California Schools Stay Open Despite Plummeting Enrollment
Ballooning costs and shrinking student populations have left districts facing financial crises, but political pressures have kept closures off the table.
With a projected budget shortfall of $95 million next year, Oakland Unified School District's (OUSD) latest plan to close schools would trim costly overhead. The district has lost over 2,200 students since the start of the COVID-19 pandemic—six schools have lost at least 20 percent of their enrollment. But school closures are contentious, and a similar attempt failed in 2022 after an uproar led to board members being recalled.
"We need more [schools] not less," protested a speaker at a recent board meeting. While it's unclear why the shrinking district would need additional schools, the vocal opposition made trustees think twice before going on the record, instead punting on a vote to merge ten schools into five.
School closure battles like Oakland's are playing out across California. Statewide, public schools lost 5.1 percent of their students between the 2019–2020 school year and the 2022–2023 school year, and the National Center for Education Statistics projects that they'll lose another 15.7 percent by the 2031–2032 school year. Birth rates are falling, and parents are increasingly seeking alternatives to traditional public schools, such as homeschooling, private schools, and microschools.
But California's public schools have been slow to adapt, according to new data published by Reason Foundation. The analysis examined public school closures in 15 states, including New York, Florida, and Virginia. Overall, total closures across these states dipped in the aftermath of COVID-19, but then returned to pre-pandemic levels in 2023 and 2024.
Notably, school closures in Colorado increased in 2024—exactly what you'd expect in a state that has lost 4.6 percent of its students. But this wasn't the case in California, where closures have decreased in recent years, from 31 school closures in 2019 to only seven in 2024—even fewer than states like Utah, South Dakota, and Iowa.
One reason for this backward trajectory is that K-12 funding has been at record highs, giving public schools little incentive to adjust their size. California's public schools got $23.4 billion in federal COVID-19 relief funds during the pandemic, while non-federal funding increased by $1,691 per student in real terms between 2020 and 2022—the highest growth rate in the country.
School closures are difficult, and these extra dollars could've helped smooth the transition for affected students with tutoring and other support. But many districts, kowtowing to pressure from the teachers' unions, instead spent the windfall on things like teacher pay bumps and hiring new staff.
For instance, Oakland gave its teachers a 10 percent salary raise and a $5,000 bonus after a seven-day strike in 2023. The Alameda County Office of Education—which provides extra financial oversight due to the district's spotty track record—signed off on the deal but warned: "Without further board action and successful implementation of budget-balancing solutions, OUSD is projected to be insolvent within three years."
With federal relief funds expiring and state budget shortfalls, public schools can no longer ignore their fiscal woes. California's Legislative Analyst's Office projects little wiggle room in the state's 2025–2026 budget, with deficits potentially growing to $30 billion by 2028–2029. This means that the generous annual funding increases that California's public schools have grown accustomed to are unlikely to persist. And because state dollars are tied to enrollment, shrinking school districts must spend down reserves and slash budgets to reflect falling revenues.
The bad news for many school districts is that school closures alone won't be enough to balance the books. They'll also need to look at other cost-cutting measures like staff reductions and salary freezes, which teachers' unions will oppose. But the math is simple: fewer students should mean fewer schools. Maintaining under-enrolled schools is costly, spreads resources thin, and isn't good for kids in the long run. California's public schools have punted on these difficult decisions, but the fiscal reckoning has arrived.
