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Student enrollment dips during pandemic mean Texas schools will lose millions without state policy change

Districts could be losing about $200 million in funds to educate children living in poverty.

Every day, the Richardson school district dispatches staff to track down missing students who never logged on or showed up for the fall semester. They knock on doors, call family members and visit locations around the area where students have been spotted.

Even with these efforts, about 1,900 students are unaccounted for — that’s the equivalent of the enrollment at three junior high schools.

In Texas, where funding is based on the number of students who show up for class each day, the 1,900 missing students mean Richardson ISD could lose $10.4 million in state funds.

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State education officials saw the potential for widespread enrollment declines when the public health crisis continued this summer and plans for in-person instruction remained uncertain. As a result, the Texas Education Agency gave school districts a hold-harmless period where funding would remain steady based on previous years' enrollment.

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But that grace period is almost up. Now educators worry that schools will lose millions because of the enrollment decline. The total impact is hard to quantify because student numbers continue to fluctuate as public health conditions change.

Making the potential loss greater, the hold-harmless period does not hold steady funding for Texas' poorest students. As a result, schools stand to lose about $200 million, according to estimates.

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“This could all snowball,” particularly if enrollment worsens, said Christy Rome, the executive director of the Texas School Coalition.

(DMN)

The grace period was initially scheduled to last for 12 weeks, theoretically giving districts time to track down missing students and get their finances in order. On Oct. 1, TEA extended this period by another six weeks, covering many districts for the entirety of the fall semester.

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But even with additional time, school leaders dread the end of the grace period. Texas doesn’t have an official number for how many students did not return this fall. Based on data released on the state’s COVID-19 dashboard, the nonprofit Texas 2036 estimates about 250,000 — or 4% — of the state’s students are missing.

In Dallas ISD, enrollment loss is close to 4%, said Dwayne Thompson, the district’s chief business officer. If the grace period does end after 18 weeks as expected, Dallas ISD would see cuts of at least $20 million this spring. The funding loss could be even steeper if attendance dips, a constant worry during a pandemic.

The district will handle the loss by pulling money from reserves, not by cutting employees. But DISD may have to consider class size increases and adjust other staffing in the future if funding doesn’t stabilize.

“We’re just merely looking at how we can limit the loss for this year and then look at our student population for next year and staff accordingly,” he said.

Richardson officials stressed that the work of educators isn’t getting any cheaper. Educating students at home and in person is costly, and there’s even more added expenses from supplying appropriate personal protective equipment and technology.

“We staffed a certain number of teachers for a certain number of students, and we didn’t have a prediction then that we would have a loss of enrollment,” RISD Superintendent Jeannie Stone said. “Our only way to address that or to make those [numbers] balance would be to lay off, to break our commitment and contract to our teachers.”

No one wants to do that, Stone emphasized. That’s why the state needs to extend the grace period for funding at least until the end of the current fiscal year, she said. The superintendent pointed to a state surplus from the 2019-20 school year that could be used to help keep districts financially viable until enrollment stabilizes once the pandemic wanes.

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“Our conversations with the state have been driving back to the fact that the money exists and this is not a time to be talking about cutting funds to public education, where the needs are so great,” Stone said.

After a historic 2019 legislative session, when lawmakers invested billions in public schools, district leaders across Texas say they don’t want to lose any ground.

Missing funding for students in poverty

When legislators last met in Austin, they passed a landmark school finance package that increased funding for Texas students. One element of the bill, which many educators believe to be its crowning achievement, gave districts more money to educate students living in low-income communities, an average of about $1,500 per student.

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Districts use these funds in a number of ways, including to provide greater wraparound supports that address student needs outside the classroom, such as mental health or food insecurity.

Investing in what lawmakers call the “compensatory education” weight was a recognition that money matters when educating students whose families are struggling financially, said Brian Woods, the president of the Texas Association of School Administrators.

“The whole conversation we had was: We’re not adequately recognizing the challenges of educating a student who lives in poverty to the same efficacy, the same degree, the same success as a student who doesn’t experience poverty,” Woods said.

But in TEA’s grace period, the compensatory education weight isn’t included. If districts are missing students who qualify for compensatory education funding, that money isn’t available.

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Complicating the issue further, school leaders were up against an Oct. 30 deadline to get students eligible for the funding enrolled. If students from low-income families enroll now, districts aren’t eligible to draw the related compensatory education funding for them.

The exclusion of compensatory funding in the grace period could mean school systems across the state will lose $200 million, Rome said. And there’s no avenue to reclaim that funding at this time, she added.

Meanwhile, the public health crisis has worsened the living conditions and economic outlook for many Texas families, educators say.

So the funding loss will especially hurt districts with the highest number of students living in poverty — including Dallas, Fort Worth and Irving, where at least 80% of students are considered economically disadvantaged.

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“Students in poverty are more costly to educate,” Rome said. “You’re making up for gaps that may exist and especially for districts that are serving a high concentration of students in poverty, it’s just more costly.”

School leaders believe TEA has the power to address the funding problem now, by extending the grace period and including the compensatory education funding weight.

Superintendents have been in communication with Texas Commissioner of Education Mike Morath on the subject and hope for a reversal. This summer, the agency was a prolific updater of its own COVID-19 guidance for schools as needs shifted.

While an extended grace period isn’t currently in the agency’s plans, it is possible the directions will continue to evolve should districts' financial needs necessitate it, TEA officials said.

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Thompson said DISD officials spoke with lawmakers in preparation for the coming legislative session that begins in January, but those leaders believe this to be an agency change, not a legislative one.

Rome agreed. She said it is unlikely that lawmakers could replenish the missing compensatory education funds in the near-term when the money is most needed. Passing complex school funding bills typically takes months — if it happens at all — during a legislative session.

“We want to be able to give schools, students and families assurance of what is going to continue to happen in the schools and classrooms they are attending right now,” Rome said. "I haven’t seen a whole lot of legislative sessions where they have passed legislation in January.

“These are unprecedented times, so perhaps this is the moment when that will happen. We are hopeful they will help as quickly as they can.”

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The DMN Education Lab deepens the coverage and conversation about urgent education issues critical to the future of North Texas.

The DMN Education Lab is a community-funded journalism initiative, with support from The Beck Group, Bobby and Lottye Lyle, The Communities Foundation of Texas, The Dallas Foundation, Dallas Regional Chamber, Deedie Rose, The Meadows Foundation, Solutions Journalism Network, Southern Methodist University and Todd A. Williams Family Foundation. The Dallas Morning News retains full editorial control of the Education Lab’s journalism.