Show-Me Institute Podcast

Tough Choices in Education with Jude Schwalbach

In this episode, Susan Pendergrass speaks with Jude Schwalbach, a Senior Policy Analyst at the Reason Foundation, about his recent article on the urgent need for school districts to either reduce staffing or consolidate to survive. They discuss the financial pressures facing many districts due to declining enrollment, the tough decisions schools must make to remain viable, the potential benefits of consolidation, the resistance from various stakeholders, innovative solutions to navigate these challenging circumstances, and more.Produced by Show-Me Opportunity

Duration:: 20m
Broadcast on:: 09 Aug 2024
Audio Format:: mp3

(upbeat music) - Well, Drew Schwabek of the Reason Foundation, thanks for joining us again. I wanted to chat with you this morning about or today about blog you wrote recently. Within, I guess, education policy circles, we are hearing so much and I think we're gonna hear more this year about education funding, because the fiscal cliff is coming and we've talked about a lot of the showmeans too, but you had a blog recently where you talked about some real new hard data that are out and that it's not just me saying it. We might have to close some schools and fire some teachers. Is that what you're hearing? - Yeah, yeah, so in my June newsletter for funding education opportunity, I looked at some school districts across the nation and I just wanted to see which school districts were laying off students, laying off teachers or just staff really. And there were some pretty big numbers, Milwaukee Public Schools, they're proposing laying off 300 staff members, Acre and Public Schools in Ohio, it's 285. And it's not just sort of like middle America either. You see on the coasts, DC and Connecticut are proposing laying off about 110 staff members. So those are some substantial numbers and there are really three things fueling this phenomenon. That's the expiration of the federal COVID relief funds, which were about 190 billion, billion, not billion, billion dollars, some pretty bad financial decisions by school districts and declining enrollments. - And inflation, right? So that's-- - Yes, yeah, and inflation too. - Yeah, it kinda happens simultaneously and I know that our colleague over the 74, Chad Alderman, he did an estimate. So I wanted to say, I looked at the numbers this morning in Missouri. Pre-COVID 2019 to post COVID 2023, we lost over 21,000 students and we hired over 1,300 teachers. So that's the pattern, right? Like even at, because there was so much federal money, even as enrollment was declining and it's been declining for a decade in Missouri, they just made decisions to hire teachers and those are expensive decisions, right? - Yeah, yeah, when you're hiring new staff, that's a recurring cost. So the federal funds were temporary. They're set to expire this September. So that's why a lot of school districts right now are, you know, they're facing the music for their financial decisions because if they did not budget for those new recurring costs in their state and local dollars, you know, they're a really tough situation all of a sudden. And to make matters worse, you know, when, you know, we had $190 billion come in to the States and just, you know, you might have already talked to this with your, spoken about this with your listeners, but just a quick recap there. Those are three packages. You have the CARES Act in 2020, the CRRSA Act in 2020, both of those were under the Trump administration and then you had the American Rescue Plan in 2021 under the Biden administration. Now, that last plan was a new $123 billion send. There's some education researchers that say that the initial two packages were enough to reopen schools. We didn't need another $123 billion to be sent to school districts. - Yeah, I mean, that seems to be the one that put them over the top. The Missouri portion of that was 1.9 billion. It came in and they were directed, the state was directed to just send it right out the district. So they were given percentages to send it out. Districts got it, whether they said they needed it, what, you know, they just got this money. And I think a lot of districts didn't know what to do with it. - Yeah, no, I think that's true. I mean, it was a, it was an unprecedented sum. The last largest amount was sent out by the Obama administration in 2009 after the Great Recession and the amount that these three packages, it was more, it was more than double that amount. And more than three times the amount of just federal K-12 funding for the 2020 school year alone. So it was a massive increase in money and school districts sometimes just didn't know what to do with it. - Yeah. - As we mentioned earlier, inflation was playing a role here as well. So they had, they got all this money and then all these dollars flooded the market. And so it wasn't like state and local policymakers were unaware of the fact that school districts might need a little extra money during this time because they were increasing funding. We saw that non-federal funding grew by about $1,500 per student between 2020 and 2022. But because of this inflation, it wasn't only due to the federal funds going into education, but it was certainly played a part of that increase only amounted to about a $55 increase per student when you adjust for a foot inflation. - Yeah, that's right. And so like Missouri, they're saying basically, because of that, the Missouri state taxpayers, you know, that our governor is going to have to call a special session there, he's going to have to do according to our, the president of our board of education, the mother of all supplemental budgets, because we can't fall off this cliff. We have to have new sources of funding. Even though separately all of our districts made these decisions to keep hiring teachers, we are up over 400 in superintendents and superintendents staff, you know, we're up 200 in principles and principal staffs. Those decisions, when you make them, you know, now, I started to say this, but our colleague chat Alderman estimated that if we just went back to teacher-student ratios from before the pandemic from 2019, we would have to lay off, what, 384,000 teachers? I mean, that's, those are the decisions that were made partly because of that federal money. - Yeah, absolutely. And it's just me, that's just mind boggling to me. I knew there were, like, there were new hires, but when I saw that figure is why my jaw just dropped. (laughs) - Yeah, and then, then the other pain point in, we feel a lot in St. Louis is closing schools, like actually closing schools, which is extremely unpopular, but we have some incredibly under enrolled schools. And this is something else that you talk about a lot, but we're very resistant to public school open enrollment, like we're very, very resistant. And yet, I wonder if this isn't gonna start, like within the bulk school system, within superintendent's office saying, you know, maybe might not be the worst idea if we could pull students for other districts, what do you think? - Oh, I absolutely agree. There are school districts across the nation that use open enrollment to attract new students to build to bolster their enrollments. You see that in California. And it's not as though this is, while open enrollment is often used by urban and suburban districts, or students into those districts most, we see rural districts use them as well. Wisconsin actually, it's one of the most common forms of school choice, lots of families use open enrollment to transfer to rural schools. And you'd like to be for a variety of reasons. Maybe it's shortening families, overall commutes, maybe it's just a better fit for that student. - Yeah. - So there are a variety of reasons why families use it. And I'm sorry, I didn't mean to cut you off here, but to round that point off, I think a good point of how open enrollment can really help students in schools that are closing in Utah, which has a really robust open enrollment program. The governor signed a bill that ensured that students assigned to schools that were scheduled for permanent closures could choose their new public schools. So instead of just reassigning these families to whatever public school the district decides to reassign them to, we should give them at least give them some agency. - Yeah. - So that they can make a choice in their children's education. - Yeah, that's a great idea. 'Cause I think lots of times you see these committees are formed and they're like, okay, we're gonna close this one. We're gonna send all these addresses over here or when we send all the people just don't like it, right? And their kids might get separated from their friends. They just don't like it. So that's a good idea in terms of like giving families agency in it for sure. And so the two painful things that are firing teachers and closing schools, there are ways, as you say in your newsletter to go about it in a way that maybe creates some good, like through open enrollment or through letting parents have closed, potentially closed schools to choose the next school. And our legislature's taken it up in the last couple of years, not as much last year, but the year before we thought we might get open enrollment. And while that was happening, Kansas put in place a very, very strong program, which is right, you know, Missouri and Kansas compete on a lot of things right now, mostly sports stadiums, but we also compete on, you know, parents can easily move from Missouri to Kansas. And Kansas has a very strong, one of the best, is that right? Yeah, they have a very robust open enrollment program. It actually goes into effect for the first time that's coming school year. So we'll actually get some real data on how it's operational. But on the books, it's a great log of books from what we can see. They have really good, you know, basically their law says families can go to any public school with open seats, whether it's inside their district or outside their district. So there's no limitations on where families live really. There's great transparency components to it where school districts have to be clear to families about how many seats are available by grade level. They have to post this information on their websites and they're just like really elementary things that are gonna matter to parents, like how do I apply to this program? That sort of thing just needs to be on a district's website. And then the state's also gonna collect some robust data on how many transfers are happening, how many applicants have rejected and why are these applicants rejected? The sort of data is gonna be collected by the state and they'll publish that anymore. Oh, and I almost forgot, families can't be, like they can't be charged tuition. So there's some public schools or some states that permit-- - Those are AS1, yeah. - Yeah, permit transfer students be charged tuition and that doesn't happen to Kansas. So Kansas has got a pretty good program. We're pretty impressed by it. - So maybe where we're headed is, we'll have more schools competing for fewer students and maybe everyone wins. But right now, I think we're gonna go through a very painful couple of years. Would you anticipate that? - Yeah, I think so. I mean, there's just so many things coming to add. You know, you have, like we've talked about the federal funds expiring, the inflation, but there's also this other component where enrollments are just lower now. This is for a variety of factors. Part of which is that families got really frustrated during the pandemic when schools remained closed for a really long time. And as a result, policy makers, you know, school districts don't really have to answer to parents. And in some ways they do, but they're not elected officials. Elected officials realized families were getting frustrated in response to that. Across the nation saw so many school choice programs explode and families wanted choices. And so they found these other alternatives. And so if you remember, I think that was, it was AI that published the Return to Learn Tracker. And it was like during the, I'm trying to remember the exact year. It was yes, 2020 and during the 2020-2021 school year, public schools lost 1.3 million students. That's not a small sum. - Yeah. - And in many cases, I think a lot of school staff were like, okay, you know, keep our homeschooling temporary at the end. This is going to bounce back. But the thing is it really has, there's been some minor, like some students have returned, but not at the rate, I think public school administrators weren't expecting them to. Instead, what we've seen is that the latest projections for public school enrollments are dropping. So the National Center for Education Statistics recently released some projections which showed that there will be four million fewer students in public schools as of 2031 than in 2019. That's massive. And again, there's a couple reasons for that. You've got things like private school choice, charter schools, homeschooling that, families engaged with these alternative education options. During the pandemic, and they might have decided that they liked them and they enjoy having some agency of their families in their students' education. So that's certainly part of it. I also think some families that might have been a little more friendly towards public schools beforehand might be more interested in taking advantage of those opportunities as well because public schools really blew a massive PR opportunity during the pandemic when they kept schools closed for so long and families just felt like they were just stuck. They had no room at the bargaining table and then there were no agency other students' education. So that's definitely part of it. But I think the other components there's the declining birth rate. So for a long time, we've relied on immigrant birth rates to bolster the declining U.S. birth rate. But since the Great Recession, the immigrant birth rates have also declined. And so in some ways school districts were shocked when to see that moment's declining because they sort of saw the writing on the wall and they're like, okay, this is going to be happening. But during the pandemic, it accelerated the decline in moments significantly far faster than they anticipated. If I remember correctly, a couple of years ago, I was looking at it and killing sides. St. Paul, Minnesota school district and they were, their pandemic enrollments were what they were projected to have in like five years. So like shamed off five years in their enrollment projections. And you know, they're obviously scrambling 'cause that was not good for them. - Yeah. - And what you were saying too about NCES doing their enrollment projections, they always project out eight, I don't know, seven to eight years. And they've had like their 20, 28 projection is lower than their 20, 28 projection used to be, right? Like the curve is going down. Like they were projecting as a climb but the new projections keep like moving it down again. So there's an article in the Wall Street Journal today about why people aren't having kids. When I talk about it in Missouri 'cause our biggest kindergarten cohort is 2013 and we've been just steadily declining. People are like, where is everyone going? And I'm like, I think they're maybe just not being born. I don't think they're moving out of Missouri necessarily. They're just not being born. And at the same time, we have districts even declining enrollment districts that are looking to buy land or do bond issues to build buildings and they are certainly hiring teachers. And I just think there's just long-term implications of that that people have not accounted for. And then we hear this, it's a fiscal cliff and it's like, no, no, no, this, if you had paid attention, you could have seen it coming. I know like the edu-nomics lab at Georgetown four years ago was like, don't fill vacant positions. Do program evaluations to see if things are working or not. Don't start new programs like I think District in Ohio and it was Columbus made their after-school program free. And now parents are gonna have to start paying for it to get like those kind of things. They cause a lot of pain and that maybe some of that could have been avoided. - Yeah, yeah, I think you're spot on there. I mean, there are some like smart ways to spend money like one-time bonuses on targeted teachers. So like if you like need science teachers or specialists or a special ed teachers, you know, yeah, give them a one-time signing bonus upfront. But don't, don't, creating permanent raises. - Right. - You know, like you said, like you mentioned, new hires for new positions, that's just a recipe for a disaster. - Yeah. - And I'm looking at the numbers here. And I think it was, you know, maybe like around 60, like 40 to 60% went to labor. It's a little unclear, labor is like a big category. - Yeah. - So it's not necessarily teachers, it could be guidance counselors or social workers. And then another 20 to 30% - So you're saying of the pandemic funds, of the COVID relief funds, 40 to 50% were used on labor? - Yeah, labor costs of some sorts. That means raises, it can mean bonuses. So it's like good spending, it could also be bad spending. - Right, right. - But then, you know, another 20, 30% went to facilities. And then there's just a bunch of other expenses, things like technology, curriculum, professional development. - Right, I'm supposed to be learning loss. And I think a lot of districts are like, well, learning loss, we need more teachers. - Yeah. - I mean, so what are your plans going forward for like how are you planning on studying this as it transpires over the next couple of years? And what do you think we should be looking for? - Yeah, yeah. Well, I mean, I think one thing we're really gonna be following closely is just the learning loss. - Yeah. - Which is really unfortunate. And only 37% of public schools used relief funding for high dosage tutoring. And that's not just tutoring, that's a very specific type of tutoring. And it's a big investment, not just on the part of schools, but also families. And unfortunately, sometimes families were so burnt out, they weren't always willing to, you know, keep their kid in school longer, no, beyond the usual school day. - Yeah. - And it really impacted students negatively, try to remember. - Oh my goodness, like cracking staff, right? I guess in the next few years, we'll see what they did. - Yeah, we'll also see that. - You know, if teacher, student ratios, which only seem to go down in Missouri, just there's this now below 13 for the first time. I mean-- - Oh wow. - You should be in the 20s, now we're at like 12.8. And it's like, I understand why teachers likes smaller classrooms, but I think that, maybe we'll see those tick back up in the next couple of years, I don't know. - I mean, it, yeah, smaller teachers certainly enjoy a smaller classrooms. I'm a former teacher myself. - Yeah, yeah, yeah. - I definitely enjoy my smaller classrooms that, you know, when I had, you know, 15 kids in a classroom, that's close to my classrooms at 30. But at the end of the day, school districts can't afford to operate schools that are only half full. It's just not a viable option. It's not, you know, maybe it's easier for the teachers, but it's not fair to the American taxpayer that has to write up that tab. - Right. Well, it's interesting stuff. I mean, I know that we're gonna be hearing about it a lot in Missouri, and I know that School Funding Form is in general, which is what the recent foundation does a lot of work around. I think we are gonna, I hope we are going to begin to pick up that topic and dip some toes in the water 'cause our formulas to 20 years old. But I think all of these things coming together with a decline in funds, with a decline in students, with the need for better targeting of funds, I kind of hope that that is one result that happens at least in Missouri. But if people wanna find out more, find your newsletter, where can they find it? - Yeah, they can sign up at reason.org. If you go to the education section, there should be an option to sign up for it there. - Well, I appreciate you coming to talk to me about it. I feel like I'm a doom and gloom all the time, but I'm really just realist. I really just like, I get it. It's gonna be painful, but we've been spending a lot in the last few years. So I appreciate you coming to talk to us about it. - Oh, thank you so much for having me. It was great to be back. (upbeat music) (upbeat music) (upbeat music) (upbeat music)