School Budget Brightens As Enrollment Drop Slows

District loses only 50 students as revenues rise

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Payson schools this semester have so far seen an enrollment decline only half as sharp as in the past two years, according to preliminary figures reported at a recent board meeting.

Enrollment in the 2,500-student district this fall dropped by about 50 students — a decrease of less than 2 percent. By contrast, last year the decline topped 5 percent — which cost the district nearly $600,000 in state funding and contributed to painful budget cuts.

Not only has the enrollment decline slowed sharply, but a continued increase in students enrolled in the newly launched Payson Virtual Academy may nibble away at the decline, Superintendent Casey O’Brien told the board.

Moreover, the distinct brightening in the state budget picture and the possibility for renewed federal help may give the district a budget respite, after two tough years marked by layoffs and school closures.

“We’re down by about 50 students, but the virtual academy continues to enroll new students,” said O’Brien.

Later, he said some 18 students have enrolled full-time in the online classes — many new to the district. There are 79 students taking virtual academy classes. The program continues to pick up about two full-time students per week, he said.

He said state budget planners are projecting a $27 million budget surplus as state revenues rise, which stands in stark contrast to the $1 billion deficit projected at this time last year.

“It’s too early to start making projections, but the state picture is so much better this year that we could find ourselves in a much better position. And we’re still adding about two kids a week to the virtual academy,” said O’Brien.

The district this year purchased an online curriculum from the Mesa School District and has trained its own teachers in how to help monitor students who sign up for the online classes.

Later in the meeting, the school board approved a $75 per-semester fee for any students who take online classes above the six-class threshold covered by the state reimbursement.

The online classes represent a potential windfall for many districts, since the state pays nearly the same rate for online classes, although the district has much lower per-student costs.

National studies have yielded mixed results concerning whether students learn as much in online classes as regular classes. Educators say that top students do nearly as well, but a much higher percentage of students who enroll in online classes fail to finish the class.

The brightening financial picture has given school districts around the state grounds for hope of a better year. In the past three years, the Legislature has cut per-student state support drastically — putting Arizona near the bottom nationally in per-student spending.

The Census Bureau figures in 2008 before the latest round of deep cuts put Arizona at 48th nationally in per-student spending and 47th nationally in teacher-student ratios. Since then, Arizona has reduced per-student state spending by 24 percent, tied with South Carolina for the sharpest decline in the nation, according to the National Center on Education Statistics. That works out to an inflation-adjusted cut of $845 per student, second only to California’s $1,414 per-student reduction.

In 1979, education accounted for 69 percent of state general fund spending. Today, it has declined to 57 percent.

Payson last year eliminated about 25 positions, half of them teaching positions. That represented a 7 percent reduction, part of a wave of school layoffs nationwide that eliminated an estimated 300,000 school jobs.

Payson also closed Frontier Elementary School, reduced spending on maintenance and classroom supplies and employee benefits.

District officials have been holding their breath waiting for this semester’s enrollment figures, fearful the enrollment decline would continue unabated.

School officials say that young families with children have been especially hard-hit by the recession, resulting in the decline in enrollment and a near-doubling in the number of students who qualify for federally subsidized school lunch programs based on dwindling family income. Payson now has one of the highest school poverty rates in the state.

However, the distinct slowdown in the enrollment decline suggests the economy has at least bottomed out locally.

Long term, the district expects to resume growth if the town manages to build a college campus, bring in Blue Ridge water and resume expansion toward a projected doubling of the population in the next few decades.

O’Brien said the jobs plan proposal recently made by President Barack Obama includes more help for schools nationwide.

The first round of the federal stimulus plan two years ago included about $48 billion in aid for local school districts, which averted deeper layoffs. Payson got more than $1 million to cushion its budget decline — enough money to avert 20 to 25 teacher layoffs.

Payson schools officials have worried about the impact of losing that money, plus extra money it got this year through the Forest Service to compensate for the large share of non-taxable federal land in the district.

The recently proposed jobs bill could include about $35 billion in new aid for local school districts nationwide, including about $678 million for schools in Arizona — which represents roughly 17 percent of state spending.

That could provide a flush of federal funds to replace the federal and Forest Service money that has helped stave off draconian cuts in the past two years, said the superintendent.

However, prospects for passage of the jobs bill remain cloudy, said O’Brien.

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