Estimated read time: 4-5 minutes
SALT LAKE CITY — K-12 school enrollment has declined in recent years, and data from a new Kem C. Gardner Policy Institute report says the downward trend is expected to continue over the next decade, carrying fiscal ramifications.
This decline can be attributed to a few different factors, most notably lower fertility rates and demographic changes.
"Declining K-12 student enrollment in coming decades will unevenly affect Utah's communities. Some regions may experience nearly 50% drops while others continue to grow rapidly, requiring tailored responses from leaders across the state," said Andrea Brandley, senior education analyst at the Gardner Institute and lead author of the report.
What the enrollment decline also presents is a chance to relieve the fiscal pressures of funding enrollment growth in Utah's K-12 education system, creating unique chances to increase per-pupil funding and alter other fiscal opportunities, the report said.
A majority of Utah's education funding — 58.4% — comes from the state itself, with 35.3% coming from local funds and 6.3% from federal funding. Additionally, in the state's fiscal year 2024 budget, the Utah Legislature allocated over $5.4 billion to public education, making it the single largest state-funded program.
Still, the National Education Association's 2022 report on teacher salaries and student spending has Utah ranked 50th in the nation when it comes to student spending.
So, how exactly will the school-age population change in the next decade and how will it relieve fiscal pressures?
The report predicts that the decline will result in both a smaller absolute count — about 40,000 fewer school-age youth by 2032 — and school-age youth making up a smaller share of Utah's total population, dropping from 19.5% in 2023 to 15.9% in 2032.
Of course, this will vary by county and district as places like Utah County are projected to continue growing rapidly, while rural areas like Millard County are expected to see a sharp decline.
"Slowing, declining and changing student counts foreshadow major fiscal shifts, with some effects already occurring. Because student enrollment counts drive a large share of school operational funding, enrollment changes can greatly alter school budgets," the report says.
The fiscal relief from a likely declining K-12 population, the report states, provides an opportunity for policymakers to increase per-pupil funding, alter tax levels or divert revenue growth funds previously allocated to public education enrollment growth to other purposes.
Despite Utah's historical challenges when it comes to significantly increasing per-pupil funding, Utah schools have still achieved "commendable" student outcomes, according to the report. With enrollment declines seemingly imminent, the state will have a legitimate chance to increase the dollar investment in every K-12 student.
Another response to flattening or declining enrollment, the report says, would be reducing tax rates.
"If taxable income grows as it has over the past two decades, and the Utah Legislature and local elected officials hold real per-pupil spending relatively flat instead of continuing to invest at historical growth rates or investing at even higher levels, the state could use the difference in funding to reduce its income tax rate potentially further from 4.65% to a rate in the high 3% to low 4% range," the report says.
While income tax has historically been closely tied to education, lawmakers could choose to reduce other taxes, such as sales tax, local property taxes or excise taxes.
The alternative to increasing per-pupil spending or cutting taxes would be redirecting funds previously used for education to other programs.
The report specifically noted examples Utah could redirect funds to, including creating budget buffers offsetting increased revenue volatility, covering increasing Medicaid costs or expanding other health care benefits, increasing state employee salaries, funding transportation and other infrastructure, addressing air quality, enhancing law enforcement, augmenting programs for Utah's aging population, investing in child care or other non-school programs for children, or expanding housing services.
"Utah's overall K-12 enrollment is forecasted to decline over the next 10 years. This demographic shift presents new opportunities to Utah's state and local leaders: raise per-pupil funding without increasing tax rates, alter tax levels, redirect funds to other state priorities or some combination of these options. Equipped with knowledge of approaching demographic shifts, Utah's educational and legislative leaders can make informed decisions and support a bright future for our state," the report says.
The full report can be found here.
