Washington expects lower K-12 enrollment, rising costs through 2025

(The Center Square) – K-12 enrollment is expected to remain below 2016 levels through at least 2025, according to the Washington State Caseload Forecast Council’s June caseload forecast.

Nevertheless, the Office of Financial Management estimates the new forecast will increase state general fund costs by more than $200 million in 2021-23 and about $500 million in 2023-25.

The CFC is charged with forecasting entitlement caseloads in the areas of not just education, but also corrections, public assistance, children’s services, medical assistance, and long term care.

The new forecast for enrollment in common schools is essentially the same as the February forecast, with two additional years.

“So, for K-12, the assumptions in the February forecast remain,” said Paula Moore, CFC senior forecaster, during Wednesday’s virtual meeting. “These were the assumptions both in the November and February forecasts, so it’s tracking well.”

But school enrollment is not expected to return to pre-COVID-19 levels for at least the next several years.

According to the June forecast numbers, enrollment for the 2024-25 school year is forecast to be 1,037,337, which is below the 2016-17 school year enrollment of 1,079,421.

“In 2020-21, Common Schools enrollment declined year-over-year by 3.7 percent due to concerns about COVID-19 and remote/hybrid schooling,” the forecast states. “Some families opted for home-based instruction, private school instruction, or delayed their child’s enrollment in kindergarten. Additional families may have relocated out-of-state. Finally, immigrants moving into Washington State significantly dropped.

“In 2021-22, total enrollment remained flat. Kindergarten and 1st grade public school enrollment rates improved from those of the prior year, though not to pre-pandemic rates. Further, year-over-year declines occurred in grades 4-8 as well as grade 10, Running Start and Open Door. The forecast assumes a shift in the enrollment trajectory. Enrollment will rise less than one percent in 2022-23, followed by limited growth in the 2023-25 Biennium due to declining birth rates and smaller age cohorts progressing through the K-12 system.”

The CFC expects utilization of the College Bound Scholarship Program to continue declining through the 2023-24 school year. The June forecast is 3.3% lower than in February. Likewise, utilization of the Washington College Grant is now forecast to be 4.3% lower than in February and is expected to decline in each year.

“So we know that inflation is high,” Moore said. “We know that the labor market is incredibly tight. And that has created a real high opportunity cost to go to college, especially for our low income families.”

The OFM estimates the June caseload forecast will increase general fund costs by $220.6 million in the current biennium. Of that, $165 million is related to Medicaid.

“You know, we saved an awful lot of money in the underlying budget because a lot of people didn’t come to get the services that they would normally get, and so that was a big savings,” OFM Director David Schumacher said. “We knew that it was a short-term savings, or at least we hoped that it was a short-term savings. And of course I’m not sure it’s a good thing that people didn’t get those services. But in terms of the budget, it saved a bunch of money.”

That won’t continue, he noted.

“Going forward, we have to make sure that – we’re going to see this in a lot of these budgets, where folks are coming back in and those costs are coming back into the budget,” Schumacher said.

Near the meeting’s end, Schumacher said the forecast’s impact will be an increase of approximately $500 million in general fund costs in the 2023-25 biennium. More detailed numbers will be available in November, he added.

“The costing sheet only reflects the estimated cost impacts (up or down) for the latest projected caseload changes,” OFM Communications Director Ralph Thomas explained in an email responding to The Center Square asking if these higher budget costs assume continuing to backfill for the loss of K-12 enrollment.

in 2021 and 2022, the Legislature appropriated enrollment stabilization funds for districts that lost enrollment compared to 2019-20 school year.

“As you can see, the bulk of the $220.6 million in cost impacts are for projected increases in medical assistance (Health Care Authority) and TANF [Temporary Assistance for Needy Families] caseloads,” Thomas said, “and a rate increase for Working Connections Child Care centers.”

He concluded, “The $500 million David mentioned is a very preliminary estimate of how the latest caseload changes will impact the 2023-25 biennial budget.”

All the news wasn’t negative on the education caseload front.

“We do expect a slight rise next year in Running Start due to inflation,” Moor said. “We think that Running Start will be one of those programs that people looking for cost savings will go back to.”

Some 600 more Running Start students are expected next year.

Approximately 400 more students are also expected to take part next year in the Open Doors Reengagement system, Moore said, that provides education and services to older youth, ages 16 to 21, who have dropped out of school or are not expected to graduate high school by 21.

Bilingual education foresees a 3.2% uptick next year due to an expected increase in Ukrainian refugee children who will enter the program, Moore said.

“We are assuming around 3,600 children will enter,” she said, adding more data will be available this fall.