New Report Shows Small Schools Are A Financial Drain On The Education System

Mar 31, 2015

Legislation aimed at consolidating school districts is scheduled to hit the House floor Wednesday. And on the eve of this major policy debate, the Agency of Education has released a new report that suggests tiny districts, and their small schools, are a financial drain on the education system.

The research brief comes in direct to response to a study published back in January, when researchers from Penn State published a study extolling the virtues of Vermont’s tiny school districts.

The study arrived as elected officials began drafting legislation aimed at consolidating districts. But the authors of the Penn State study said small districts in rural communities serve a vital role, and that consolidation efforts would only increase costs and degrade academic quality.

Bruce Baker, a professor in the Department of Educational Theory Policy and Administration at Rutgers University, read about the study in a newspaper article his mom sent him.

“And I looked at that and I said gee, that’s just wrong,” Baker says.

So Baker, who grew up in Vermont, put together his own policy brief. And the results, out today, suggest that Vermont’s small districts and small schools are exacting a serious financial toll on the public education system.

“What we’re looking at are schools that are so small as to be financially unsustainable small,” Baker says.

"What we're looking at are schools that are so small as to be financially unsustainable small." - Bruce Baker, professor in the Department of Educational Theory Policy and Administration at Rutgers University

Baker teamed up on the project with Wendy Geller, the data administration director at the Vermont Agency of Education. Geller says the research will provide lawmakers, school board members and district administrators with the quality data needed to make important policy decisions.

“When you empower people with solid evidence, and when you empower people with knowledge about what the situation is, they usually can make the best decisions for them in those cases,” Geller says.

According to Baker and Geller, that evidence shows that when districts and schools drop below certain enrollment thresholds, taxpayers and students suffer as a result. Not only do per-pupil costs soar as a result of poor economies of scale, Baker says academic offerings begin to disappear as well.

The report touts past research showing optimal sizing of 300 to 500 students for elementary schools, 600 to 900 students for high schools, and 2,000 or more students for kindergarten through 12th grade districts.

Baker says schools can float above or below those thresholds and remain financially efficient and academically sound.

“But when we start talking 100 students or 75 students, then we start looking at an inability to provide breadth and depth of course offerings at the secondary level,” Baker says.

"When we start talking 100 students or 75 students, then we start looking at an inability to provide breadth and depth of course offerings at the secondary level." - Bruce Baker

The study says an abundance of small districts and small schools are one reason Vermont spends more on public education than any other state in the nation, as a percentage of its gross domestic product.

Baker says the real savings will come from school consolidation, not merely district consolidation. But he says communities are loath to shutter their local schools, however poorly attended. And he says it’s a problem policymakers are going to have to solve if they want to right-size their schools.

"It's such a tough political problem to overcome that they've got to come up with a creative way to get people to want this, to get people to see that wow, my kid can go to a school that's got a decent library, that's got whole array of advanced course offerings, science labs that are really well equipped." - Bruce Baker

“It’s such a tough political problem to overcome that they’ve got to come up with a creative way to get people to want this, to get people to see that wow, my kid can go to a school that’s got a decent library, that’s got whole array of advanced course offerings, science labs that are really well equipped,” Baker says.

One way to bring about that kind of consolidation, according to Baker, is to provide the upfront capital costs needed to turn newly consolidated schools into attractive options for students and parents.

“I think the state’s going to have to figure out, if they really ever want to get this done, how to create the capital investment to create the kinds of physical spaces … that people are going to want to drive another five to ten miles for,” Baker says.

Jill Remick, director of legislative affairs for the Agency of Education, says the report bolsters the case for removing some of the financial aid now flowing to small schools. Gov. Peter Shumlin has called for the phasing out of small-schools grants, and the elimination of a provision that insulates small schools against the full financial impact of a sudden drop in enrollment.

“By taking those pieces out, it’s going to become pretty clear pretty quickly in those communities about what they’re actually spending per pupil, and where they actually need to make a change,” Remick says.

Remick says the issue of district consolidation and school closure is an emotional one for local boards and parents. Remick says studies like the one done by Baker and Geller will let data guide the discussion.

"What we're hoping comes out of it is, especially in those really small districts that have seen significant decline in enrollment, that now they have something that's not based on emotion ... and to think okay, if we take emotion out of the equation, are we really doing what's best for our kids?" - Jill Remick, director of legislative affairs for the Agency of Education

“What we’re hoping comes out of it is, especially in those really small districts that have seen significant decline in enrollment, that now they have something that’s not based on emotion … and to think okay, if we take emotion out of the equation, are we really doing what’s best for our kids?” Remick says.