Rapid enrollment decline causes daunting financial challenges’

In discussions with community members regarding the Mounds View School District, I realize that many people understand that the aging of the population in our district is causing declining enrollment in our schools. Many also understand that the MVSD has the highest rate of enrollment decline of any suburban metro district. However, I realize that the community does not generally understand that rapid declines in enrollment cause daunting financial challenges. These challenges are due to the fact that district funding from the state and local levies comes on a per pupil basis. However, when the student enrollment is in rapid decline, the amount of funding that is lost year over year is much higher than the reduced need.

To better illustrate the challenge it is best to use a simple model of the district financial situation. First, assume 25 kids represent one “classroom” worth of students in our district. When our district loses 25 kids or one “classroom” worth of students, we actually lose approximately three “classrooms” worth of state and local funding. In the 2007-08 school year, MVSD’s enrollment will decline by 16 “classrooms” of kids. However, the subsequent revenue lost is worth 48 “classrooms” of funding. So, the children who remain in the district are impacted in terms of increased class sizes and reduced programs.

The challenge does not stop in the 2007-08 school year, as MVSD is projected to experience the loss of 2,000 kids over a five year period. Projecting this equation out for five years equates to a loss of enrollment of approximately 80 “classrooms” of kids, but lost funding to the district worth 240 “classrooms.” Unfortunately, the excessive loss of funding is not the only aspect of the challenging financial equation, as there are other factors causing large increases on the expense side, such as energy costs and health care costs.

I realize that the economics of school districts are complicated for many reasons. If you would like to be more informed on this topic, the district Web site offers a comprehensive review of the financial facts at http://www.moundsviewschools.org

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