Nationally, we can expect a 0.5% decline in enrollment per year. Some districts will be hit much harder. Over the next decade, Los Angeles Unified will lose about a third of its enrollment.
None of this should be a surprise. When enrollment is down in the youngest grades, it means there are fewer students in the pipeline.
Shrinking is hard. But it doesn’t have to erode systems and hurt students. With a strong plan, leaders can approach shrinking as a path toward a smaller, stronger, more nimble school system that better serves its remaining students.
Reducing labor costs is unavoidable. Some 80-90% of the budget pays for labor, so leaders will need to face this task head-on.
With a strong plan, leaders can approach shrinking as a path toward a smaller, stronger, more nimble school system that better serves its remaining students.
What About Attrition?
Reducing labor via attrition may seem the most compassionate option. But attrition is uneven, leaving a district with too few math or special education teachers, and an oversupply of those in P.E. or ceramics. In some cases, underqualified teachers get reassigned to critical subjects, leaving students underserved.
Some offer early retirement payouts. Districts encourage senior, higher-paid employees to leave early by sweetening the deal with financial bonuses. While this reduces salary obligations in the short term, it’s a costly and often inefficient approach—essentially paying labor to not work. Worse, it risks pushing out some of the district’s strongest educators at a time when teacher effectiveness is critical for student success.
Furloughs (temporary unpaid leave days) can also save money. But fewer school days mean less learning time, which isn’t good.
There is a better option. When leaders pursue a smaller, stronger workforce, the net effect can be positive. This approach means understanding which employees deliver the greatest value for students and then reorganizing the work around those effective educators. Likely that will mean fewer specialists, programs, and interventionists in favor of a smaller set of well-paid student-facing generalists.
Where staff reductions are needed, putting students at the forefront means exiting the least effective employees. Leaders should avoid last-in-first-out seniority-based reductions, and instead boldly (and unapologetically) work to hold on to the top performers. If doing so requires changes to the labor contract, now is the time to make those changes.
Administration staff must shrink, too, so that remaining leaders can take on more responsibilities. Smaller districts can share back-office functions with other districts and contract for specialized roles (like speech therapy).
Part of the work will involve scrutinizing existing programs to decide which deliver measurable value for the dollar. Too often, leaders default to maintaining the programs that have been around the longest, regardless of their effectiveness.
Some districts will need to close schools or risk spreading dollars too thin across too many buildings. Our rule of thumb is that closing 1 of every 15 under-enrolled schools saves about 4% of a district’s budget, mostly in labor costs. But here again, leaders should use data to guide decisions, as stronger, smaller schools can often work if staffed differently.
There’s No Sugar Coating It: Shrinking Is Hard Work.
Sometimes leaders look the other way, hoping that something in the forecast will change as they spend down reserves. Sometimes they argue that there’s no way to reduce costs with fewer students. (That’s disingenuous: A scan of the 13,000 or so districts in this country shows that they can and do operate at all different sizes.)
Yet, if we accept the fact that a decline in enrollment is coming, the task of shrinking is unavoidable. The only question is whether leaders will shrink in ways that ultimately degrade their school systems or do the hard work of seeking a smaller but more effective delivery model for the students they now serve.
Who’s up for the challenge?