A recent report from the Education Law Center — Is School Funding Fair? A National Report Card — rated states on their funding for schools based on four “fairness indicators”: funding level, funding distribution, state fiscal effort, and public school coverage. The results were troubling for anyone concerned with improving our public schools (Baker, Sciarra & Farrie 2010). ELC executive director David Sciarra (2010) writes that the ratings for most states
cast serious doubt on the capacity of the nation’s high-poverty schools to undertake and sustain necessary improvements.... Many states do not provide sufficient funding or distribute that funding to address the needs of their most disadvantaged students and schools.
Districts will receive no stimulus funds this year from the federal government, either. In this challenging economic environment, distributing funds equitably and transparently is especially important. Given the many sources of inequity inherent in traditional school funding formulas, what would be fair?
This question is complex, even when we focus solely on financial equity (leaving out more complicated questions like equity of opportunity). The way that school districts traditionally develop budgets for schools is confusing and disempowering and often leads to inequities. Accounting practices such as using average teacher salary to “cost” out staff, special programs such as magnet schools, special student populations, and physical plant differences can make per pupil expenditures vary greatly by school, even within the same district. For example, in New York City in 2005, classroom spending averaged $4,642 per student but ranged from a low of $2,511 to a high of $8,569, a difference of up to $6,058 per pupil (NYC IBO 2007, p. 1).
Student-based budgeting formulas, which allocate actual dollars directly to schools based on each one’s particular mix of students, have the potential to address key equity issues. The Annenberg Institute first looked at the potential of student-based budgeting in 2002, as part of our initiative School Communities that Work: A National Task Force on the Future of Urban Districts (AISR 2002). Since then, many districts have found that matching funding at the school level to the specific attributes and needs of students — such as low-income, disabled, gifted, vocational, or bilingual — provides greater flexibility and equity. A recent issue of AISR’s journal Voices in Urban Education, produced in collaboration with Education Resource Strategies, describes some of these experiences.
Traditional budgeting methods do recognize that additional funding is needed for students with particular characteristics. But these funds form part of a complex mix of funding streams that often do not reflect the priorities or plans of school and district leadership. According to the ELC report (Baker, Sciarra & Farrie 2010):
The current system of education funding is a maze of intricate formulas from three levels of government: federal, state, and local. (p. 6)
Each governmental unit has a set of allocation policies and spending priorities. Allocation policies at different levels work together or in conflict to affect what is ultimately spent on different student types. (p. 3)
Average expenditure per pupil is widely used as a common metric to evaluate equity in funding — and it's easy to calculate. But this average figure sometimes masks substantial inequities. Roza, Guin & Davis (2008) posit that a second metric is needed that reflects the relative portion of funds in a given district that are allocated to students with different needs. For a mix of districts in four states, they calculated implicit “weights” reflecting what portion of its budget each district actually spends on each type of student in different schools. The researchers found extreme variations that defied logic.
In contrast to this haphazard, unintentional, and implicit weighting that is the product of traditional funding formulas, student-based budgeting starts with explicit weights for each type of student. The weights can vary, allowing districts to align their investments with their instructional priorities. When we spoke to Matthew Hornbeck (2010), principal of Hampstead Hill Academy, a Baltimore City Public School, he emphasized how student-based budgeting empowers schools to make decisions that make sense for classrooms, teachers, and students:
It has been part of an overall comprehensive effort to provide schools with the power and control and autonomy to make decisions that are good for teaching and learning. (p. 26)
The specific weights used in student-based budgeting are critical. How much more does it cost to educate that English language learner, or that student with special needs, or that gifted and talented student? How do districts determine the appropriate base amount?
These are not easy questions to answer. But now that many large urban districts — New York City, Houston, Los Angeles, Baltimore, and Philadelphia, to name a few — have transitioned to student-based budgeting, there are some examples that can be studied. Education Resource Strategies (2010) recently published the basic budgeting and weights used by nine districts. Weights for poverty, for example, ranged from an additional 8 percent over the base amount to 24 percent over the base amount. The range in weights for English language learners was larger, from a low of 10 percent over the base amount to a high of 50 percent over base (pp. 10-11). Are these weights too low, too high, or just right? We don't have solid data to answer that question. And of course, student-based budgeting deals with the distribution of existing funds, not their overall adequacy for supporting learning. Still, the various weights that different districts have applied should provide insights into what it takes to educate students with varying needs.
The equity, autonomy, and transparency that student-based budgeting can provide do not automatically make schools and districts better. The ultimate success or failure of urban districts is still inextricably connected to their ability to build and mobilize the capacity of teachers, principals, and other key adults to support students’ learning and development. However, with the necessary supports, student-based budgeting can serve as one building block of a powerful systemic reform initiative by equitably distributing resources so that allchildren in a district have a fair chance to meet the challenging standards to which they deserve to be held.
Annenberg Institute for School Reform. 2002. Portfolio for District Redesign. Providence, RI: Brown University, AISR.
> Available online
Baker, B. D., D. G. Sciarra, and D. Farrie. 2010. Is School Funding Fair? A National Report Card. Newark, NJ: Education Law Center.
> Available for download
Education Resource Strategies. 2010. Fair Student Funding Summit: Conference Proceedings and Recommendations for Action. Watertown, MA: Education Resource Strategies.
> Available for download
Hornbeck, M. 2010. “A Principal’s Perspective: Empowerment for Schools,” Voices in Urban Education 29 (Fall).
> Download pdf
New York City Independent Budget Office. 2007. Fair Student Funding: Making It Work for You and Your Students. New York: New York City Department of Education.
> Download PDF
Roza, M., K. Guin, and T. Davis. 2008. What Is the Sum of the Parts? How Federal, State, and District Funding Streams Confound Efforts to Address Different Student Types. Seattle, WA: Center on Reinventing Public Education, University of Washington.
> Available for download
Sciarra, D. 2010. “School Funding Is Unfair in Many States,” Huffington Post (November 2).
> Available for download