This is the fourth installment of Afton’s five-part blog series, “How Districts Can Afford High Quality Schools, Despite Enrollment Decline,” aimed at recognizing school district financial challenges associated with enrollment decline and offering some actionable recommendations for school districts facing enrollment loss, with or without charter schools.
As we outlined earlier in this blog series, Afton identified 8 ways that school districts can mitigate the effects of enrollment decline (and these were highlighted in CRPE’s “Better Together: Ensuring Quality District Schools in Times of Charter Growth and Declining Enrollment”):
- Uniform intra-district funding formula for district and charter schools
- Continued operational efficiencies, with an eye toward making costs more variable
- School closures and corresponding real estate transactions
- Redistricting / efficient enrollment planning
- End “last in first out” methods of reducing staff
- End unsustainable/unfunded salary commitments (step/lane/raise)
- End proliferation of long term fixed cost obligations (pension/OPEB)
- District commitment to decision making based on long term planning
In this part of our series, we will highlight remedies 5, 6, and 7.
AFFORDING QUALITY SCHOOLS – REMEDIES 5, 6 and 7: CURB POLICIES THAT INFLATE COSTS AS ENROLLMENT DECLINES
Most districts have long-standing contractual agreements and debt agreements that inhibit a school district’s ability to make changes to operations. Making changes to those agreements and avoiding common pitfalls are critical elements to weathering the financial impact of enrollment decline, as highlighted below.
(5) End “last in, first out” methods of reducing staff. Most districts have collective bargaining agreements that require the most junior staff to be laid off. The resulting impact is an increase in average teacher salary, at a time when a district is trying to reduce costs in proportion to enrollment decline.
(6) End unsustainable/unfunded salary commitments (step/lane/raise). Another commitment that school districts often make is guaranteed salary increases in the form of the typical step/lane/raise teacher salary scale. These salary increases can only be afforded if funding increases proportionally either through economic growth or enrollment growth. Basically, growth can often mask the fact that a district made future commitments that far exceed funding that current and future levels of student enrollment will produce.
(7) End proliferation of long term fixed cost obligations (pension/OPEB). Even if school districts reduce their staffing levels in proportion to enrollment decline, they are often left with future obligations to past employees. These obligations grow exponentially on a per pupil basis and in proportion to a district’s overall budget in the wake of enrollment decline. To protect a district’s commitments to the students of today and tomorrow, commitments to support employees with pension and health care far beyond their service time at a school district need to be carefully weighed and front-funded.
- Part 1: Defining the Problem
- Part 2: Solutions and Remedies 1 and 2: Reinventing Funding Formulas and Services with Costs That Seem Fixed
- Part 3: Remedies 3 and 4: Infrastructure Changes and Redistricting
Stay tuned for the fifth and final installment of this series!