The Effects of State and Federal Funding on K-12 Small School Consolidation: A Quantitative Analysis and Qualitative Comparison

Erik Muckey


Since 2000, the number of South Dakota K-12 school districts has decreased from 176 to 151, the most pronounced decline since the early 1970s. Meanwhile, at the forefront of South Dakota education is an ongoing discussion of adequate education funding, noted by the recent case Davis, Davis et. al v. South Dakota (2011). Given the decline in school districts and funding concerns, this work considers the extent to which state and federal funding mechanisms are significant factors in small school (K-12) consolidation with particular emphasis on the South Dakota K-12 funding formula.

This paper uses interdisciplinary approaches to develop a holistic view of school finance as it relates to school consolidation, reorganization, or dissolution decisions in the state of South Dakota. Linear probability models (LPMs) are used along with difference-in-means tests to analyze school district data between FY2000 and FY2012, determining which financial and non- financial factors may best explain a district’s decision to consolidate. This quantitative analysis is used in conjunction with interviews of school administrators with prior consolidation experience, creating an unprecedented overview of small school consolidation that bridges statistical inference with practical realities facing South Dakota school districts.