Public school districts across Southern California are losing students and, in the years ahead, will likely face difficult choices about closing schools. Lower birth rates and outmigration have contributed to the enrollment drops. Since the COVID-19 pandemic, families have also increasingly sought public school alternatives such as charter schools, private schools, and homeschooling. Los Angeles Unified School District (LAUSD) has lost 59,249 students since 2019-20, Long Beach Unified has lost 7,746 students, and Santa Ana Unified enrollment decreased by 7,552 students during that span. The National Center for Education Statistics (NCES) expects these downward trends in public school enrollment to continue. It projects statewide enrollment losses of 15.7 percent by the 2031-2032 school year. With decreased enrollment and federal pandemic relief funding expiring, Southern California school districts face severe budget crunches. State and local budgets for the next fiscal year are still being developed, but LAUSD’s projected deficit is $94.5 million, Long Beach Unified’s expected deficit is $54 million, and Santa Ana Unified’s is facing a whopping $180 million budget deficit. School districts facing these massive deficits should be looking to right size. However, new data from Reason Foundation shows that California’s public schools have been slow to respond to the red ink and loss of students. In fact, California has actually closed fewer public schools in recent years. In total, California closed 31 public schools in 2019-2020 but only closed seven public schools statewide in 2023-2024, which is even fewer public school closures than in smaller, rural states like South Dakota and Utah. Today, California has thousands of underutilized schools. Statewide research published by The 74 shows that 1,400 public schools lost at least 20% of their enrollment during the pandemic, 125 of which were in LAUSD. Underutilized schools are expensive to operate and spread resources thin, which isn’t good for students. Generally, public school funding is tied to student enrollment, and fewer students mean fewer dollars. But during the pandemic, California’s public schools got a windfall of federal relief cash, and non-federal funding rose faster than in any other state—by $1,691 per student after adjusting for inflation. California also has a generous hold harmless provision in its funding formula, allowing public schools to collect funding for students they had in previous years but who are no longer at the schools—known as “ghost students.” A Reason Foundation study estimated that California funded 401,00 ghost students in 2022-2023, costing taxpayers $4 billion. Together, these policies insulated public schools from making difficult budget decisions like closing underutilized schools, even allowing them to give in to teacher union demands for salary increases and bonuses. For example, LAUSD—which got billions in federal COVID relief funds—gave teachers a 21% hike pay hike in 2023 and doled out pay bumps to counselors, psychologists, nurses, and others. Related Articles Commentary | The Unbearable Incompetence of Government Commentary | Ken Calvert: A more prosperous and secure America Commentary | Our world needs more people volunteering in their communities Commentary | Commitments to colorblindness and merit are not Trumpian extremism, they’re common sense Commentary | The Heritage Foundation, like much of the right, has lost its way With federal relief dollars expiring and a bleak state budget outlook, school districts are beginning to face fiscal reality. California’s Legislative Analyst’s Office estimates that the state’s budget deficit could grow to $30 billion by 2028-2029, which would put future K-12 funding increases in jeopardy. Statewide, inflation-adjusted public school funding grew by 59% per student between 2002 and 2022, but declining enrollment puts schools in unchartered waters. School closures are difficult and politically fraught, and they will not alone balance school district budgets. However, they are critical to properly serving the students still in public schools, right-sizing spending, and reaching fiscal sustainability. State policymakers should shine a light on the problem by requiring the state to collect and report on vacant and underutilized school buildings annually. That way, taxpayers and other stakeholders can hold public schools accountable for being good stewards of public resources. For their part, local policymakers must tackle enrollment declines and school closures head-on and resist attempts to delay or block plans to reduce their facilities footprint. Ultimately, California’s public schools must prioritize the students still in them, which will require closing schools and making other difficult decisions such as staff and programmatic reductions. Aaron Garth Smith is the director of education reform at Reason Foundation.