SECTION 1. The department of elementary and secondary education shall conduct a feasibility study of establishing an adjustment to the formula for aid to be allocated to school districts with low or declining enrollment as a component of the foundation budget process. The study shall examine the impact of fixed labor and material costs that do not vary relative to the number of students on the ability of schools with low or declining enrollment to provide a quality education to their students. The study shall consider options for a formula adjustment, including use of a low or declining enrollment adjustment factor applied in a manner similar to the wage adjustment factor. The study shall examine the feasibility of such a formula applied to a range of districts, including pre-K to 12 or K-12, non-vocational and non-charter school districts with enrollments of 1,300 students or fewer. The study shall also evaluate how a low or declining enrollment adjustment factor would impact schools receiving rural school aid under item 7061-9813 of chapter 154 of the acts of 2018. The department shall report the results of the study to the chairs of the joint committee on education and the house and senate chairs of the committees on ways and means, on or before January 1, 2020.
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