The NCSL Blog

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By Elizabeth Romanov

Coupled with the concern about missing students are worries about the financial repercussions of attendance and enrollment declines on school districts.   

Jennifer Schiess, Bellwether Education PartnersThe switch to remote learning in March 2020 led to a substantial decline in student attendance because of technological barriers, yet schools that have resumed in person or hybrid instruction this fall have not seen attendance levels revert to pre-pandemic levels.

Reported enrollment declines are averaging between 2%-4% across the country.  

NCSL’s Dan Thatcher and Elizabeth Romanov spoke with Jennifer Schiess, left, of Bellwether Education Partners about what declining school enrollment could mean for education funding. Schiess says there are three things to think about in how student attendance links to school funding. 

First is the formula structure and how student counts factor into the amount of money schools receive. Most of the funding for K-12 education comes from local and state sources; while the former is largely determined by property taxes, the latter uses funding formulas that dictate the amount of state money a school district will receive. Student enrollment and attendance figures are integral pieces of the formula for calculating that amount.  

Second is the method of count. States have unique ways of determining the pupil count in their schools, ranging from a single count date to average daily attendance, which uses daily count numbers from all or most of the school year. How those counts are conducted could make a big difference in attendance figures across districts and schools this year and next, depending on the local context around pandemic experience and response, how schools are operating and how students and families are engaging with school. 

Third is the year of funding. Regardless of the count mechanism states use, attendance figures will either determine district funding for the current school year or the subsequent one. The stark and unforeseeable drop in enrollment has constrained the extent to which states can adjust payments based on changing data.  

“The real question,” Schiess said, “is whether this year is an anomaly or are these declines in enrollment lasting.” Schiess added that “the financial implications if this is a longer-term trend and will not come home to roost until next year, but schools could be basing their projections for next year on artificially depressed enrollment and attendance numbers.”  

State action has reflected policymakers’ priorities in shielding schools from pandemic-related enrollment and attendance declines. Many states are considering hold harmless policies to provide financial security to school districts with declined student populations:

  • California SB 98: Mandates the California Department of Education to use Average Daily Attendance from the 2019-20 fiscal year to calculate apportionments in the 2020-2021 fiscal year
  • North Carolina HB 1105: Holds Average Daily Membership harmless for the 2020-2021 fiscal year
  • Virginia HB 1800: Provides No Loss funding to local school divisions, which holds school budgets harmless for drops in student enrollment 

For schools that are left to weather the declines on their own, the consequences could be profound. “Historically, even a 1% loss in enrollment is financially destabilizing for districts,” said Marguerite Roza, director of the Edunomics Lab at Georgetown University. Although the attendance-based financial implications will not materialize until next school year, districts are already facing financial pressures due to declines in state revenues and increased costs of delivering in-person learning.  How well they cope depends on state measures in the coming months.   

For more information on state and federal action related to attendance, learning loss and other topics, see NCSL’s Public Education’s Response to the Coronavirus Pandemic page.  

Elizabeth Romanov is an intern in NCSL’s Education Program.

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Posted in: Education, COVID-19
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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.