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Small Districts Tally $1 Billion in Annual Unnecessary Spending, Report Says

Small, nonremote school districts represent $1 billion in lost annual capacity, or money that might not have had to be spent if the districts were larger, according to a new study.

"Size Matters: A Look at School-District Consolidation" was produced by the Center for American Progress, a left-leaning think tank. Its author, senior fellow Ulrich Boser, argues that money could be put to better use.

"States, districts, and policymakers need to think of better ways to support these small districts and recognize that an education system designed 200 years ago may no longer be the right system today," according to the report.

The report defined "small" as districts with less than 1,000 students and are located in populated areas. It looked at the "extra education costs" associated with those districts because they lack economies of scale. (See related post on District Dossier.)

The study cautioned the numbers weren't meant to be "firm, take-to-the-bank" figures and rather were intended to give a sense and scope of the cost. The report explicitly describes the methodology by which it arrived at the $1 billion figure.

Ten states—New Jersey, New York, Illinois, Texas, California, Vermont, Oklahoma, Missouri, Montana, and Wisconsin—accounted for 68 percent of the "lost" $1 billion. Those states have a total of 3,625 small school districts.

Although officials have looked at consolidation as a solution, the 26-page study offered three alternatives to address the problem while recognizing there isn't a silver bullet. It states the biggest problem is not size, rather, it's the country's system for managing districts to ensure dollars are spent as effectively as possible.

Those include:
• States should generally avoid one-size-fits-all approaches to maximizing district size. Instead, officials should do more to improve systems of education management while taking into account local districts' needs.

• States and districts should reform school-management systems by creating performance-focused management systems that are "flexible on inputs and strict on outcomes."

• States and districts should take a regional approach and share resources and services whenever possible. States could help small districts by creating state-supported education-service agencies that serve two or more small districts.

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