October 22, 2018

School Budgets: tracking student funding

The growth of school choice has led to an enhanced focus on school budgets versus district budgets. Increasingly, parents want to know more about how much, if any, of their child’s education funding is used at their school and how much is used at the charter or district central office. Likewise, policymakers and community leaders also want to know where tax dollars intended for students end up and if distribution of funding is equitable for students and their teachers.

The millions of items of data in district and charter budgets make it difficult to discern this basic question and even harder to sort out if those dollars are spent on teachers and other learning priorities. This has led to both federal and state action designed to increase transparency around what is spent at schools and, in Arizona, how this spending relates to each student’s actual funding.

Proposition 301, an education sales tax passed by voters in 2000, required enhanced school reporting. Unfortunately, that information was either averaged data, rather than school specific, or reported out in ways that only finance professionals could understand.

Indeed, the original intent to illuminate school-level budgets fell by the way side during the years of economic growth following Prop 301’s passage. However, in response to the Great Recession, as each education dollar became more precious, focus once again returned to how finite resources were being used at the school level.

What followed was a battery of research documenting inequities in the distribution of student dollars to their school. Some examples of such inequities include funding earmarked for special education or low-income students following more experienced teachers to their higher income schools, as opposed to staying with the special education or low-income students and their school and money intended to fund principal and school-led work was instead being used to support district-wide initiatives. It became clear that some funding was not being used for its intended purposes.

In response, federal lawmakers enacted new laws requiring enhanced transparency surrounding how student dollars are budgeted in low income schools and how it impacts teacher salaries. In 2017, Arizona passed its own school transparency laws which applied to all charter and district schools. House Bill 2385 not only requires information on how much is spent at each school, but also how this spending activity lines up with what a school should expect to receive based on their students’ funding.

Most importantly, it allows parents, principals, and teachers to assess whether or not the full amount of funding has made it to a student’s school, and how it is spent for teachers, classroom supplies and administrative functions.

Beginning in School Year 2020-21, every Arizona school report card must display information on how much student funding the school could receive, how much they actually receive, and how it is spent.

Another innovative modernization in school-based budgeting is the trend towards empowerment of principals over their own school budgets. Most everyone would agree that principals tend to understand best what their students and schools need. However, they often see their students’ resources allocated based on district priorities. For example, sometimes central decision-making forces everyone to use the same reading program—even if students in different schools have different needs. This is an outdated and ineffective model.

Principals and their teams are held accountable for student outcomes, so they should have more control over how to achieve those outcomes, which necessarily includes control over school-based spending. When leaders are empowered to distribute their school’s resources to enact their academic plans, we increase both their potential to be successful and transparency about why and when they are not.

In some cases, larger system budgets may still be necessary, but breaking them down to the school level and ensuring student dollars make it their school can make fairness, transparency, and results for all students attainable for school leaders, teachers and parents. It’s encouraging that this model is being pursued here in Arizona for all district and charter schools.

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