New Guide for States to Improve Public School Funding

For those intrepid enough to dive into the complex and confusing world of school finance, ExcelinEd’s new Student Centered State Funding: A How To Guide for States is an exceptional outline to learn about the benefits of student-based funding.

Student-based funding is a clear, logical way to maximize the efficiency of funding and equitably finance school districts. A base amount of funding is granted to each student that follows them to any district they choose to attend. The amount is increased for students with disadvantages, such as those in special education programs or in poverty.

The amount that funding increases for disadvantaged students in a student-based funding model is determined by a multiplier. Let’s say (using hypothetical base funding and multipliers for this example) that the base funding for an average student is $5,000. If the student in question was an English language learner, then we would increase the multiplier from 1 to 1.5. Now, the student would receive (1.5 x 5,000) $7,500 in funding. Disadvantaged or not, whatever district the student chooses to attend, the funding will follow.

In the creation and maintaining of a student-based funding plan, ExcelinEd emphasizes five steps:

  • Establish a base funding amount that every district receives for each student served. To increase the percentage of funding in your state that is student-centered, a key strategy is to collapse the many existing separate funding programs into the base.
  • Require local funding for a district on a per student basis, such that the total local contribution will go up and down based on student enrollment.
  • Structure all funding for students with special needs or disadvantages as a weight, or multiplier of the base, for each student that district serves. As these students change districts, the additional funding should fully follow them.
  • Adjust funding for districts each year based on the number and characteristics of students they are serving.
  • Remove restrictions on how districts spend money, relying instead on accountability and financial transparency to ensure that the needs of all students are met.
  • “Increase the proportion of education funding that is student-based.” (ExcelinEd, Student Centered Funding: A How to Guide for States, 2017. Page 1)

School finance is traditionally riddled with layers of terms and variables that obscure financial transparency. The complexity of the formulas can make the inquirer feel like a five-year-old just beginning to learn math, but it doesn’t have to be that way. Student-based funding is an accountable system that, while it does have its complexities, is generally a more straightforward approach to budgeting.

Districts often complain that student-based funding is inconvenient. But, as Ben DeGrow notes in his paper Colorado Student-Based Budgeting on the Rise, “school districts, like other government agencies, tend to utilize systems that provide simplicity and convenience for administrators and central operators. Rigid formulas and policies dictate the path and purpose of far too many funds, sacrificing measures of efficiency and informed decision-making.”

Student-based funding is a commendable step in the right direction, but there is a solution which takes the philosophy of funds following students one step further–backpack funding. Backpack funding shifts funding from following students to the district they attend, to the school they attend. In other words, the funds “backpack” with the student to the exact school they desire. Using this method, students are granted further choice, and local districts are relieved of pre-allocated funding stipulations. Both students and districts have even more freedom to use funding to best achieve their educational goals and needs.

School funding (adjusted for inflation) has more than doubled in the last handful of decades, yet test scores are stagnant. Even a 50-year-old mathematician or financier would get lost in the patronizing intricacy of today’s school budgeting, while even a five-year-old could see that throwing more money into this poorly organized system is not working. In the clouded realm of school finance, the one thing that is clear is that the funding should follow the student, not the administrator.