Declining District Enrollment Offers Opportunity

By Charles K. Trainor

School districts often encounter unexpected financial problems. For example, current economic conditions have caused dramatic reductions in tax receipts while medical insurance and pension costs continue to skyrocket.

Declining enrollment also can create unanticipated financial challenges. Even with regular demographic studies, population changes often are difficult to predict accurately. For instance, a district’s demographic profile may shift suddenly because the town board denies a housing project, or a major employer decides to close an office or a plant.

When enrollment declines, districts are confronted with difficult choices. Small districts, which often have higher costs per student, are facing increased pressure to consolidate by taxpayers or state authorities.
Merging districts to achieve economies of scale may be viewed as the ultimate solution. Numerous studies have outlined the advantages and disadvantages of consolidations. Once central office functions are consolidated, opportunities to combine or share operations may be limited.

For example, to achieve equity between two merging staffs, the renegotiation of employee contracts may lead to higher salaries for the lower-cost partner. If the mix of teachers for required subjects is inadequate, additional hires may be necessary. Also, both employees and students will face transportation issues such as extended travel times. Schedule changes may cause district expenses to rise.
In other words, savings may be anticipated, but they’re not always achievable.

Would you like to continue reading?
Subscribers please click here to continue reading. If you are not a subscriber, please click here to purchase this article or to obtain a subscription to ASBJ.