In the 21 states examined, public K-12 enrollment declined in every state except for three states and the District of Columbia. The AP and Stanford found that public K-12 enrollment dropped by approximately 711,000 students in those locations. California and New York experienced massive enrollment declines, with nearly 271,000 and 133,000 students leaving public schools. 

By contrast, K-12 enrollments increased in other schooling sectors. Homeschool enrollment grew by about 184,000 during the pandemic, as likely would’ve been expected, with the homeschooling sectors in Florida and New York growing the most. 

Private school enrollments also grew, but more modestly, increasing by nearly 103,000. Florida, again, and Tennessee experienced the most significant growth in their private schools. 

Yet, the private and homeschool sector growth only accounted for about 40% of public school enrollment losses. Dee estimated that population changes, such as students moving to other states and declining birth rates, accounted for more than a quarter of public school enrollment losses. 

At the same time, the report estimated that 240,133 students remain unaccounted for. These unexplained losses featured most prominently in California and New York, where nearly 152,000 and 60,000 students remain missing, respectively. 

Some absences are likely due to unregistered homeschooling and families not enrolling their children in kindergarten, which is optional in nine of the 21 reviewed states. In these cases, Dee estimated that skipping kindergarten accounted for almost 40% of unexplained absences.

Nonetheless, some students have not attended school for multiple years now. Researchers have previously estimated that the lifetime earnings of students who experienced just one year of learning loss could be reduced by more than 9%, so there will be long-term concerns about many of these students and their futures. 

These public school enrollment declines have also hastened financial crises for many school districts that were unprepared for them, especially urban ones. For instance, Minneapolis Public Schools announced an impending fiscal crisis due to declining enrollment last fall.

With fewer students in public schools and an increasing number of families more comfortable with switching schools, public school districts will need to up their game as they navigate a more competitive education marketplace. Research shows that school districts can positively respond to competitive pressures by implementing measures like open enrollment. 

Policymakers should weaken school district monopolies, so students have options outside of their residentially-assigned schools. Oftentimes students drop out of school because of bullying by other students, not feeling like they fit in with classmates, not getting the academic attention they need, or conflicts with teaching staff. Policies, such as education savings accounts and open enrollment, provide students with flexible schooling options to transfer to schools that fit their needs. Education savings accounts, in particular, allow for significant educational customization, paying for tuition, books, physical therapy, transportation, and much more.

From the states

State policymakers continue to advance school choice proposals nationwide.

The Utah State Senate failed to pass a proposal (S.B. 166) to make microschools legal in the state.

In Idaho, the Senate Education Committee passed a proposal (S.B. 1038) that would establish approximately 6,600 education savings accounts. These accounts could be used to pay for various approved education expenses, such as private school tuition or textbooks. There are no income restrictions on the accounts. 

The Arkansas Senate passed Gov. Sarah Huckabee Sanders’ LEARNS Act (S.B. 294), which would initially establish education savings accounts for students who are homeless, in foster care, have disabilities, or are assigned to failing public schools. However, student eligibility would expand by 2026 to all K-12 students. At the same time, the proposal would also remove any caps on charter schools and student transfers through open enrollment. Currently, the bill has 25 cosponsors in the Senate and 55 cosponsors in the House, providing a supermajority and majority, respectively.

What to watch

South Carolina policymakers are thinking about expanding open enrollment. Proposals in the South Carolina House and Senate would expand public school choice, allowing students to transfer to public schools other than their assigned ones. Currently, some public school districts in the Palmetto State permit students to participate in within-district open enrollment, but the new proposal would require all school districts to participate in cross- and within-district open enrollment. During his testimony, Reason Foundation Senior Policy Analyst Christian Barnard recommended adding transparency provisions to strengthen the proposal.

Texas governor’s State of the State address calls for school choice reforms. Texas Gov. Greg Abbott called K-12 education an “emergency item” this legislative session. Noting that Texas successfully implemented education savings accounts (ESAs) for students with special needs during the pandemic, Gov. Abbott stated that Texas now needs to establish universal state-funded ESAs for all Texas families. 

Recommended reading 

A Poor Poverty Measure
Ishtiaque Fazlul, Cory Koedel, and Eric Parsons at Education Next

“While it has been understood for some time that school lunch enrollment as a poverty indicator is blunt and prone to error, the magnitude of the problem has not yet been fully appreciated. In exploring the rules, features, and processes of the National School Lunch Program, we find that the program’s design, incentives, and lack of income-verification enforcement likely contribute to the oversubscription.”

Stockton, Calif., School Officials Could Face Criminal Charges after Audit Finds ‘Sufficient Evidence’ of Relief Fund Fraud
Linda Jacobson at The74

“The audit by an independent California agency largely focused on a questionable $7.3 million contract paid for with pandemic relief funds. In 2021, former officials appeared to ram through the purchase of 2,200 ultraviolet air filters designed to kill COVID despite multiple warnings that they weren’t following laws and procedures, the report said.”

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Are you a state or local policymaker interested in education reform? Reason Foundation’s Education Policy team can help you make sense of complex school finance data and discuss innovative reform options that expand students’ educational opportunities. Please reach out to me directly at jude.schwalbach@reason.org for more information.  

The post Funding Education Opportunity: Examining public school enrollment losses and sectors with gains, state education legislation, and more appeared first on Reason Foundation.

How the TEEOSA Formula Works

Nebraska’s core K-12 funding formula, the Tax Equity and Educational Opportunities Act (TEEOSA), controls about 94% of all state and local school operations funding in Nebraska. Put simply, the TEEOSA formula calculates school district funding as follows:

Needs – Resources = State Equalization Aid

The formula uses three basic steps:

Step 1- Determine School District Needs: The state first calculates each school district’s revenue entitlement, or Need, based on a wide array of factors. The key factors are student enrollment counts, concentrations of students in poverty, counts of limited English proficiency students, and qualifying special education expenses from the previous year. The result is a total revenue figure for each school district that will be covered by local and state funds.

Step 2- Determine District Resources: The state determines how much of a school district’s revenue entitlement can be covered by local property taxes, allocated income tax funds, and several other revenue sources. The property tax contribution is called the Local Effort Rate, and it was $1 for every $100 of adjusted property valuation in the 2020-2021 school year. Importantly, the Local Effort Rate is an assumed contribution, not a required one. Most school districts in Nebraska tax below the Local Effort Rate. Districts can also keep any revenues they raise locally that exceed their Need calculation.

Step 3- Determine State Equalization Aid: For any school districts that can’t cover their Need calculation from the revenue sources in Step 2, the state fills the difference with state equalization aid. This ensures that every school district in Nebraska at least receives its revenue entitlement as determined by Step 1. About two-thirds of Nebraska’s school districts don’t qualify for state equalization aid. This is very often because their Local Effort Rate is more than enough to meet their Need calculation.

How to Use the Nebraska K-12 Funding Reform Model

Improving the fairness of Nebraska’s K-12 finance system and alleviating property tax burdens will require shifting school district revenue sources and streamlining the state’s funding formula. Reason Foundation’s Nebraska K-12 Funding Reform Model allows users to simulate how changing the state’s school funding system might affect each school district in the state. With this tool, stakeholders can make changes to the school district’s Local Effort Rate and state funding formula mechanisms in the Model Input Panel on the lower-left corner of the screen. Once changes are made, users can hover over individual districts to view the financial effects and view summary impact charts on the right side of the screen. 

Users can also select from three different pre-loaded scenarios to get a sampling of the tool’s capabilities. Note that none of the three scenarios are being endorsed by Reason Foundation or the Platte Institute.

Assumed Local Effort Tax Rates

Using this tool, users can make changes to the assumed Local Effort Rate. After decreasing the Local Effort Rate in the Model Input Panel under the Tax Rates tab, one can evaluate how any change will affect school district funding, district tax rates, and the additional state equalization aid required.

For example, if one decreases the statewide assumed Local Effort Rate from $1 (meaning $1 for every $100 of assessed property valuation) to $0.75, they can view different summary results on the right side of the screen. In this scenario, the model estimates that 73 school districts see an overall increase in per-student funding, 145 districts see an increase in per-student state equalization aid, and 157 districts see a decrease in tax rates. Moreover, the total amount of state equalization aid required increases from $880 million to $1.269 billion. Notice also that no changes are expected for the formula Need calculation since changing the assumed Local Effort Rate should have no impact on this calculation.

State Formula Mechanisms

The second major component users can change in the model is how the state funding formula is calculated. Nebraska funds school districts by calculating the Need for each school district. This calculation is based on a complicated formula that factors in both individual student characteristics—such as poverty, limited English proficiency (LEP), and special education—as well as district size and district comparison groups. In the Model Input Panel, users can change different aspects of the current formula by selecting tabs labeled Basic Funding, Poverty Funding, SPED Funding, or LEP Funding. Under any of these tabs, users can deviate from how that funding component is currently calculated and simulate how adopting a more student-centered formula would affect individual districts and state equalization aid.

For example, under Basic Funding, a user can select the “single base” option and make no adjustments for school district size. This selection models the effects of funding each school district based on a single per-student amount, regardless of size. If users select a single base amount of $10,000 per student, the model estimates that 30 school districts see an overall increase in per-student funding and 33 districts see an increase in their per-student formula Need calculation. Notice the model estimates no changes to tax rates, since changing formula calculations alone doesn’t impact tax rates.

Conclusion

Importantly, the Nebraska K-12 Funding Reform Model has limitations when it comes to modeling tax policy changes. For instance, the model can’t probe potential tax reform strategies such as broadening the state sales tax base or changing property valuation practices—two issues that require separate analyses. The model also doesn’t account for the impact of property tax credits on individual taxpayers. The tool is limited to evaluating how changes to the assumed Local Effort Rate can impact actual district-wide property tax rates. It also assumes that any additional state funds required to compensate for decreases in property taxes are available. 

The Nebraska K-12 Funding Reform Model is an excellent resource for stakeholders to better understand the state’s funding system and its dependence on property taxes. The model also empowers users to explore potential reform pathways to make the state K-12 finance system more transparent and fair to both taxpayers and students. 

The post Nebraska K-12 Education Funding Reform Model appeared first on Reason Foundation.

You can explore the interactive model here: Arizona K-12 Funding Reform Model

Arizona’s K-12 funding system is broken, with research showing the state’s highest property-wealth school districts generate $5,599 per pupil more on average than their lower-wealth counterparts. For instance, Queen Creek Unified School District gets 184% more per student than Isaac Elementary School District due to factors that have nothing to do with student needs. Matthew Ladner, director of the Arizona Center for Student Opportunity, also notes that nearly one-third of districts receive at least twice as much funding per-pupil as Snowflake Unified, Arizona’s lowest-funded district.

But gaping differences in funding levels aren’t the only problem. Equally as important is the fact that the school finance system—a relic of the 1980s—wasn’t designed to support an education ecosystem with robust school choice for families. With 21% of Arizona’s K-12 public school students now attending charter schools and many more exercising open enrollment, it makes little sense to continue tying dollars to local property wealth and the whims of low-turnout revenue elections.  

Over the past decade, the number of charter students in the state has nearly doubled yet, on average, students in charters receive $1,308 less per pupil compared to school districts and not all dollars follow students across district boundaries when families decide to transfer, leaving hundreds of thousands of students shortchanged. Reason Foundation’s Christian Barnard summarizes Arizona’s situation perfectly:

“School choice is becoming mainstream, and that’s great news. But before long, states will also need to grapple with updating school-finance formulas that fail to fund all kids fairly, are too reliant on local taxes, and don’t easily accommodate student movement between schools.”

Unfortunately, school finance reform is a daunting task for state legislators even when there’s widespread agreement on its merits. For example, it was only after years of deliberation that Tennessee finally adopted a student-centered funding system this past May, and until recently Texas was allocating billions of dollars each year through its Cost of Education Index, which adjusted funding using demographic data from 1989-1990.    

The reality is that politics is deeply ingrained in public education, and calls for greater equity only get you to the start line of the funding reform marathon. Many policymakers just want to know: how would a policy affect my school district’s bottom lines?

This type of information can be tough to come by, which is why Reason Foundation’s education policy team developed the Arizona K-12 Funding Reform Model. This tool, which streamlines several datasets into one dynamic interface, allows policymakers and advocates to explore complex policy solutions in real-time, including the estimated impacts on 226 school districts and 427 charter schools, and the state’s K-12 budget. Users can explore myriad combinations of reforms including adjustments to special education weights, changes to the base level amount, and the effects of replacing local levies with state dollars.

Our team mapped three reform scenarios, which are discussed here, to help users get started.

But this is only the start, as we aim to revise our model over time to reflect updated data, stakeholder feedback, and innovative policy solutions. Arizona’s K-12 funding system is in desperate need of repair, and stakeholders should be empowered with the tools needed to get reforms across the finish line. To learn more or to schedule a training, please e-mail Ari.DeWolf@reason.org.  

The post Arizona K-12 Funding Reform Model appeared first on Reason Foundation.

In cooperation with the Texas Public Policy Foundation, Reason Foundation has created the Texas Student Transfer Dashboard to shine a light on open enrollment trends in the state. The interactive tool below maps the 2018-2019 student transfer data for every public school district in Texas. It also provides charts that show these trends by school district ratings and school district student demographics.

There are two types of open enrollment: Intradistrict refers to transfers within a child’s home school district, while interdistrict refers to transfers outside of a child’s home district. The subject of this research is exclusively on interdistrict open enrollment.

Our analysis finds that three percent of Texas students transferred to a traditional public school outside of their assigned school district in the 2018-2019 school year.

Importantly, these students tended to transfer to higher-performing school districts as measured by state accountability grades. In 2018-2019, roughly 45,000 Texas students transferred to a higher-performing school district at least a letter grade above their residentially assigned district.

We also find that students tend to leave lower-income school districts at greater rates than higher-income school districts, although it’s not possible to determine the demographics of these students due to lack of state and school district reporting policies.

Additionally, we observed that Texas school districts accept transfer students at varying rates, with some school districts enrolling thousands of students from outside of their boundaries and others enrolling none at all. Because the state does not report school district transfer policies it is difficult to know how widespread transfer opportunities are and whether additional seats are available for students.

It is clear though that there are substantial policy barriers to ensuring that all of Texas’ students have access to robust open enrollment opportunities. These include inadequate protections for families, opaque transfer processes, as well as limited support for transportation outside of a student’s residentially-assigned school district.

There is also a real need for increased transparency and reporting on open enrollment at the state level. While Texas’ open enrollment data is vastly better than most states, it still falls well short of providing stakeholders with the information they need to make sound policy decisions. Because of this, it is impossible to determine the demographics of transfer students, their reasons for transferring, or even the schools they are leaving from and going to. Steps should be taken to ensure these and other data—including school districts’ transfer policies—are collected and reported regularly.

The interactive tool below allows users to see which school districts in Texas have the highest rates of student transfers. The tool also shows how student demographics and district performance impact transfer trends. The full dashboard is also available here.

The post Analysis of Texas School District Open Enrollment Data appeared first on Reason Foundation.