Lawrence school district’s enrollment decline risks a loss of $1.5 million of state funding, but district should have options to soften the blow

photo by: Sylas May/Journal-World Illustration

The Lawrence school district’s recent enrollment decline could mean a significant decrease in state funding for the 2021-2022 school year, but a state education advocate says there will likely be ways to soften the impact.

A look at the state’s education funding formula suggests that the district’s decrease of 325 students this fall compared to last year could cost the district more than $1 million when it crafts a budget next summer. But Mark Tallman, the Kansas Association of School Boards’ associate director for advocacy and communications, said the district should have options available in the state’s education funding law that would help soften the blow of the enrollment decline. He said the district could continue to use the enrollment number from the previous year to prepare for funding drops.

“There is a mechanism that will likely soften it — maybe not permanently, but it will give them more time to plan,” Tallman said.

According to the Kansas Legislative Research Department, the base state funding for schools is scheduled to be $4,706 per student for the 2021-22 school year. As the Journal-World previously reported, the Lawrence school district counted in September a decline of 325 students. If the district were to lose the base state funding for each of those students in 2021-22, that would be a funding drop of $1.53 million.

However, it’s difficult to estimate exactly how much the district’s funding could be affected, because the funding formula is more than just a base per-pupil amount. Kathy Johnson, finance director for the school district, told the Journal-World last week that the state funding formula has many more aspects to it than the base state aid per pupil, such as the “weightings” of additional funding for students who are in special education programs or are from low-income households, among other categories. She said the school district does not yet know how funding for special education will work out in the state’s funding next year.

The district does expect the enrollment drop to affect funding, Johnson said, but the district doesn’t know by how much yet.

Johnson also explained that the state’s education funding formula provides options for the district to help deal with enrollment declines.

“The formula allows for some declining enrollment provisions that will allow us to not have to realize the full enrollment drop impact to funding all at once,” she said in an email.

Last year, the school district saw a decrease of 182 students, or a drop of 1.5%. To deal with that decrease, the school district used the enrollment numbers from the year prior, which is allowed under the state’s funding law to help districts deal with “blips” in enrollment, Tallman said. If the district were to lose the base per-pupil funding for those 182 students, it would be facing a decrease of about $850,000.

Tallman said the district should still have the option. But that feature can’t stave off funding drops forever, which means the district would eventually need to make changes to its budget. In the meantime, however, it gives the district more time to plan and spread out the revenue losses in a controlled manner, Tallman said.

“Next year, their budget may be lower than this year’s if they were already using the preceding year, but it would not be based on the drop of the current year,” Tallman said.

In July, Johnson had warned the school board of such a situation. When the board approved the budget for the current school year, she explained that the district was using the 2018 enrollment numbers but it would need to account for the drop in enrollment eventually. She said a drop this fall, which eventually came to pass, would cause the district to see a decrease in funding in some way.

“The challenge is we’re going to have to pick up that drop in enrollment at some point,” Johnson said in July. “If the 2020 enrollment doesn’t at least come back up to the level we’re at, we’re going to see a decrease in funding.”

Lawrence school board President Kelly Jones and Vice President Erica Hill told the Journal-World this week that they have had preliminary discussions with district leadership about the recent enrollment drop and how it will affect school funding. The district is expected to provide the board with a budget report during its Nov. 9 meeting, which will likely help the board understand what kind of funding deficit the district may be facing, Jones said.

Hill said finding cuts in the district’s budget would be difficult, noting “everything in the budget is important to serving and supporting students.” But she said the board has a committee dedicated to budget and program evaluation, and she would lean on its findings to help her decide what’s best for the district’s budget.

Meanwhile, Jones said school districts across the state appear to be dealing with the same enrollment issue because of the ongoing coronavirus pandemic. Ann Mah, a member of the state school board, told the Journal-World recently that she expected to see a drop statewide.

The pandemic has also changed the way schools operate, bringing new costs to account for public health measures that did not exist before. Jones said she believes the state should take that into account when funding schools next summer.

“This is not a normal year,” Jones said in an email. “Across the board, we need more staff (and) more resources, not less. Kansas should not apply the school funding formula like this is business as usual.”

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