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- [00:02]
A
You're listening to ASBO International's School Business Insider. I'm your host, John Brucato. Each week on School Business Insider, I sit down with school business officials and industry experts from around the world to share their stories and explore the topics that matter most to you. Find out what it means to be a school business official and get your insider pass on all things school business. Hello everyone, and welcome back to School Business Insider. In today's episode, we explore what school leaders should do when enrollment declines and doesn't come back. Our guest, Dr. Marguerite Rosa, Director of Edenomics Lab at Georgetown University, joins us to unpack the implications of the big shrink, a term she coined to describe the long term structural decline in public school enrollment. We discuss how districts can confront this challenge not just with cuts, but with strategy, rethinking staffing models, realigning programs, and reframing the narrative around enrollment loss. It's a timely conversation for school finance and operations leaders preparing for a future with fewer students and higher expectations. Dr. Rosa, welcome to School Business Insider. I'm happy to have you.
- [01:21]
B
Thank you for having me. I'm glad to be here.
- [01:24]
A
Absolutely. So let's dive right into it. I had mentioned that the article that you authored on School Business now really referenced the big shrink. And can you tell our audience, really, what did you mean by that term and why is that trend gaining urgency for school districts in this current moment?
- [01:43]
B
Yeah, the big shrink means I was talking about the district districts. They're going to get smaller, Right. And they're going to get smaller because they're going to have fewer students. But shrinking a district isn't something that districts know how to do naturally. They know how to grow. You hire more people. And mostly, if you look over decades, not always, but for the most part, systems like to grow. They don't know necessarily how to shrink. And we do know enough about school districts where they've lost enrollment to know that it's really hard for them. And so looking ahead, not every district, but across the country, the predominant direction is going to be one of shrinking. And that's what we mean. So districts are going to be smaller, they're going to have fewer staff, they're going to have fewer programs and so on, and they're going to potentially have smaller budgets, certainly not a budget that can continue to grow like has been the norm for the last decade or so.
- [02:44]
A
Sure. And is this, is this a novel problem for school districts, or have his history shown that enrollment has shrunk and districts had to shrink in in conjunction with that or is this something that is kind of new to this day and age? Or is it maybe a little bit more acute of a problem in recent history?
- [03:06]
B
Full disclosure. I wrote an article about districts shrinking like two decades ago. And so much of it is the same now. But at the time it was not all districts. It was like big city districts were shrinking. You heard about Philadelphia and places like that that were shrinking. And that has been a pattern for big city districts. They shrink and they grow and they shrink and they grow. And cities were on the decline a couple of decades ago, but then had kind of a comeback era. If you think like 10 years ago, cities were thriving and families were moving back to them and a lot of industries were growing in cities. For the most part, the tech industries tended to be in cities. But what's different now is that the whole US national system is going to shrink. It's not like here's a district where they lost kids because they moved to the suburbs or they move from one. An industry collapsed in kind of the Rust Belt and they move somewhere else. This is really not every community, but nationwide we're losing about a half a million students a year. And that's going to add up and have really big repercussions for a lot of districts. Some places are sort of about, I think it's yes, about a half a percent a year. And so for some districts, that's going to be more like 2% a year or more than that. Some are already even faster than that. So we're just going to see a lot more districts in this position this time.
- [04:44]
A
So in your example of city districts kind of oscillating and increasing in enrollment and decreasing, it sounds like that was more of kind of an overall net shift of, of enrollment kind of back and forth. The city district, suburbs and maybe rural schools. It sounds like what you're saying now is that nationwide there's a net overall decrease. So all districts are going to have to respond in some way accordingly.
- [05:09]
B
Well, not all, because in some communities they're seeing population growth. So Tennessee and some states there's out migration from California, but there's in migration to places like Idaho. So it may not be every, but across the nation it's a population decline for school age children. And that is the biggest factor is declining birth rates. And so families have for the last several years and look like they will continue to have fewer children and fewer children being born. There's no amount of advertising that can get the kids who were never born to come to school. So we also, that is compounded. So really when you see that show up in a school district's enrollment in kindergarten, first and second grade, right, if your 10th, 11th, 12th grade is quite a bit more students than your kindergarten, first and second, that is birth rates. That's what's going on right there. If your population is down across the board, it's probably some sort of outmigration. Families are leaving your area. And then the other issue that we're seeing is that the border is much tighter now. So we are not seeing. We were seeing about a half a million kids come in from other countries that was offsetting the decline in birth rates. It shows up in districts when they count their ELL students. So they would notice, oh, look at that, we got more ELL students this year. Well, that for some was papering over the fact that they were seeing a decline in enrollment from local kids. And so with now no more influx in kids from other countries, you're really feeling that decline in birth rates. Some places, you know, you also have kids are moving out of the cities or because of the high cost of living, and some are all of the above. So we think of like the larger Los Angeles area as experiencing all of those factors at once.
- [07:06]
A
What about school choice? We've had a couple episodes on School Business Insider talking about really the pain points surrounding school choice for public schools. Has that been pushing students out of public schools into private schools or charters or other things like that?
- [07:23]
B
Well, that's definitely going to be more of a factor. It's already a factor in places like Florida and Arizona where there are more substantial state funded choice programs at play. California does not have a state funded choice. They do have charter schools, but those have been around for a long time. So they're not new. But in 2027, a provision of obbbba, the one big beautiful bill, kicks in where taxpayers can donate a portion of their tax funds to scholarship funds for kids to go to private schools and potentially other things. But that could really also begin to accelerate the decline in population in public schools, depending on how that gets implemented. And governors will have a choice on whether or not their state opts in. So we've already heard from, I think, three states that they don't plan to opt in and two states that they do plan to opt in. But really I think those decisions will firm up when there's clarity around how this bill's regulations take place. But in some states, I anticipate that that will accelerate some enrollment declines as well.
- [08:41]
A
So something that's compounding declining birth rates, you know, really putting more pressure on public schools to rethink their budgets, rethink their staffing in years to come.
- [08:53]
B
That's right. That's right.
- [08:55]
A
I recently read in Chalk Beach, Chicago, just as a really relevant, timely example, that the Chicago Public Schools reported losing about 12,000 students. Just this. What does a drop like that mean for district operations and finances? I mean, it's a massive school district, and 12,000 students is a lot. What does that mean for a district like that?
- [09:18]
B
Well, so school districts are funded based on the number of kids they have. So obviously, a school district with 20,000 kids has a lot more money than a school district with a thousand kids. Right? So they have run more schools, they have more teachers, they have more bus drivers, more lunch workers, they have more custodians and more reading coaches, more kids with disabilities, more speech therapists. It's all of it. Right? And they'll even have more, a bigger HR team to do hiring and training and everything else. But when districts start to shrink, they need less of everything, but they don't necessarily have a clear path to start letting go of those things. So if you, if you're Chicago Public Schools and you've lost 12,000 kids, not all of your money is tied per student, but some of it is. And Miami is another one that just opened the school year with many fewer kids than they expected. And if you think of every student bringing something in the neighborhood of another $10,000, then, then essentially pretty soon, that adds up to the hundreds of millions of dollars that you're adjusting out of your budget that year. And if not the first year, then the second year. Right, because once they're gone, they generally don't just pop right back in. And at that point, you've either had some sort of protected money from the state or something, but eventually all the funding starts catching up. And otherwise, if it doesn't, your per pupil costs go through the roof and you start to look really, really expensive. So there are school districts right now that are looking at their counts. We were saying about the most important number a district could look at right now is its fall enrollment. So go out there and count the kids. How many ELL kids do you have? How many in kindergarten, first grade, et cetera? And how is that different from what your projections were? Because this is the truth teller. This is. This is the number that really will matter for what your future financials look like.
- [11:24]
A
And I think another challenge that plays into that is when school districts see a decline in enrollment, you're not seeing a second grade class decline at once. You're seeing a couple kids in elementary, a couple in middle school, a couple at high school. So from a staffing perspective, it's challenging to eliminate a section in this hypothetical example because the kids aren't all leaving one grade or one building at once. So being able to attribute decline enrollment to a direct correlation to a reduction in FTE doesn't seem to be as straight of a line. Are you seeing districts kind of struggle with that and second to that struggle articulating that to the communities?
- [12:05]
B
Yeah, I think on the one hand, part of this is when we grew, we added more kids and added more classroom. So even if we had, let's say 35 kids in a grade, suddenly we're like, should we hire another teacher? Should we go ahead and do that? I mean, the same thing happens the other direction, right? Should we let go of a teacher, consolidate these grades? I think should we close a school and consolidate these schools? And then we only need one principal, we only need one librarian, we only need one PE teacher. And maybe the that way we can fill two second grade classrooms instead of having two half empty classrooms at both schools or something like that. So that's what it looks like when you start to do that proactively. I think the other thing that school districts did as they grew is they added a middle layer of staff. They added more assistant principals, more counselors, more reading coaches, more specialists, et cetera. And they think, well, just because they last 25 kids, how am I supposed to let go of my specialist? But they did used to live without the specialist. Those are things that they did as it got bigger. And so part of this is being honest with what we have and maybe changing the roles of our team back. Maybe the school isn't big enough to warrant an assistant principal or a full time counselor or any of those things. So that is how schools shrink. I mean, they can shrink and not close schools stay separate, but probably people, their roles are going to be different. It's not going to be, you have a one per school staff of everything. Maybe the PE teacher is going to also be the math teacher, or the counselor is also going to be the Spanish teacher, or the principal is going to teach a math class or whatever it is. But a lot of times people are like, well, we're used to all our specialty positions and now we have fewer kids to sustain them. And they haven't let go of the idea that that staffing model went with a much larger student population.
- [14:12]
A
Right. Are you seeing School districts maybe talk about merging with other districts. New York, New Jersey, Illinois. They come to mind because there are so many local districts, unlike other states that have county wide districts. Are you seeing that as an option on the table to merge and combine resources?
- [14:32]
B
Districts will not do that willingly. Well, school districts, their school boards, their superintendents are not interested in joining with the next district over and merging their football teams and everything else. If it's up to the district, you're much more likely to see them share services. So hey, we'll share an HR director, we'll share a speech therapist, we'll even let our kids join for a football team. But we will still want to have our separate schools that answer to our separate elected school boards. But some state leaders are on a press for merging school districts. We've been hearing a little bit about this and often when the state funds each district at some sort of minimum level, the state says, well, gee, if we merge some, the state can save some money. But, but if the state says, and not every state does, that some states just fund how many kids they have, in which case there's no state savings. If they merge them, you're still funding however many kids you have in that case. What we tend to see is that districts are more likely to share services. They're not against that. We got an AP computer science teacher, they'll teach one class in our district and one in your district or we'll, we'll have it online for some of the kids on some of the days, etc.
- [15:51]
A
Yeah, being in New York myself, I mean the state education department has really been trying to incentivize districts to consider and go through with merging. There's a lot of money on the table to that are designated as like merging funds that schools could take advantage of that could really kind of transform what they're doing. But, but to your point, many districts, most districts don't have the appetite to do that. It's a very political process. There's a lot of pride in individual school districts. Even if it's a, a district of 200 kids, you know, we're not going to change our mascot. So I mean there's, there's a lot that goes into it. But when you look at it from a financial sense, it, it just makes a, a lot of financial sense to maybe consider that or maybe move forward with it. But there's just, it's so much, there's.
- [16:34]
B
So much more emotion attached to it. I think the state, if the state said fine, I'm funding every kid at $15,000 a kid. Be small or merge, do whatever you want. It doesn't actually matter financially for the state. But if the state has said, I'm giving every district $300,000 for a superintendent and another X amount of dollars for a counselor and an X amount of dollars for a class at each elementary grade, if they've funded the stuff that goes in schools, well then of course you need more, more stuff if you have more schools and districts. And so suddenly the state says, gee, it would be great if you merged. But not every state does that. Some of them just fund the kids, in which case there's no incentive at the state level for them to merge or not. And that decision is really left locally, like can we be viable on our own numbers? And where that happens, then we see very different looking schools. So we see small schools where they are doing an online class for some of their electives, or they're partnering with the YMCA across the street for some of their sports facilities because they're too small to sort of be financially viable in that sense. So I sent my own kids to a school, a rural school that looked like that very small school district. I think it has 400 kids in the whole district right now. But if you take a page from charter schools, many of them are freestanding LEAs in the sense that they get paid for how many kids they have. They might have 300 kids and they operate a viable school which effectively looks like a mini district without any sort of sharing. Now the other thing about charter schools, many of them have opted to share some services, often financial services, some of the HR background stuff, sometimes a collective effort to file paperwork with the state, all those kinds of things, do audits and even purchase special ed services. And so when you think about that, that's what it looks like when it's naturally done to a school district versus being done through legislative policy.
- [18:46]
A
Right. So let's not turn to districts and how they're responding, particularly when it comes to staffing. Know 80 to 90% of budgets go to labor. It's a huge piece of school district finances and having to fund that expense. Can you tell me why reducing staff is so difficult for district leaders, even as you say, as enrollment is dropping so rapidly.
- [19:08]
B
Education more than any industry I can think of, we have this kind of mindset where you bring an employee on and then they are an employee until at some time in the future that they choose to leave. And so not that we sort of control, we meaning the leaders in the system, control the size of our labor force. It's more like, well, they work here like they almost have an entitlement or some sort of right to that job. And I think some of that's good because we don't want a random revolving door of staff in our schools. Continuity is what people expect. Families expect it. We want relationships with families. But on the other hand, if we don't have the right mix of people for the students that we are serving, oftentimes students and what students need are a secondary priority. The primary priority seems to be a loyalty to the staff. And I think that can really get in the way of districts being dynamic and nimble and responding to the fact that they might have a changing workforce. And you can even imagine that playing out in many ways. But oftentimes, and we've seen this, I'll give you an example. In San Francisco right now, the district doesn't have enough money. It's under fiscal oversight from the state. They have too many employees, and yet they don't have the right employees. They're missing some teachers in certain grades and subjects, if you think about math and special ed. And yet they have to lay someone off before the state will even allow them to turn around and hire someone appropriate for that other position. And they are reluctant to lay them off. And so the concern has been, are we going to start school and the kids don't have a math teacher, but maybe the music teacher will fill in for the math teacher, and is that the right choice to make? So they are doing a whole lot of things like early retirement incentives, where they say, hey, I'll give you some money if you leave, which we also think is in some ways counterproductive because that means you're paying teachers to not work, which also costs money. And so other industries, for the most part, don't do that. Right. They're like, you've been a valuable employee. We're glad you were here, but we no longer need your services. Here's some notice. And also, we still have an opening for this other position, and if you think you're qualified, go ahead and apply for it. So anyway, that's what's hard for school districts. And they're really going to need to get smarter and better at managing the size and nature of their workforce to better meet the needs of their students while they're shrinking.
- [21:44]
A
One of the common strategies districts use to reduce their workforce is through attrition or, to your point, early retirement. But why do you feel those two may not always produce the right outcomes for schools?
- [21:55]
B
Well, I Think what they're trying to do is avoid the pain of handing out a paying slip. And so if the school district doesn't have enough math teachers or special ed teachers and they're putting in a long term sub for the pre algebra position or a special ed role that's not really friendly for students and they might have, and this is often the case, you have too many of our electives teachers because those are positions that people keep for life. Whether you're teaching ceramics or whatever it is. You might have too many elementary teachers because we don't have as many elementary students anymore. And what we're really missing is somebody who's capable of teaching, I don't know, high school physics. And so there's this kind of thing, oh, maybe we'll just get rid of the AP physics class on the schedule. Well, if that's what we think our kids need and we're holding on to the ceramics extra ceramics teacher, that is a strategy about focusing on avoiding layoffs than it is a strategy about meeting the needs of our kids. Early retirement the other issue I have with it is that sometimes your best talent takes you up on the early retirement and partly because they know they can go get a job somewhere else. So you are paying money for the best of the best of your employees to walk out the door. I think a smarter, more student focused strategy would be to exit your weakest performers and hold onto your strongest one so that you can get to a smaller, stronger workforce in your district which would be better suited to meet the needs of the kids that are still there.
- [23:32]
A
Are you looking for ways to save your district time and money on purchases while ensuring full compliance with state and federal procurement laws? The association of Educational Purchasing Agencies, or aepa, connects schools with competitively bid contracts across the nation. From technology and facilities to classroom essentials and services, AEPA helps you stretch your budget further and simplify the buying process. Trusted by schools across the country, AEPA brings the power of cooperative purchasing to your district. Find your local state agency and learn more@aepacoop.org and that can be challenging too, depending on the state. I mean, unions and collective bargaining agreements can be very specific in terms of what you can do with seniority in laying those folks off. So one of your best teachers might be one of your least senior and they may have to in the pecking order be laid off first. Are you seeing that as a problem across the US as well?
- [24:29]
B
It's a massive problem. I mean, we know this from the last recession that lots of districts exited you know, sometimes they're lower paid, sometimes better staff members to hold onto a teacher who makes twice as much, that's not very effective at teaching reading. And I think that is a crime against humanity. And I say that, I say that because if we were making decisions for what's best for kids, we would not do that. Right? We would say, where is our talent? Where's our strong? Where are our strongest players? And let's hold on to them. And I also know that unions are very real and have negotiated these things, but it takes two signatures to agree to a union contract. And if you're looking ahead at the big shrink like I'm forecasting, then I would say this is a really good time to revisit your policies by which you exit your teachers because you maybe want more flexibility in being exiting teachers. And also it may mean that if you brought in a lot of teachers when the Esser funds, the relief funds were flowing, and some of those are not very good, they might still be in that window where you can exit them sooner. I would be proactively exiting teachers that I did not want to hold on to. And that might mean inviting some of your specialists to come back to the classroom. Maybe you have to pay them some money to do that because many of them think they got promoted out of the classroom. But if that's where the talent is, that talent, we want it to be student facing. That's our strongest player. I think this is a really good time. I think states can provide some cover for districts, and districts might need to ask their state leaders, hey, can you? Because some states say you're not allowed to do seniority based layoffs. That law is different in every state. You have to focus on what the needs of the students are. And then I would say really proactively manage it in the context of what you have. But if you're up for union negotiations soon, I would prioritize getting more flexibility in controlling that, how you shrink your workforce. And I know the unions are nervous about that, but the last thing a district wants is a very senior, very expensive workforce that doesn't work for the kids. It has that, I think is neglecting their role in being stewards of these public funds on behalf of kids.
- [26:49]
A
Right. And another challenge to that too is oftentimes those senior teachers are the ones at the negotiation table. So you're talking about them and having a direct impact on their own employment.
- [27:00]
B
And that's where I would be clear with the public about what we're trying to do. Because the public doesn't love hearing that their absolute favorite fifth grade teacher just got exited because that person was junior. And that's not always the case, that the younger one is more valuable. But if the district leaders go to the public and say, we are pushing hard on our union to bring back more control over who stays and who goes, and that's going to be important because we want to make sure our kids have the workforce that they need and our union is pushing back on us on that. So we're working on that with them. Then I think at least we're being honest with people, what's at stake. And sometimes we don't share that with the public. And then they think, why did you do this? Why did you just lay off the teacher of the year in my school? You look like you're incompetent. Right. Because that strategy does not make any sense. So use the public to your advantage in those discussions. Some people will think you cannot talk about that with the public, that that's a labor practice violation. It's not true. You are allowed to update the public on what you're negotiating for and what the, you know, what the union is pushing back on.
- [28:21]
A
But you talk about building a smaller, stronger workforce. What does that actually look like in practice if a district is to try and implement this small, stronger workforce?
- [28:31]
B
Yeah, I mean, we did the opposite of that with Esser funds. Right. We hired all these new people. So we took some of our best teachers out of the classroom and we made them reading coaches and interventionists and whatever else. And then we went to the labor market and we hired, out of a very thin labor market, sometimes weaker teachers in the classroom. And now we told the reading coach, work with this weaker teacher to make them a better teacher. So what a smaller, stronger workforce looks like is our core team is working directly with students. Our talent is with the kids, not in this middle layer where they're supervising the people working with kids. It's almost like imagine if you have an NBA basketball team and you took your star point score and you pulled them out and said, want to add you to the coaching team. So we want you to be a coach. Let's go out and get another basketball player. And they're not as good, but now they got the coach. So the coach is going to tell them, no, no, shoot the basket like this. And that isn't as productive as having the star player on the front line. So a smaller, stronger team doesn't require as many specialists because, you know, we're not constantly sending kids out of A classroom for behavioral issues because the teachers are stronger. We don't have as many kids identified for special ed because they're learning reading in their tier one instruction. Or we don't need as many kids to go to tutoring because their teacher was a little bit stronger. We don't need to do as much professional development because the teaching force we have is already stronger. So I think it's all of all of those things that kids need less. They need to depend less on this middle layer of services. Their teachers depend less on that middle layer of services because they are stronger.
- [30:20]
A
Well, obviously labor is a major portion of the budget, but staffing isn't the only lever in school district budgets. I want to talk a little bit about programs and services and maybe how districts can look at reallocating resources a little more strategically. Recently, spring ISD in Texas is considering closure. CTE consolidation is scaling back extracurriculars. So there's a lot of different options on the table. With a district like that who has kind of just a cadre of things to maybe ax in their budget, what's the best way to really evaluate those trade offs?
- [30:56]
B
Well, I think for one, there's a tendency to do everything but less of it. I think that's a mistake. So we do this when we do we furlough some school days and stuff like that, we're like, oh, let's just cross three days off the calendar and then everybody gets the same thing, but less of it. Well, kids don't need less time in school. So I think. And it's not great for teachers either. They get less pay. So I think furloughs and things are a less is less strategy. But I think if we. So many of our program additions in the last couple of years have been around providing some layer of support services to either staff or students, and we might look at whether we need those or if they're working right. Like if we promoted a prize math teacher out of the classroom and made them a math coach and then math scores fell, then a smaller, stronger program might put that math coach back in the classroom to teach it, to teach math. Maybe that was a better way to do that. So I'd be looking really carefully at whether these programs are working. And then the other thing too is I think we need to understand what the appetite is for all of these services. So you might say, well, one school has a lot of the core sports, another school has more of the arts program, and kids can choose which one they want to go to. So you don't have to have all the same set of services at every school. So that's another strategy that we've seen. And there are schools that say they're unapologetically thin in the sense that they like. Yeah, we don't offer 16 athletic programs. Right. We're in the mountains, the kids go skiing or we're in the mountains, the kids go hiking or, you know, we do these three things. And especially if kids have other options in the area, I think that can be a possibility. You know, I think a lot of times school districts get to the point where they feel like they don't have much of a choice but to cut their AP classes. But with online electives, you can, you know, you can run an AP program for a kid on a per student rate in ways that you couldn't do that 10 years before. So I think we need to think about whether or not we need some of those options and whether or not that allows us to still offer more complete complement of options for kids course wise, even if we don't have the staffing to staff full classes for all of them.
- [33:29]
A
What about on the administrative side? Are there operational efficiencies that are often overlooked? I'm thinking maybe outsourcing shared services. We talked about a little bit technology consolidation. What are some efficiencies that districts should be looking at?
- [33:43]
B
Well, you know, sometimes we saw this back in the last recession where Clark county had been hiring. Hiring. I mean, they were opening a new school constantly, like every month or every week or something. So they were hiring like crazy. They had this huge HR team. And then the recession hit. People didn't move to Las Vegas, got hit very bad, you know, hard in that recession. And students started leaving, parents lost their jobs and stuff. And the HR team didn't shrink, even though they weren't out there hiring. So I think administratively we need to say, like, does this team need to rethink the. What it's doing? Is that workload still there? Are there services we could potentially share with another district? Can we get some? There's, you know, there are a whole lot of outsourcing opportunities for some of those back office functions. And I think this might be a time to kind of look at those and say, do we need an expert on everything that we have and, and can one person do two of those jobs? There's another district that we studied and we came in and tried to itemize what everybody in central office was doing and what it cost. And we would go to people and say, well, what is it that you do? And they would say, I do tons of stuff. And we're like, I know, can you help me walk through it? And one of them's like, well, I visit every school once a week to make sure they're delivering the right amount of time for pe. And we realize no one needs to do that. Right. Like, maybe that function doesn't need to exist anymore. And so I think we need to take a hard look at our administrative functions as well and say that's some of that consolidation happens there, and maybe we can downsize appropriately. I mean, administrative bloat is the thing.
- [35:28]
A
Sure, sure. So let's take a step back and look at a bigger picture. You had mentioned that the big shrink could be an opportunity for innovation, which it certainly sounds like it can be. But I feel like that is going to require a shift in mindset. Can you tell me what that's going to require from district leaders?
- [35:48]
B
Well, it requires more than anything, putting students at the forefront of all your decisions. And I cannot tell you. Our team is trained to listen carefully at the words that districts use. And when they say we are approaching this with the goal of the least amount of layoffs possible for our staff. Not a word about kids. If the goal is preservation of jobs, then the goal cannot be maximizing value for students. There's that piece of this. I think there is a way to make this a smaller, stronger workforce. You can imagine a lot of the people we hire now are to support teachers who are not as effective as we want them to be for whatever reason. But if we had that really strong star player in the classroom, then more students can potentially benefit from that capacity and we can get better outcomes from the beginning. I think there's a lot of ways that this could be the case. So if we had our strongest reading talent that teachers are reading in those first, second and third grade positions, could we do a better job at teaching reading? And some kids don't end up being identified for special ed. So then you have cost savings over there. That's what potentially having a smaller, stronger program looks like is. Not only does everybody's reading scores go up, but then you have this cost savings on the other side. So I do think there's a way to do things better. I think a lot of times we have a fixed class size, say math in a pre algebra class or an algebra class. And if we're, say every class is 25, 28 kids, but we have a rock star math teacher who, yeah, we're going to pay them more and they're going to teach 35 or 40 kids. And that is a way that that individual can earn more and create more value because teacher quality always trumps class size and more students can learn from that teacher. Then we can have a system that might be stronger and more lucrative for its employees. But it does mean we're moving away from. Every school looks the same in terms of its staffing complement and every set of job responsibilities is the same. So you can imagine a great science teacher who agrees to pick up one more section. Another batch of kids gets the great science teacher in high school and so on. So finding ways, even if you have smaller schools, maybe the personal relationships are stronger. I mentioned that my own kids went to a small school at one point, the day they started, the whole school already knew their name. That was not what we had experienced in the big city. So there are ways to get more value out of the shrink. But we have to look at it not as we're trying to do more with less and some kind of eat your broccoli kind of exercise where everybody feels like their work is degraded and more toward what is a new way that the school can look where everybody can roll up their sleeves and have a really big impact on, on these kids lives.
- [39:08]
A
Right. And there's obviously many different options and a lot of opportunity for districts to get ahead of this before it's too late. But as you well know, school districts aren't the most nimble of organizations. So what, what risks do districts face if they delay these tough decisions? Or maybe they apply across the board cuts a little too deep? What are those kind of those, those risks that they run with those two kind of economists options?
- [39:33]
B
Well, first and foremost, and we're already seeing this, a lot of districts are, are, are spending down their reserves because they're not, they're sort of like oh wow, look, look at their enrollment. Shoot, let's spend some reserves and we'll figure this out and maybe we'll recruit more students to come back. And it's like they're knocking on doors trying to find students who don't live there anymore. Right. And so you spend down a reserve that leaves the district more fragile. Something comes along, you need reserves and now you don't have them. Then suddenly your district is in an insolvency position and the state is coming in and you're surrendering control. So it is absolutely incumbent on the district leaders and the school board to manage this eyes wide open, proactively and not sit back and hope that someone's going to Come along and save them. And I can't emphasize that enough. There are districts of all sizes in this country. So if you're a 10,000 student district and you just lost 1,000 kids and you're down at 9,000, 9,000 is a viable district size. So is 8,000, so is 5,000, so is 2,000. So you just have to do the work, the hard work of converting your district into a smaller district. And that may require a lot of educating the public. Right. Because I saw a district where they were going to lay off some staff and, and the kids were protesting outside the school. And I thought, well, I wonder what the kids alternative suggestion is besides laying off the staff. Do they want to cut all their athletics? Do they want to end school a month early? What's their alternative? Of course there was no alternative. They don't know better. They think the options are either cut the staff or keep the staff. That's it. No other trade off. So I think it requires an enormous amount of educating of the public to help bring them along. And it is hard work. It's much easier to be a leader when you're growing this system than when you're shrinking it. But this is what leadership looks like right now. That's what the task is. And so we really want districts to make sure they are proactive, they're honest with their community. You're going to have to do a lot of discussions with principals, with teachers, with parents to say, here's the money we have and here's where we're going. And we're going to work together to make sure that we're using our limited resources to maximize value for the kids we have. That is literally the job.
- [41:58]
A
Absolutely. So as we wind down here, for school business officials or HR directors and superintendents who may be facing declining enrollment today, what would you say to them to where they should begin this process?
- [42:12]
B
So, you know, we teach our certificate and finance. It's at Georgetown. It's a two day program. It's got a lot of district leaders that are wrestling with just this, right. They're saying I need to know what data to have in hand. I need to know what messaging works with the public. I need to know what my list of options are and I need to play them out. And so we're dealing with this like we're starting another one of our certificate programs tomorrow. Like I said, they're two days. So people fly in and they do these programs and that is to build that skill set for this moment. It's a different skill set than when you're growing. And so we have to recognize it cannot be business as usual. Our recommendation is to get really smart, spend a lot of time communicating. You've got to do a lot of running the numbers. You've got to really watch your enrollments each step of the way. We have a lot of resources on our website at Edenomics Lab and obviously a newsletter people can sign up for. They get free resources from that, sometimes some webinars, et cetera. But it's kind of show time for this. So our suggestion would be right now, roll up your sleeves, be honest about what the challenge is ahead, and make sure to keep students at the forefront.
- [43:31]
A
A lot to consider. Well, Dr. Rosa, it's always a pleasure to speak with you and I appreciate you joining me on School Business Insider today.
- [43:39]
B
Thanks for having me.
- [43:41]
A
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