School Funding Report Finds Inequity Within Montgomery County Public Schools

Commentary

School Funding Report Finds Inequity Within Montgomery County Public Schools

Montgomery County Public Schools is shortchanging disadvantaged students. A recent report released by the county’s Office of Legislative Oversight found that the largest school district in Maryland fails to provide low-income students with equitable resources.

Superficially, the school district appears to allocate funding fairly. The report found that Montgomery County’s schools serving large numbers of low-income students spend more on staff per pupil and have lower average class sizes than wealthier schools. Dig a little deeper, however, and a different story emerges.

The Office of Legislative Oversight astutely sought to determine whether the funding gap between schools serving high- and low-income students is sufficient to account for the challenges presented by their differing student populations.

The report found that Montgomery County Public Schools is using its federal and state compensatory education funds generated by lower-income students to subsidize its operating budget. In total, the district receives about $151 million annually intended for these low-income programs but spends $47 million of it on non-compensatory education purposes.

While technically permissible, this means that low-income students are not provided with funds that are intended to support them. This is especially concerning given the district’s achievement gap. In a separate report in 2014 the Office of Legislative Oversight found that “…the achievement gap between high-and low-poverty high schools has widened among a majority of measures considered.”

The study also found the district’s high-income schools have more experienced, and thus more expensive, teachers than low-income schools. This finding is consistent with research elsewhere. A comprehensive study of teachers in New York concluded that, “Nonwhite, poor, and low performing students, particularly those in urban areas, attend schools with less qualified teachers.” Highly-skilled teachers in low-income schools tend to transfer to high-income schools or leave the profession.

In short, Montgomery County’s low-income students aren’t provided with equitable resources and are likely to have less skilled teachers. The Office of Legislative Oversight recommends transitioning to a student-based budgeting system, where funding is allocated by student and the money follows the student to the school of his or her parents’ choice.

Baltimore, Prince George’s County, and New York City are among the 30 school districts that are already implementing or testing this funding system, which establishes the basic funding level for the district’s students and identifies funding that should go to students who may have special education needs. Naturally, every district has a unique formula that is aligned to its needs and priorities.

This system empowers principals with budgetary discretion. In most traditional budgeting systems, principals control less than 5 percent of their school budgets, with most spending and staffing decisions made at the district level. In contrast, student-based budgeting allows funding to arrive at the school-level in dollars rather than staffing positions. Principals can determine the number of teachers they need based on the unique characteristics of their students and direct resources towards technology, aides or other options as they see fit.

Since the funding follows the child to the public school of their choice it creates an organic system of accountability: high-performing schools are rewarded for success and low-performing schools are encouraged to make substantive changes.

If Montgomery County Public Schools were to adopt student-based budgeting, its leaders could allocate funds in a transparent manner that is tied to the needs of its students. In this system, funding for low-income and other disadvantaged students would be explicit and principals would be empowered to align resources with students’ needs.

Aaron Garth Smith is the Director of Education Reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets.