States Consider District Consolidations as Student Enrollment Drops

When two Wisconsin districts consolidated in 2018, the process was far more complicated than merely blending enrollments and budgets.

Leaders in the Friess Lake and Richfield Unified districts, which enrolled 175 and 400 K-8 students, respectively, had to wrestle with differing student data systems and teacher evaluation models, redraw attendance zones, close a historic elementary school, and refurnish buildings for new grade configurations. Other differences they had to navigate: school board governance, tax rates, and property values.

Though both districts were in the village of Richfield, they opted to pick a new identity so that it didn’t feel like Friess Lake was swallowed by the larger system that already carried the namesake. Leaders named it the Holy Hill district, after the road that connects the two school buildings from the former districts.

It was a small wedding, but it required an extensive prenuptial agreement. That may explain why no other Wisconsin districts have consolidated in the time since.

“Schools are really there to be the heart and center of the community. We have to listen to [local communities] and see what makes sense,” said Superintendent Tara Villalobos, who led the newly merged district when it opened. “For us, consolidation made sense, but I don’t know that it does all of the time.”

As student enrollment drops in communities across the country, straining school funding, state leaders and lawmakers want more districts to have that fraught conversation: How small is too small?

Governors and state lawmakers in states including Ohio, Mississippi, New Jersey, Pennsylvania, and Vermont have raised proposals to consolidate small school systems to cut combined overhead and administrative costs. The issue has fresh urgency in states with large rural areas, where districts with small enrollments face steep logistical, geographic, and bureaucratic hurdles to consolidation.

In Wisconsin, the most recent state to take up the issue, many of the state’s 421 school districts evolved from the more than 6,000 one-room schoolhouses that once dotted its landscape. Even after decades of consolidation efforts in the 20th century, Wisconsin has more than six times as many districts as Florida, a state with more than triple the number of public school students.

“We understand that it will always be a difficult decision,” said Republican state Rep. Joel Kitchens as he introduced a series of six district consolidation bills in a Nov. 11 committee hearing. “Schools are often closely linked to the identity of their communities, and change is always hard. … For many districts, however, consolidation will be the best option, both financially and educationally, in the not-too-distant future.”

Sponsors of those bills want to incentivize districts to consolidate rather than mandate them to do it. Those bills—which passed the assembly Nov. 19 and are now under consideration in the senate—would fund local feasibility studies for districts exploring consolidation or pooling students by grade level and increase state incentive funding for districts that opt to consolidate or pool students. The bills would also fund a statewide study to review current district boundaries, school facilities’ conditions, population projections, and the geographic feasibility of combining adjacent school systems.

Declining enrollment forces tough conversations for districts

Declining enrollment nationwide—fueled by drops in birth rates and immigration, shifts in where people choose to live, and increasing school choice—has forced tough conversations, both within districts and between them, said Carrie Hahnel, a senior associate partner at Bellwether, an organization that researches education trends and strategies.

U.S. public school enrollment dropped 2.5% between 2019 and 2023, the latest federal data show. Federal estimates project enrollment will drop an additional 5.5% by 2031, down to 46.8 million students.

Bellwether forecasted a surge of school consolidation within districts in an August analysis of 9,500 school systems with enrollments of 500 students or more in the 2023-24 school year. Though 68% of those districts had experienced enrollment declines between 2019-20 and 2023-24, fewer than 1% of their schools closed , the analysis found. That’s in part because states adopted “hold harmless” clauses that kept state funding relatively stable during the COVID-19 pandemic, and a surge of federal aid that helped sustain programs.

But changes in state budgets and the end of pandemic relief funds will likely lead to a surge in school closures, Hahnel said. Population shifts may be even more stark in rural districts that are too small to be included in that sample, especially as more states adopt policies that allow students to more easily transfer between districts, adding to the enrollment volatility.

But whole district consolidations are more difficult to project than school closures, Hahnel said.

“District consolidation, in many ways, is even trickier than school consolidation because it requires cooperation across governing bodies in a region, and it has significant impacts across the communities that are served,” she said. “We do think a lot of these districts are on the edge of having to make those decisions.”

States weigh consolidation proposals

As governors and state lawmakers float consolidation proposals, they are weighing whether to force the smallest districts to merge, or to offer incentives to encourage them to do so.

In New Jersey, lawmakers are debating a plan that would require districts to create countywide consolidation proposals for review by the state. In Pennsylvania, a Democratic state representative introduced a bill that would require the state to make recommendations for reducing the state’s 500 current districts to 100 through consolidation.

In Vermont, lawmakers are forging ahead with a plan that would reorganize the state’s 118 school districts, with enrollments ranging from 200 to 4,000 students, into larger school systems of 4,000 to 8,000 students each, Vermont Public Media reports. That move follows recommendations from a state task force that advised against the proposal, suggesting a system of voluntary mergers instead. Lawmakers who support consolidation said it’s necessary to provide more equitable and targeted funding to schools and to create greater economies of scale in purchasing and staffing.

Such proposals have been a political third rail in the past as residents of rural communities fear that the loss of schools could speed up population declines, leading businesses to close and families to relocate. And rural district leaders have cautioned that consolidations aren’t a panacea for states’ school funding woes. In Wisconsin, educators want state lawmakers to revise a school funding formula that caps how much revenue a district can draw from state aid and property taxes. That policy has led many districts to seek voter approval for local referenda that allow them to exceed those limits.

Looking at adjacent districts’ enrollment projections on a spreadsheet doesn’t tell the whole story, said Ben Niehaus, director of member services for the Wisconsin Association of School Boards. Many rural districts are also geographically large, which would lead to dramatic spikes in transportation costs and lengths of student bus rides if systems merged, closed schools, and sent students to new sites outside of their former attendance zones. And fiscally healthy districts with strong property tax bases are reluctant to merge with their less affluent neighbors, Niehaus said.

“We’re generally supportive [of the Wisconsin bills] because they are maintaining local control,” Neihaus said. “If two or more boards desire to consolidate, it’s going to help them and their communities.”

But district leaders remain concerned that voluntary proposals could “snowball into” more mandatory policies in the future, he said.

Because 70% of Wisconsin’s districts have seen enrollment declines in the last decade, consolidation is “the inevitable future of the education system,” said Kitchens, one of the bills’ sponsors.

Extra support may be a tipping point for some districts considering consolidation

In the Holy Hill district, consolidation was less complicated by geographic logistics, Villalobos said. The original districts’ K-8 buildings, which now serve as separate elementary and middle schools, are just 3.5 miles apart. And students already went to the same churches, joined the same clubs, participated in the same scouting troops, and were slated to attend the same high school.

Villalobos suspects the proposed new incentives may lead more districts to consider merging.

Districts currently receive $150 per pupil for the first five years after consolidation, and declining amounts for the final two years before the aid lapses.

One bill lawmakers are considering would raise the first year’s aid to $2,000 per pupil in the first year for districts that consolidate by the 2028-29 school year. That would bring aid closer to levels Holy Hill received under a previous school funding formula that expired after it merged, Villalobos said.

The two districts that formed Holy Hill spent about $15,000 combined on a consolidation study, and state funding for such analyses would eliminate a big barrier for small districts with tight budgets, she said.

“What I’ve heard and seen this time around is that these are incentives, not mandates,” Villalobos said. “I think that’s really critical because each community is different.”

Holy Hill kept all of the previous districts’ combined 100 staff members on board for the first year of operations, cutting about six positions after the first year. The district’s new school board was constituted to assure equal representation from both prior districts.

One wrinkle leaders didn’t anticipate: The state did not create a report card for the district in the first year because it technically didn’t have historic achievement data. When realtors called Villalobos, complaining that the designation confused families looking at homes in the area, she created her own local report card documenting prior years’ performance in both districts.

“We had a lot of huge rocks that needed to be moved,” Villalobos said. “It was all kinds of things that, as an administrator, had never been on my radar.”