An expansion of school choice and inconsistencies in voter support are among the top factors impacting the outlook for K-12 public schools five years after the onset of the COVID-19 pandemic, according to a Moody’s Ratings report released Thursday.
State legislation helped drive growth in school choice — whether that be through charter schools, private school voucher programs or open enrollment between public school districts — since the pandemic. These efforts, the report says, have added to enrollment challenges facing the sector in the form of falling birthrates and domestic population shifts, as well as new federal immigration policies that could further harm public school enrollment.
Charter schools, which have seen their share of K-12 public school enrollment grow from 4% in 2011 to 7% in 2021, expanded their footprints in many states between the 2019-20 and 2023-24 school years. But perhaps more notably, the states with private school education savings account programs ballooned from just four prior to COVID to 18 as of 2024. Furthermore, the Moody’s report says, more of these ESA programs are becoming universal, lacking requirements around factors like income or disability for families and students to participate.
Shrinking student bases and increased political polarization are also contributing to inconsistent voter support for tax increases to finance school operations or debt, the report finds. This trend is more pronounced in states where school districts are less dependent on property taxes, which provide consistent compounding revenue growth, Moody’s says.
In Ohio, voters approved just 51% of school tax issues in November, down from 70% year over year. And in Michigan, only 49% of qualified school bond proposals won approval.
