Lawmakers and education officials in a few states, including California, are seeking changes to school funding formulas to avoid financial harm to districts from pandemic-related drops in student attendance rates.

States currently calculate funding allocations in a variety of complicated ways using attendance and enrollment counts, or both, and changing student funding formulas often requires legislative approval.

Favoring current school-year averages of student enrollments rather than one-day attendance counts could increase state flow-through funds to local districts and help with more accurate budget planning, school funding experts say.

Declining student attendance rates during the pandemic are raising concerns among education officials that district coffers will shrink significantly once federal emergency funding is spent and if attendance rates don’t rebound, according to a report by K-12 Dive.

What’s happening in California?

A bill in the California legislature from state Sen. Anthony Portantino would change the state’s funding formula, starting with the 2023-24 school year, to one favoring total enrollment that factors in how many students are enrolled in a district. The current formula uses average daily attendance (ADA), which includes how many students are present on campuses during a specific time period. Proponents say the adjustment would benefit districts with higher absenteeism rates.

Research from CASBO Premier Partner School Innovations & Achievement (SI&A), which provides programs to districts to reduce school absenteeism, found 17 California districts experienced a chronic absentee rate of 27.4% in October 2021, up from 18% in October 2020 and 11.2% in October 2019. Black and Latino students experienced higher rates compared to white and Asian students.

Approaches vary

Approaches to calculating funding based on enrollment or attendance vary state-to-state, according to research from the Education Commission of the States, which shows six states use attendance averages to allocate funds: California, Idaho, Kentucky, Mississippi, Missouri and Texas.

Earlier in the pandemic, several states eased requirements around enrollment or attendance counts for funding purposes in light of pandemic-related absences, allowing districts to use historical student or projected attendance counts. For example, the Texas Education Agency enacted an ADA hold harmless policy last school year but has not provided the same flexibility this school year, as in-person attendance was initially holding steady.

Have attendance-based models run their course?

Some education finance experts have said funding schools based on attendance was outdated prior to the pandemic. The forced move to virtual learning only highlighted the problems with these calculations when “student attendance” in remote settings brought different interpretations.

The financial declines could be dramatic if a district experiences a steep enrollment drop. The Urban Institute estimates if a 1,000-student district with a $15 million budget lost 200 students between the 2019-20 and 2020-21 school years, its budget for 2021-22 would decrease by $3 million, or from $15,000 per student in 2019-20 to $12,000 per student in 2021-22.

Still, others say tying funding to attendance keeps school systems accountable not only fiscally, but also with student engagement and learning, because students would actually need to be on campus to be counted for funding.

Enrollment and attendance counts are just one part of the state-to-district funding calculation, as other factors influence total allocations. States are continuously looking at adjustments to funding formulas and how those decisions affect a district’s budget.

South Carolina Gov. Henry McMaster is planning to propose funding formula changes based on student-teacher ratios that would increase funding for special education, which also receives dedicated federal funding, according to the Associated Press.

Vermont is considering a change to its funding formula based on student enrollment that would provide higher per-student allocations for students from low-income households and other populations.

CASBO and SI&A will be conducting a WorkWise Webinar on Thursday, February 17, from 10:00 to 11:00 a.m., on “Leveraging Attendance Data to Engage Students.” Watch your inbox or visit this page for details on how to register later this week.