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Analysis: Open enrollment can hurt Iowa's smallest and largest schools

Student moves lead to shift of money, add to budget pressures

Adam Wesley/The Gazette

A Cedar Rapids Community School District bus sits in the Education Leadership Support Center
Adam Wesley/The Gazette A Cedar Rapids Community School District bus sits in the Education Leadership Support Center parking lot.

Iowa's smallest and largest school districts have lost students to open enrollment for more than the past decade, a pattern that has compounded existing budgetary strains for some districts and is likely to continue, one state analyst said.

Iowa's open enrollment law, which took effect in 1989, allows parents to move their children to a school outside the district in which they reside. The student's home district then sends the receiving district that student's tuition dollars — an amount of $6,121 for the 2014-2015 school year.

In the 2013-2014 school year, more than 28,000 Iowa students used open enrollment to move to another district, resulting in about $170 million in tuition moving from one district to another.

Open enrollment data on the current school year won't be released until mid-January, said Iowa Department of Education data manager Jay Pennington. But it's likely the 2014-2015 numbers will show the continuation of a 15-year trend, in which districts on the ends of the enrollment spectrum lose students to districts in the middle, he said.

For large districts, such as the Cedar Rapids Community School District, open enrollment losses often seem insignificant when considered as a percentage of the district's overall enrollment. But even seemingly small differences in a district's enrollment can have important implications for the district's budget and educational offerings.

Financial Impact

The Cedar Rapids district lost 777 more students to open enrollment this school year than it gained, according to a preliminary budget report the district's business services director, Steve Graham, presented to the school board this month.

That represents a loss of about 4.6 percent of the district's students and $4.75 million in tuition, up from 4.1 percent, or $4.2 million, last year. The student totals used in open-enrollment calculations represent certified enrollment, a weighted count used to determine state funding, rather than the official head count conducted by districts each fall.

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Open enrollment hurts the district financially, Graham said, because the district doesn't pay teachers as much as it receives in student tuition. A teacher with a class of 20 students might make $75,000 in a year, he said. But those 20 students' tuition would add up to more than $120,000. If those 20 students open-enrolled out of the district, taking their tuition with them, the district would lose at least $45,000 — even if it eliminated the teacher's position. Other operational costs — which often make up the balance of that money — do not decrease proportionally when students leave.

Those shifts in enrollment also can influence class sizes, noted Iowa City Community School District Superintendent Stephen Murley, because a district can use that difference between teacher salary and student tuition to hire and pay additional teachers. Class size, ironically, often is among the top reasons parents choose to move their students to another district.

“There's an implication that, if those folks were here, we might be able to staff a little more efficiently,” Murley said of students who open-enroll out of Iowa City. “We might be able to drive down section sizes.”

The Iowa City district lost 269 more students to open enrollment than it gained last year, which represents about 2 percent of the district's enrollment and about $1.6 million in tuition.

In either case, open enrollment can affect a district's staffing levels.

“If you think about any school budget, 80 percent are personnel — tied up in salaries and benefits,” Pennington said. “When you're losing 4 percent of your overall budget, it's going to have a direct impact on the number of teachers and administrators you have.”

For smaller districts, those impacts can be even more dramatic. Districts in the state's lowest enrollment category — those with fewer than 300 pupils — lost more students than they gained in each of three years since 2000 that were examined in a 2013 state condition-of-education report.

Of the 46 districts in that category in 2012-2013, 37 experienced a net loss of students to open enrollment.

Among districts with 7,500 or more students, only one experienced a net gain due to open enrollment in any of the years identified in the report.

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Losses of students among the state's smallest districts often topped 20 percent of the district's enrollment.

“That's massive,” Pennington said. “How do you maintain continuity for services for kids?”

To cope with the losses, he said, those districts often partner or consolidate with a neighboring district in a similar situation.

Mid-size districts gain

Students leaving the state's smallest and largest districts often move to those in the middle in terms of size. According to the 2013 state report, districts with 600 to 7,499 students consistently saw gains in the three years identified.

In the Corridor, the Clear Creek-Amana, College Community, Marion Independent, and Solon districts saw increases of 9 percent, 5.3 percent, 23.5 percent, and 10.2 percent, respectively, in 2013-2014.

Many of those students came from Cedar Rapids and Iowa City. According to data provided by those two districts, the top destinations for those leaving via open enrollment were Clear Creek-Amana, Linn-Mar, and Marion for Cedar Rapids students, and Clear Creek-Amana, Solon, and West Branch for Iowa City students.

Though response rates to the districts' surveys were not high, families who used open enrollment said academic opportunities, school quality, class size, and safety were among their top reasons for changing districts.

Logistical reasons — such as having previously attended the other district or having a parent who works closer to the other district — also often factored in.

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Many students open-enroll into the Marion district because of its strong home-school assistance program. Pennington said the 2014-2015 data will show an overall increase in enrollment statewide.

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