Unusually, the cost of continuing current state services dropped substantially for the 2021 supplemental to the 2019–21 operating budget and the 2022 supplemental to the 2021–23 operating budget. Those cost reductions were led by enrollment declines in Washington’s public schools. Further, the state’s most recent caseload forecast does not expect enrollment to bounce back to pre-pandemic levels.

In Washington, K–12 enrollment dropped by 39,293 (3.6%) in SY 2020–21 and by another 3,918 (0.4%) in SY 2021–22. Of 319 districts (including charter and tribal schools):

• 249 districts lost enrollment from SY 2019–20 to SY 2020–21
• 161 districts lost enrollment from SY 2020–21 to SY 2021–22
• 239 districts lost enrollment from SY 2019–20 to SY 2021–22

Because school funding is tied to enrollment, the Office of Superintendent of Public Instruction (OSPI) has estimated that these reductions would result in state funding shortfalls for school districts of $503.2 million in SY 2020–21 and $517.3 million in SY 2021–22 (compared to the funding districts would have received with pre-pandemic SY 2019–20 enrollment).

But districts have received extraordinary funding for SY 2020–21 and SY 2021–22. First, the federal government provided three rounds of Elementary and Secondary School Emergency Relief (ESSER) to Washington school districts, totaling $2.610 billion. (The first round must be used by Sept. 2022, the second round must be used by Sept. 2023, and the third round must be used by Sept. 2024.)

Second, in 2021, the Legislature appropriated $123.7 million from state funds subject to the outlook (NGFO) for enrollment stabilization. The policy was to fund the entire difference in enrollment between SY 2019–20 and SY 2020–21, but state money was offset by each district’s allocation from the second federal ESSER round. (Thus, if a district’s ESSER II money exceeded its enrollment funding shortfall, it received no state money.) When this policy was adopted, the Caseload Forecast Council (CFC) had estimated that K–12 enrollment would bounce back in SY 2021–22, so this was meant to be bridge funding.

However, in the Nov. 2021 and Feb. 2022 forecasts, the CFC estimated that enrollment will not bounce back. Nevertheless, in 2022, the Legislature passed SHB 1590, which provides more enrollment stabilization. This time around, the stabilization funding is based on SY 2021–22 enrollment compared to SY 2019–20, but the funding is only meant to cover 50% of the enrollment funding shortfall (and it is not offset by a district’s ESSER funds). The Legislature appropriated $346.5 million from the state’s share of the coronavirus state fiscal recovery fund (CSFRF; a pot of flexible federal relief) for this purpose—not state funds.

I’ve put together a spreadsheet that shows—for each school district—the enrollment changes over this period, funding shortfalls as estimated by OSPI, and estimated allocated stabilization and federal funds.

The estimated statewide two-year funding shortfall related to lost enrollment is $1.021 billion. State stabilization appropriations for the two years plus the three rounds of ESSER funding total $2.976 billion. Given the stabilization and federal relief funds, all but 10 districts received more than enough funding for the two years to cover their enrollment shortfalls. The amount not covered for the 10 districts totals just $6.1 million. (Of that, Issaquah accounts for $3.5 million and Mercer Island accounts for $1.2 million.)

The ESSER funds are very flexible. For example, they may be broadly used in response to the pandemic and for activities “necessary to maintain the operation of and continuity of services in local educational agencies and continuing to employ existing staff.” (Of the third round of allocations, 20% must be used to address learning loss.) According to OSPI’s ESSER dashboard, Washington’s districts have $1.672 billion left to spend of their ESSER allocations. (Here is the data by district.)

The AP and the New York Times have both recently written that similar enrollment trends are being seen around the country. The AP notes,

More districts will be making cuts in coming years, said Alex Spurrier, an associate partner at Bellwether Education Partners, a think tank. The last of the federal aid must be spent by 2024.

“Once the federal funding dries up, it will put a lot more districts in a lot more difficult position if they’re kind of kicking the can down the road of making the adjustments that they’ll need if they are going to be serving smaller student populations in the years to come,” he said.

Washington’s school districts have considerable ESSER funds left to spend over the next few years, but they should not expect additional state appropriations to fund students who are not expected to return. SHB 1590—Washington’s 2022 enrollment stabilization bill—states, “With this act and in the omnibus operating appropriations act, the legislature intends to extend stabilizing funding to districts that have seen temporary enrollment declines due to the COVID-19 pandemic for the final time.” (Emphasis added.)