That’s the title of a cautionary tale posted last week by Chad Adelman on the web site, The 74 Million.  Adelman tells the story of how bad decisions and incompetence saddled the San Francisco Unified School District (SFUSD) with significant budget problems and brought on heavy oversight from the State of California. SFUSD’s litany of problems is long and serious. It includes having an understaffed budget office, leading to inadequate control over its payroll system, paying for employee positions with one-time federal funds, not adjusting student enrollment projections to account for student declines, refusing to seek other revenue streams and a failure to track monthly attendance data which overstates daily attendance in projecting future revenues.

Last year these developments prompted the California State Department of Education’s Fiscal Crisis Team to review all fiscal budgets to ensure the solvency of the district.  Last December the district was put on qualified notice of budget problems.  That notice shifted to “negative’ in May when the district was informed that it was spending more money than it was taking in. That status prompted yet more state oversight.

The natural reaction of many to this news is probably a shake of the head and to snicker “ well, that’s California”.  While North Carolina and California have significant differences, what we shouldn’t dismiss is that North Carolina faces the same trends and factors that led to SFUSD’s current problems. These include:

Declining Enrollment. While enrollment in North Carolina charter schools is up almost 40,000 students since 2019, enrollment in traditional public schools over the same period has declined by about 50,000 students. Those number impact school revenue. Public schools need to be concerned not only about long-term demographic changes but also how school choice options will likely impact short- and long-term enrollment trends.

Paying for Additional Staff.  According to the North Carolina Department of Public Instruction, since 2019, North Carolina public schools have added a net 1,735 new staff, including 635 school administrators.  The influx of federal aid for covid relief has helped to add over 3,700 new federally funded positions over the same period.   That funding ends in September. Districts will have to either find another way to pay staff or lay them off.

Staffing Ratios.  Districts have been slow to respond to demographic changes and change staffing ratios. Without an adjustment that reflects current changes, schools will be saddled with additional costs that will be unsustainable.   

More non instructional staff hired and administrators. Since 2019, public schools have hired almost 2,200 new professional staff at a time when enrollment in traditional public schools has been in decline.

Declining enrollment is a reality that most traditional public schools in North Carolina and across the country will have to face.   The unwillingness of many school districts to resize instructional and administrative staff, can have disastrous consequences. .School board members would do well to buckle up and learn from SFUSD.  If school districts aren’t proactive in confronting these challenges, it could get very bumpy.