebulous area right now, where there’s so many unknowns,” Dolan said — economic forecasts aren’t great, but are better than once expected, the potential for more congressional funding is uncertain, when schools can return safely in-person is also unclear.
Coming up with a solution right now means taking the data available and making decisions in the moment.
“We’re trying to track as many of the ‘knowns’ as we can to make decisions that are fiscally responsible yet keep our K-12 system as well-funded as they can” during the ongoing pandemic, Dolan said.
She’s working with other legislators, such as Sen. Lisa Wellman, a Democrat from Mercer Island who chairs the Senate Early Learning & K-12 Education committee; OSPI; and several stakeholder groups.
“I think we’re all feeling a sense of urgency,” she said.
This story was originally published December 13, 2020 at 5:45 AM with the headline "With K-12 enrollment drop, funding schools an urgent challenge for Washington state."
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