Center for American Progress

RELEASE: New Report Estimates the Lost Capacity of Small School Districts, Makes Recommendations for More Productive Use of Education Dollars
Press Release

RELEASE: New Report Estimates the Lost Capacity of Small School Districts, Makes Recommendations for More Productive Use of Education Dollars

Washington, D.C. — With policymakers increasingly concerned about declining budgets, a new report released today by the Center for American Progress looks at the unnecessary costs associated with small school districts. The report, “Size Matters: A Look at School District Consolidation,” finds that small, nonremote districts might represent $1 billion in lost capacity. The report also puts forward recommendations for how policymakers can address the unique challenges faced by small districts.

“Policymakers need to rethink how we manage small districts, and we need to recognize that an education system designed 200 years ago may no longer be the right system today,” said Ulrich Boser, Senior Fellow at the Center for American Progress and author of the report.

While researchers have long known that school-district size impacts how productively education dollars are spent, this report calculates national and state-by-state numbers estimating the scope of the problem. The report’s key findings include:

  • Many states have large percentages of small, nonremote districts that may represent hundreds of millions of dollars in lost capacity. Collectively, small districts might represent as much as $1 billion per year in lost capacity. By lost capacity, we mean money that may not have been spent if the district was larger.
  • Ten states account for more than $650 million in lost capacity, or about 68 percent of the total. States like New Jersey, New York, and Illinois show the largest amount of lost capacity due to the existence of small districts, and in each of the states, small, nonremote districts post between $90 million to $100 million in lost capacity.

With tight education budgets for the foreseeable future, the report offers several recommendations for dealing with the issues small school districts are confronting:

  • States should avoid one-size-fits-all approaches to maximizing district size. While small school districts may suffer from economies of scale, the report’s author cautions that the best solution for one district may be different for another district. Large, systemic consolidation efforts have their own set of problems, according to the author. In pursuing reforms, policymakers ought to consider the local context and needs of school districts as well as ways to improve education-management systems.
  • States and districts must reform school-management systems. Policymakers need to create performance-focused management systems that encourage flexibility and innovation, but at the same time, emphasize the importance of improving educational outcomes.
  • States and districts should consider reorganization and the sharing of services and resources where possible. States can defray some of the costs associated with small school districts by creating state-supported education agencies. Alternatively, small school districts can band together to form Boards of Cooperative Educational Services, or BOCES, as many districts in Colorado and New York have done. Both state-supported education agencies and BOCES often allow for the efficient sharing of services relating to workers’ compensation, health care, and special education.

Read the full report: Size Matters: A Look at School-District Consolidation by Ulrich Boser

To speak with an expert on this topic, contact Katie Peters at [email protected] or 202.741.6285.