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The number of “ghost” pupils may increase as state enrollment continues to drop as a result of parents opting to pull their kids out of public school, outmigration, and declining birthrates.

According to a report by the libertarian Reason Foundation, California is paying for 400,974 “ghost” students who do not exist, costing the state $4.06 billion in the 2022–2023 school year. This is due to funding guarantees and enrollment decline stabilizing efforts.

The study’s authors, Christian Barnard, and Aaron Garth Smith, looked at the expenses associated with so-called “hold harmless” laws, which shield public schools from cuts in financing when enrollment declines. The two primary policies in use are funding guarantees, which give schools a certain amount of state financial support regardless of enrollment, and falling enrollment protections, which permit schools to utilize earlier, higher enrollment figures to determine funding. Interestingly, “hold harmless” financing is not available for public charter schools in California.

Eighty-five percent of school districts got funds designated as “hold harmless.” Among the 148 schools that received funding under the minimal state aid program, 111 were “property-wealthy districts that didn’t ordinarily qualify for state formula help.”

The enrollment-based funding policy in California permits the use of the average daily attendance for the current year, the previous year, or the average of the three most recent years (excluding the current year), whichever is higher. The disparity between the number of students the school district actually enrolled and the number it used to get money is known as “ghost” students. Los Angeles Unified, the state’s largest school system, received $507.74 million in state funding because there were an estimated 50,417 “ghost” students. Los Angeles Unified comprises 125 of the more than 1,400 public schools in California that have seen enrollment drops of 20% or more as a result of the pandemic.

6.2% of the state formula assistance that school districts received on a statewide level came from “ghost” student budgets. Because of the state’s limited resources, funding for “ghost” students affects funding for actual students.

Smith told The Center Square, “California’s harmless regulations untether the relationship between K-12 financing and pupils.” Given the dire status of the state’s finances, legislators ought to think carefully about how best to distribute financing for public education. A positive first step in this direction would be to do away with phantom students and the state’s [minimum state assistance] requirement.

Enrollment in California public schools fell by 325,311 during the 2019–2020 and 2023–2024 academic years, despite the introduction of a brand-new grade, transitional kindergarten, in an attempt to increase financing and attendance rates.

For the upcoming fiscal year, California intends to spend about $23,940 on each TK–14 students. With one in four Californians expected to be 60 or older by 2030, enrollment declines could force the state to transfer funding from education to elder care at some point.

Author: Blake Ambrose

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