Jeffco schools are heading for a fiscal cliff

Across the country, many school districts are engulfed in a complex crisis, which includes stagnant academic achievement (compounded by COVID-19 learning losses), declining enrollment and revenue, rising wage costs and benefits, underutilization/overcapacity of school buildings, and the impending end of billions in federal pandemic assistance.

Los Angeles Schools Superintendent Alberto Carvalho recently called this impending fiscal cliff “Armageddon” and “is going to be a hurricane of massive proportions.”

Because this crisis is developing much faster here in Jefferson County, it has become the proverbial “canary in the coal mine” of what awaits us across America.

In 2012, the Jeffco School District spent $446 million in salaries and benefits to serve 77,143 students in its district-operated schools. Ten years later, it has spent $702 million, or 57% more, to serve 69,526 students, or 10% less.

Sixty-eight Jeffco schools are now operating at less than 80% capacity, which is a threshold used by many school districts to define low utilization. While 48 of them are operating at less than 65% capacity, Jeffco proposes to close only 16 this year, and more will certainly have to be closed in the coming years. And since 2018, nearly all of these underutilized schools have received millions of dollars in new investments through the district’s capital improvement program.

One of the reasons enrollment has plummeted is Jeffco’s steadily declining academic performance. For example, a July 2022 EdChoice/Morning Consult poll found that the top three criteria for parents choosing a school are that it is close, safe, and has good academic results. With 48% of Jeffco students choosing to leave their neighborhood school, many parents are willing to sacrifice proximity for the other two benefits.

In 2019, before the arrival of COVID-19, 54% of Jeffco 3rd students were not proficient on the state reading assessment (the Colorado Measures of Academic Achievement, or CMAS) – an improvement of only 2% from 2015. In 6e in mathematics, performance deteriorated: 65% were not proficient in 2019, compared to 58% who were not proficient in 2015.

The 2022 state assessment results showed that learning losses related to COVID-19 have further worsened Jeffco’s situation. For example, even though more than 3,000 students who had low scores in 2019 did not take CMAS 2022, this year a shocking 70% of 6e graders have not met the state math proficiency standard!

In Colorado, every 11e elementary students take the SAT. This is the latest measure we have of the effectiveness of our school districts in achieving their primary goal of educating our children. In 2022, Jeffco’s 11th grade SAT scores continued their five-year decline.

Jeffco’s declining academic performance has contributed to the flight of parents from its neighborhood schools, where enrollment has declined by 11,058 students since 2012. Of those, 2,050 went to district-run optional schools, 1,952 in district charter schools and 7,056 left the district at all levels, including moves to other states, districts, and private, religious, and home schools.

Georgetown’s EdunomicsLab estimates that Jeffco needs to spend $120 million on tutoring over the next three years to recoup COVID-19-related learning losses and bring student achievement back to (unacceptable) 2019 levels.

But the district does not plan to spend close to that amount, as its financial situation is becoming dire.

Despite receiving millions in federal and state COVID-19 aid, the Jeffco School District must cut reserves by $33 million next year to cover its budget shortfall. This deficit is expected to reach $39 million in 2024 and $58 million in 2025. This will leave only $38 million in unallocated reserves.

Absent new revenue or dramatic cost reductions to eliminate projected budget deficits, in 2026 Jeffco will fall below the minimum amount of reserves required by Colorado law (i.e. its TABOR reserve) , which will trigger automatic corrective action, including the possible imposition of an emergency tax increase for Jeffco residents.

It is this deepening financial crisis that is forcing Jeffco to close 16 elementary schools this year, with more closings to come in 2023. However, closing schools will not reduce the budget shortfall unless staff are also reduced.

For example, at the end of 2021, Jeffco had 9,238 full-time equivalent employees, each costing an average of $76,000 in salary and pension, health and other benefits. Using this average cost and with no one-time proceeds from the sale of closed schools, Jeffco will need to cut 434 employees just to eliminate its projected deficit of $33 million in 2023.

But it won’t generate the extra cash needed to pay for all the initiatives needed to reverse Jeffco’s academic decline.

Whether district management proposes, and the current majority of the board, backed by the union, approves, the painful changes needed at Jeffco remain to be seen.

In sum, there is a serious risk that Jeffco’s plunge into financial distress will pass a tipping point and spin out of control, as more parents flee district-run schools and the talented outsiders that the new superintendent Tracy Dorland brought to Jeffco abandon a sinking ship.

Worse still, it will be the children, owners and Jeffco businesses who will suffer the consequences, not the adults who have destroyed a once great school district.

Tom Coyne is an executive at Partners Britten Coyne, and former member of the Jefferson County School District Accountability Committee. He is married to Susan Miller, director of the Jeffco Public Schools Board. Opinions in this column are those of Tom Coyne only.

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