At first glance, declining school enrollment might not seem like a crisis. Fewer students means fewer classrooms, fewer teachers, fewer expenses. But as Davis and districts across California are discovering, the financial reality is far more damaging—and far less intuitive.
As DJUSD Superintendent Matt Best explained in a recent interview with the Vanguard, “The financial loss from declining enrollment is the inverse of economies of scale. When a district grows, revenues grow faster than variable costs. But when a district shrinks, the loss of revenue is greater than the savings. The numbers don’t balance.”
This structural imbalance is no small accounting problem—it’s an existential one. According to a 2020 report from the Public Policy Institute of California (PPIC), declining enrollment is rapidly reshaping the financial landscape for public education.
In counties across the state—including Los Angeles, Santa Clara, and Sonoma—school districts are bracing for 15% or greater drops in enrollment by 2028. Davis is already on that path.
In DJUSD, the challenges are especially acute. Davis has seen enrollment drop by more than 1,200 students since its peak, and with birth rates falling and housing costs climbing, there is no demographic relief in sight. The district has already begun community outreach, warning that without major intervention, school closures and program cuts could be on the table.
The PPIC report, Declining Enrollment in California Schools, lays out the financial math in stark terms. When a district loses 100 students—at an average funding level of $12,600 per student—it forfeits $1.26 million in state revenue. But the savings from reducing four classrooms’ worth of staff and supplies? Just $611,000.
That leaves a budget gap of $649,000—every single time a district loses 100 students. The shortfall comes from the fact that many costs in education aren’t easily scalable. You can’t lay off a quarter of a principal, or half a school nurse. Facilities must still be maintained. Utility bills remain. And staffing cuts often follow “last in, first out” policies, which can increase average salaries as younger, lower-paid teachers are the first to go.
This is the central paradox of declining enrollment: the fewer students a district serves, the more costly each student becomes. Per-pupil spending may go up, but overall budgets go down. In the long run, this is unsustainable.
Superintendent Best has been candid about the consequences. “We cannot right-size our district in a way that maintains quality programs for students without new enrollment,” he said. “There’s no version of this that doesn’t involve hard choices.”
Already, Davis has begun preparing the community for the possibility of boundary changes and school consolidations. Best has framed the issue not around any single development or neighborhood, but around the future of the district as a whole. “This is not about one housing project. This is about the structural ability of our district to offer AP courses, music programs, languages, and electives.”
And indeed, the pressure isn’t just financial. When enrollment drops, schools risk losing critical mass. Fewer students can mean canceled courses, larger class sizes, and a narrower educational experience. For a district like DJUSD, which prides itself on offering a wide array of enrichment opportunities, this is an identity crisis as much as a budgetary one.
In California, declining enrollment is driven by three main factors: declining birth rates, out-migration due to housing costs, and changing family patterns. In a high-cost city like Davis, the effect is magnified. Young families are priced out, students graduate and leave, and fewer residents have school-age children.
And while some argue that the district should adapt by downsizing, the PPIC report makes clear that cutting costs is not so simple. The average district with sustained enrollment loss sees a 30% drop in student numbers within a decade—but cannot proportionally reduce expenses. Instead, they enter a cycle of fiscal erosion.
School closures, once seen as a last resort, are becoming increasingly common. But even that is not a panacea.
The PPIC notes that “short-run savings from closures are often smaller than expected,” especially after factoring in the cost of maintaining shuttered facilities and community opposition.
Davis has long been known for its commitment to high-quality public education. But if enrollment declines continue—and if the City does not address the underlying drivers, particularly the shortage of affordable and family-sized housing—then the very fabric of the district is at risk.
Some have argued that the school district should not shape land-use decisions. But the reverse is already happening: land-use decisions are shaping the school district. The absence of affordable housing, coupled with resistance to new development, has made it increasingly difficult for young families to live in Davis. The result is a shrinking school-age population and a district under duress.
It’s not just about buildings and budgets. It’s about the capacity to deliver the kind of education that residents have long taken for granted. As one parent recently told the School Board, “This isn’t about one school or another—it’s about whether we’re still the kind of community that invests in our kids.”
While some state policies offer temporary buffers—such as the “hold harmless” provision that allows districts to receive funding based on the previous year’s attendance—these are short-term solutions. In the long run, only two strategies will stabilize enrollment: increasing the number of school-age children living in Davis, or drastically restructuring the school system.
The first option requires housing. That means building new homes that families can actually afford—not just luxury condos, but attainable homes with enough space for children. Without that, the second option becomes inevitable: fewer schools, fewer programs, and a slow erosion of the public education system Davis has spent generations building.
The fiscal crisis of declining enrollment is not hypothetical. It’s already here. The PPIC warns that “most districts with multi-year declines do not see enrollment stabilize” and that per-student revenue cannot make up for lost economies of scale.
The question facing Davis is not whether to respond—it’s how. Will we take proactive steps to make the city livable for families, or will we allow our schools to shrink into unsustainability?
Superintendent Best put it plainly: “It’s a matter of will.” And the will must come not just from the district, but from the entire community.
From article: “At first glance, declining school enrollment might not seem like a crisis.”
It doesn’t seem that way upon second or third glances, as well.
You know what it seems like? An oversized, self-interested organization that is advocating for sprawl (so that it doesn’t have to downsize). An organization that is supposed to serve the community; not the other-way around.
“ An organization that is supposed to serve the community; not the other-way around.”
But you’re missing the obvious implication of your own statement
I am not missing anything.
The community does support the district, but should not be expected to maintain an oversized system.
It’s as if there was less crime (and less need for police officers), fewer fires (and less need for firefighters), but with both of those departments advocating for sprawl so that they can maintain their current staffing levels and facilities.
Your analysis falls flat when you fail to consider symbiosis or when you draw false analogies to other services
How so?
This will be my last comment for awhile.
(1) It is true that schools serve the community, but they can only serve the community to the extent that they are effective in doing so, and therefore a community that also serves the schools, will have better schools.
(2) Fire and police are not good analogies, because fire is not funded more when there are more fires nor are police funded more when there is more crime. (Obviously if you have more fires or crime, the community may choose to devote more resources – but ultimately the goal is to have less crime and fewer fires and thus a safer community). Obviously such an analogy doesn’t work as more children are not undesirable or a goal to reduce. So the analogy falls apart because of its absurdity.
Think on this, and we can return to it later.
Regarding your first point, there doesn’t actually seem to be one in regard to the issue at hand (an oversized school system).
Regarding your second point, you repeated the exact point I made. That is, the resources dedicated to any department is largely dictated by “need” of a community, and can increase or decrease. I have not seen any other example of a department advocating for sprawl so that they don’t have to reduce staff or facilities.
Regarding “desirability”, it is “desirable” to have fewer fires and less crime. That is the desirable outcome (and the reason that we have police and fire services). But if the need becomes less, so does the need for those services. And vice-versa.
This is true regardless of the type of service provided.
A better comparison for YOU to make would be the “undesirable” outcome of having kids remain uneducated, which obviously isn’t going to happen if Davis rejects the argument that it must continue sprawling for the sake of the school district.
And again, unless young people move to Davis for the purpose of having kids (that they wouldn’t have elsewhere), what you and DJUSD actually advocate for is “fewer” students in other districts. In other words, you don’t seem to care about the impacts (that you and the district describe as “negative” in regard to having fewer students) in OTHER districts.
It’s even more evidence of self-interest.
“From article: “At first glance, declining school enrollment might not seem like a crisis.”
“It doesn’t seem that way upon second or third glances, as well.”
LOL, I guess a crisis is in the eye of the beholder.
“In counties across the state—including Los Angeles, Santa Clara, and Sonoma—school districts are bracing for 15% or greater drops in enrollment by 2028. Davis is already on that path.”
So Davis isn’t an outlier but part of the norm. It’s time to face reality and downsize.
“The PPIC report, Declining Enrollment in California Schools, lays out the financial math in stark terms. When a district loses 100 students—at an average funding level of $12,600 per student—it forfeits $1.26 million in state revenue. But the savings from reducing four classrooms’ worth of staff and supplies? Just $611,000.”
There are at least three major problems with the above statement.
(1) The $1.26 million is lost regardless. That ship has sailed, and the revenue loss is something that the District has no control over. It is a societal demographic reality that literally circles the globe. Declining birth rates and declining family sizes from sea to shining sea … from the redwood forests in the northwest to the gulf stream waters in the southeast.
(2) Any amount of costs savings is independent of the revenue loss. That amount can be $0 right on up to your cited $611,000, and even higher than $611,000.
(3) closing individual classrooms within a school is incredibly inefficient. As you yourself have pointed out, that approach leaves fixed costs in place. Closing an entire school and distributing the students of that school to other schools and classrooms within the District is a much more efficient and cost effective approach. The fixed costs for the Administration of that facility/school are reduced. With no school there is no need for a Principal, etc. The building can be disposed of or redeveloped. In a community desperately needing infill housing think of the number of units a repurposed school site would support. Can you say Grande? Can you say Sterling 5th Street?