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Declining School Enrollment and Future Prospects

In many areas of California, K-12 school enrollment fell drastically over the past three years, continuing a trend which fiscal analysts projected more than a decade ago. Since 2014, when K-12 enrollment in the state numbered 6.3 million, the student population fell below 6 million in 2021. By 2030, it is projected to fall below 5.5 million, a drop of 14.5%. The COVID-19 pandemic has accelerated the enrollment decrease, but the general downward pattern reflects California’s population characteristics, rather than a short-term blip.

Counties with the largest projected enrollment declines include the most populous areas of the state, from San Diego, Orange, Los Angeles and Ventura in the south; Monterey, Santa Cruz, Santa Clara, San Mateo, San Francisco, Marin, Sonoma and Napa in central and northern California.

While COVID did create a classroom exodus, there are larger factors driving this enrollment trend. California has the largest population in the nation, but it is growing much more slowly than it did forty years ago. In the decade 1980-90, the state’s population grew by 25%, but by 2010-20 growth was down to less than 6%.

Families are also having fewer children. According to the California Department of Finance, in 1990, California’s total fertility rate was 2.49, but only 1.68 in 2020 with a continuing gradual decline through 2040. The “replacement rate” required to maintain a stable population is 2.1. So, any future influx of more students will depend on families who move into the state. Indeed, immigration and migration to and from the state are additional variables we expect to impact school enrollment in the future. When we look at the last ten years, a net of 1.2 million people moved away from the state.

These trends present significant implications for California public schools and the way the state provides funding. School districts are already making adjustments to the ongoing enrollment decreases. State budget provisions to compensate for lower Average Daily Attendance (ADA) and a strong economy have helped districts to adapt. The state currently provides a funding adjustment to districts with declining enrollment. Maintaining school staffing levels and district fixed expenses will require the Budget to spend even larger amounts to make up for the enrollment decreases.

Under the current circumstances, even with lower enrollment, districts may be receiving more funding per pupil. Economic growth and the funding formula under Proposition 98 may allow the Legislature to improve the funding per ADA for the next several years, giving local school districts needed budget relief for the time being. The 2022-23 Budget is not yet finalized and expectations for K-12 funding could change depending on the Governor’s May Revision. We will continue monitoring these Budget developments and provide additional updates as warranted.

However, the population trends for the state are apparently persistent, with little to indicate a future rebound of ADA into the middle of the 21st century. Long term planning at the district level, along with counties and state collaboration, will be critical to California’s educational vitality. In addition to fiscal considerations, solutions relating to staffing, pensions, health and welfare benefits, and risk management will be necessary to assist schools with ongoing expense pressures.

About Kyle McKibbin
Kyle McKibbin has been with AP Keenan since 2013. In his position as an Assistant Vice President, Kyle is responsible for day-to-day service and policy administration for K12 public school districts in Northern California.