A Sea Change for School Funding in America

In the United States, we are in a great transition period, moving from funding institutions to funding students. K-12 education funding, across multiple sectors, is moving closer to how we fund higher education in the United States. We are moving away from a system funded by local resources and driven by residential assignment to a system where funding is driven by parental choice and put in the child’s rhetorical “backpack.”

At Learning Matters an affiliate of PBS Newshour, I make the case in an online debate on school funding that “money should follow students.” I reprise the my point in the debate below, but go to read the debate to see what other education experts have to say.

In 2011, there are now 26 school voucher and tax credit programs in 15 states with close to $1 billion in school funding following students to schools. There are more than 2 million students enrolled in charter schools with more than 100 cities with 10 percent or more charter-school market share. In New Orleans, for example, 80 percent of students are enrolled in charter schools with money attached to the student and following the student to the school of choice.

Taking this even one step further, with the growth of digital learning and the need to customize education at all levels, we are beginning to see examples where not only will school funding follow students to the school, but to multiple education-service providers. In Utah, for example, the Statewide Online Education Program allows high school students to select courses from multiple high-quality course options and multiple course providers, while still being enrolled in their public high school. The money follows the kids to the course selection. In April 2011, Arizona Governor Jan Brewer signed into law Arizona Empowerment Accounts. Empowerment Accounts allow parents – in this case, parents of special-needs children – to remove their children from the public-school system and receive the money the state would have spent on them in an education savings account. Every quarter, the state deposits up to 90 percent of the base support level of state funding into a parent-controlled ESA. Parents can then use that money to pay for a variety of educational options including private-school tuition, private tutoring, special education services, homeschooling expenses, textbooks, and virtual education, enabling them to customize an education for their child’s unique needs.

Traditional public school funding systems at the state and local level are also adapting to a “school funding portability” framework where state and local funding is attached to the students and given directly to the institution in which the child enrolls. More than 30 “school funding portability” funding systems are funding student through a student-based budgeting mechanism in cities like New York, Baltimore, Denver, Hartford and Cincinnati. In 2011, Rochester, Newark and Boston have moved to full weighted student formula systems where the money follows the child. Los Angeles Unified is moving from 100 pilot schools being funded based on per-pupil basis to all 800 schools funded based on where the student enrolls. In Louisiana, 7 school districts are piloting a student-based budgeting system, including the largest school district in the state, Jefferson Parish, with 50,000 students. New Jersey, Rhode Island, and Indiana have all recently changed their statewide school funding systems to a state formula where the money is attached to the child.

As Indiana’s Tribune Star reported “Of all the sweeping legislative changes coming to K-12 education, from private-school vouchers to performance-based pay for teachers, the one that may have the most impact is tucked inside the 270-page budget bill. It changes the way schools are funded, following a new formula to divvy up nearly $13 billion in K-12 education dollars. The new formula follows the mantra that “money follows the child.” As Representative Ed Clere, who sits on the House Education Committee explained “The new formula is a “sea change” from the past. We’re no longer funding schools. We’re funding students.”