Shrinking Budgets, Fewer Students: How District Leaders are Navigating a New Landscape of Reduced Resources and Competitive Pressures

Tia Clinton, Benjamin K. Master, Lydia R. Rainey, AK Keskin:

Key Takeaways

• Budget shortfalls have become the top challenge U.S. public school district leaders are facing in 2026, with 54 percent of survey respondents ranking it in their top three concerns—up from 33 percent in 2025.
• Declining enrollment is also increasingly a concern among survey respondents, especially for leaders in rural districts.
• Interviewed leaders pointed to the loss of federal COVID-19 relief funds, rising costs, and state and local revenues that have not kept pace as the primary drivers of budget shortfalls.
• Leaders indicated that budget cuts have worsened other challenges in their districts, such as ensuring adequate staffing and improving reading and math achievement.
• To increase enrollment, school districts are competing for students: About 40 percent of survey respondents said that their districts are considering marketing campaigns, 33 percent are considering expanding pre-kindergarten (pre-K) services, and a similar share are considering offering new extracurriculars (e.g., sports, out-of-school programs). 
• In the face of continued enrollment decline, many public school districts will need support both to plan for long-term downsizing and to identify and invest in the services that can help them better attract and retain families.

Public school districts nationwide are navigating compounding challenges that are forcing hard decisions and placing growing pressure on leaders to adapt. In our spring 2026 American School District Panel (ASDP) survey data, we observe major shifts in the top challenges district leaders are facing, compared with 2025 survey results. Specifically, budget shortfalls and declining enrollment have risen to the top of district leaders’ concerns, even as other long-standing challenges remain pressing issues.

In this report, we examine how these challenges are affecting districts nationwide, drawing on survey findings from a nationally representative sample of public school district leaders and follow-on interviews with 38 district leaders across the United States to learn more about how they are responding to these challenges. This work is intended to provide national, state, and local policymakers—as well as the general public—timely information regarding the condition of public school systems nationwide and help inform decisions related to school funding, instructional improvement, and community engagement.