Where Have All The Children Gone?

I recently crashed into a data roadblock when trying to download some NH numbers from the U.S. Department of Commerce's Web site. Instead of my data, there on my monitor was the singular decree, Something Unexpected Has Occurred. It was a data dead end with no Click Here or Next.

What a powerful message! It's the mother of all excuses-defaulting the fault. After several tries I gave up and turned to the NH Department of Education Web site. Although it didn't announce it in so many words, something unexpected has occurred in NH (unexpected by most non-demographers, anyway). Namely, our school-age population has fallen precipitously. New Hampshire's enrollment in grades one through 12 has dropped by 21,600 or 10 percent. It's even more startling when contrasted to the 25,000 school-aged children NH added during the prior decade.

To paraphrase that '60s anthem, Where Have All the Children Gone? Several inter-related factors are at play. The primary reason for the drop is that Baby Boomers' kids (of which there are many) graduated from our local schools in the past decade, only to be replaced by smaller entering classes. The state's overall population growth subsided as well during the past decade, which has a direct effect on enrollment. In the last decade, the state's population grew by 6 percent as compared to 11 percent in the 1990s.

We can also point to the children of baby boomers who are delaying having children, often into their 30s, or choosing to skip the whole child-rearing thing entirely. So what can we do about this erosion of our young population? Essentially, nothing. It's a national phenomenon driven by unavoidable demographic forces and a weak economy.

The Implications

Ahhhhtherein lies the rub. We spend a lot of money on local education in NH-$2.7 billion this year, according to the NH Department of Education. Typically two-thirds of local property taxes are channeled into local education. 

So far, however, we haven't figured out how to translate fewer students into lower spending.  While enrollment was falling during the last decade, spending rose by $1 billion in NH, a 58 percent rise. That is more than twice the rate of inflation. Per-pupil expenditures jumped from $8,700 to just under $15,000 based on state data. State mandates (including kindergarten, special education requirements and raising the dropout age) hamper local schools' ability to rein in costs. Without a radical change in delivery systems, most education costs are fixed-utilities, building maintenance and debt service, to name a few.

School construction and capacity issues also abound. As we began the decade, Baby Boomer kids were wedged into our schools. Many districts responded by building better and larger schools. In the face of declining enrollment, some districts are closing (or considering closing) schools. Those include Keene, Franklin and Concord. Overall, since 2002, we've seen a net loss of eight elementary schools in the state, while the number of middle schools held constant and three new high schools were opened.

Although many people believe smaller classes are a good thing, some of our small communities, particularly in the North Country, may not find it economical to maintain a local school. That would mean first graders suffering through long schoolbus trips to neighboring communities and a dilution of our much-valued local control and community identity.

Changing Communities

I used to carefully keep an eye out for kids playing on the front lawns as I drove through my neighborhood. Now it's more like, Oh, look! A little person! We have far more dogs than kids now.

The U.S. Census Bureau reports that only 30 percent of NH's occupied housing units have children under age 18. Who needs four-bedroom homes when there are fewer and fewer families with school-age children? Will these demographic forces shift demand to small, in-town units and away from big suburban homes? There are signs of that beginning to happen as downtown Portsmouth, Manchester, Keene and Nashua are seeing a renaissance of housing for aging boomers. If that shift grows, the value of the state's residential property tax base (which is 75 percent of the property tax base statewide) could shrink, putting yet more pressure on tax rates.

As budgets tighten at all levels of government, education spending will and should be put under the microscope. New Hampshire students are performing above national averages on most standardized tests and our students are showing modestly improved test results as well. That's good news. We need an educated workforce, but we need to carefully consider if there are more efficient ways to finance local education, given enrollment declines and revenue pressure at all levels of government. 

Russ Thibeault is the president of Applied Economic Research, an economic and real estate consulting firm he founded in Laconia in 1976. He has completed assignments in more than 30 states. He can be reached at russwt@metrocast.net or 603-524-1484.