CHICAGO -- Declining enrollments and the growing inability of many rural school districts to support their schools financially will lead to an increased number of Midwestern school district consolidations in coming years, school officials say.

Some states, such as North Dakota, South Dakota, Illinois, and Iowa, are in the beginnings of a consolidation movement -- partially fueled by state financial incentives -- that could significantly decrease their number of school districts.

Other states, such as Michigan, Minnesota, and Ohio, have seen little consolidation activity in recent years, but some officials said their time could be coming as the finances of small school districts are becoming increasingly strained.

Most Midwestern state laws regarding school consolidation stipulate that any outstanding bonded indebtedness of merging districts remain the responsibility of the taxpayers of the original district that incurred the debt, although merging districts can work that out between themselves.

However, outstanding bonded indebtedness generally is not a major issue among merging school districts, according to Tom Decker, director of school district finance and organization for the North Dakota Department of Education.

"Most of these districts have had declining enrollments for decades, so they have not had the need to issue debt to build schools or make improvements," he said.

Financial Incentives

Nort Dakota probably has the most ambitious school consolidation movement in the region. Of the state's 280 school districts, 109 are in the process of consolidating. Mr. Decker noted that half the state's 120,000 students are enrolled at the 12 largest school districts, while the other half are spread over the remaining 268 districts.

In 1989, the state instituted financial incentives to encourage those districts to merge to form school districts with at least 600 students. Districts that agree to merge can receive a state aid bonus of $165 per student for five years.

Also encouraging district consolidations are tougher state university enrollment requirments. These requirements are forcing some districts to merge to ensure that they can provide the necessary science, mathematics, and foreign language courses their students will need to enter state universities, Mr. Decker said.

South Dakota in 1987 instituted a program to encourage school districts to merge, according to Danette Zickrick, information officer for the state Department of Education and Cultural Affairs.

"We're taking a carrot-and-stick approach," she said.

The carrot is additional state aid for districts that merge, she said. The stick is a total cutoff of state aid for school districts where enrollment falls below 35 students.

"It's tough to offer the necessary courses to prepare a student for college if a district only has 20 students," Ms. Zickrick maintained.

It can be tough, though, for school district leaders and members of a community to agree to a merger for emotional reasons, according to Bob Harris, director of communications for the Michigan Department of Education.

"For many small communities, the schools are the only things they have left, the only things holding them together," he said. "The people there think if they give that up, they'll cease to be a community."

Mr. Harris cited a 1990 report by the Citizens Research Council of Michigan as evidence of public antipathy to consolidating their school districts. Between 1970 and 1990, total state school enrollment declined by 525,000 students, but

School District Consolidation

Differences in the number of school districts within midwestern states between 1981 and 1991.

STATE 1981 1991 CLOSED

Illinois 1,011 956 55

Indiana 305 296 9

Iowa 443 430 13

Michigan 575 562 13

Minnesota 434 423 11

Missouri 548 541 7

Nebraska 1,097 845 252

North Dakota 326 280 46

Ohio 616 612 4

South Dakota 196 183 13

Wisconsin 433 428 5

Source: State education departments. only three kindergarten through high school districts were merged into other districts, according to the report.

He added that recent consolidations in the state have involved elementary districts merging with high school districts.

The case is similar in Wisconsin, according to Don Schneider, school organization consultant with the state Department of Public Instruction where the number of school districts only decreased by five in the past 10 years, to 428 from 433.

Mr. Schneider noted that there is no state cap on the property tax rate that school districts can levy, so many shall districts continue to raise their tax rates as property values decline in order to keep their school systems afloat.

"People will tax themselves to the limit to keep their schools," he said.

Still, these states are encouraging consolidation despite the opposition.

In Illinois, the state will fund the difference in teachers' salaries between two merging districts to encourage consolidations, according to John Dee, manager of the school organization and facilities division in the state department of education.

Nebraska's open enrollment program that began last year also likely will encourage consolidation of small districts, according to Alan Warner, program director.

The percentage of the state's 270,000 students that will be allowed to enroll in the school district of their choice will be raised in increments over the next two years. In 1993, all students will be eligible for the open enrollment program, and bring their per capita state aid with them to their new schools.

Mr. Warner said the motivation behind the open enrollment program is to offer more educational choice to students. But he also said an added effect could be that smaller districts will seek to consolidate.

The number of school districts in the state has been steadily declining for the past 10 years, to 845 today from 1,070 in 1981, according to state records.

Worried Parents, Fiscal Strain

Guy Ghan, reorganization specialist for the Iowa Department of Education, said Iowa does offer financial incentives for small districts to consolidate, but that in many cases younger parents are the driving force in communities for consolidation.

"We're seeing a lot more parents concerned about the ability of their schools to offer their children all of the things larger schools can," he said.

Mr. Ghan added that he thinks the growing number of financially stressed school districts will increase the pace of consolidation in Iowa in coming years -- to about 20 a year -- after few consolidations took place in the 1970s and 1980s.

Missouri has 56 financially troubled districts, according to John Jones, director of data for the state department of education, but no incentives for school consolidation at this time.

Minnesota experienced a surge last year in consolidations, with eight districts joining with other districts after only three had done so in the previous nine years, according to Bob Buresh, management analyst for the state department of education.

Financial pressures on smaller school districts will force states that do not offer incentives for consolidation to consider them, state officials said.

James Van Keuren, director of the division of school finance for the Ohio Department of Education, said the state will soon have to consider mandating some school consolidations.

"We have 60 school districts that cannot support themselves, and never will be able to again in the future," he said. "I would say in the next couple of years we are going to have to address this issue."

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