A strong, straightforward policy principle is that school leaders and families are best situated to make effective decisions about education funding. However, state and K-12 school district policies too often limit local discretion and instead defer to the prerogatives of policymakers and administrators who are further removed from the students. This often includes centralized spending decisions over:
• Programs and support services
• Purchased resources
• Administrative and operational policies
• Employee compensation
• Extracurricular offerings
Centralized control happens at both the state and school district levels. For instance, South Carolina has many separate grants that must be spent on things including reading coaches, career specialists, and arts programs. Similarly, the New York City school district has roughly 100 different restricted grants for items including student auditions for arts programs, student clubs, and parent coordinators.
Additionally, many families have few options outside of their residentially assigned school, and it can be difficult or even prohibited to enroll kids across catchment areas or district boundaries. While state laws often allow for open enrollment, most don’t require districts or schools to offer open seats to families who would benefit from them, and education dollars don’t always follow kids seamlessly across district boundaries.
The Chain of Command
Control over school spending and organization is shared by a succession of stakeholders at various levels of authority, with those further down in the succession generally possessing less control.
State and Federal Policymakers → School District Officials → School Leaders and Teachers
State policymakers often limit local autonomy through mechanisms that require school districts to sponsor certain programs and spend funds on broad categories such as operations, transportation, or facilities. It’s also common for school districts to then further restrict school-level flexibility by distributing staff, not unrestricted dollars.
These layers of restrictions lead to situations where, according to a recent study from the American Institutes for Research, the average school principal has discretion over only 8 percent of their operational budget. And, in a recent survey of school principals and school district administrators published by Education Week, 52 percent identified state legislators as the biggest obstacle to making spending decisions that best address students’ needs.
Fundamental Principles: Devolving Discretions Downward
Local empowerment requires that the role of stakeholders who are further away from the kids be less oriented around top-down mandates and instead steered toward providing basic supports and ensuring transparency.
It also means moving away from rigid district boundaries that arbitrarily limit opportunities for families. Four key principles can help accomplish this:
- Make state education funding streams and regulations more deferential to school district leaders. Since states are the primary authority in American education, they should empower school district leaders by delivering most resources as unrestricted weighted-student funding. They should also minimize their use of inflexible policies such as minimum staffing requirements, statewide salary schedules, mandatory programs, and instructional time requirements.
- Maximize spending flexibility for schools. School districts should further empower school leaders by adopting reforms similar to those needed at the state level. They should deliver the bulk of the resources to schools through flexible, weighted-student funding, and they should generally refrain from requiring school leaders to adopt specific staffing arrangements or compensation structures. District leaders also should consider giving principals flexibility over what centralized services they want to purchase, such as professional development, intervention programs, and technology.
- Maximize choice and freedom for families. Families should be allowed to attend the school of their choice, both inside and outside of their home school district. This can be facilitated by both inter-district and intra-district open enrollment policies, and further supported by portable funding policies.
- Adopt bottom-up accountability. Rather than over-relying on top-down metrics, such as standardized test scores to evaluate school and teacher performance, accountability should primarily come from families who vote with their feet through options such as open enrollment. However, states and school districts can help families make informed decisions by making academic performance and financial data readily available, and by directly giving families a greater role over how schools are administered.
Benefits of Empowered Parent and School Leaders
Empowering parents and school principals with spending and operational decisions can have positive effects on every aspect of schooling:
- Eliminated inefficiencies: Without burdensome restrictions, local leaders can spend education dollars to meet their kids’ unique needs.
- Greater accountability: Giving school districts and schools more say over spending and operational decisions means they can be held accountable for outcomes.
- Customized approaches: Local stakeholders can adopt context-appropriate and diverse approaches, such as specialized staffing and service models to meet the various needs of individual students.
- Increased community responsiveness: When families aren’t restricted by neighborhood and school district boundaries, local leaders are must be responsive to their needs.
States That Provide Examples to Learn From
First enacted in 2013–2014, and implemented over the subsequent five years, California’s Local Control Funding Formula (LCFF) now delivers roughly two-thirds of all state and local education funding to school districts as unrestricted weighted student funding. The state rolled more than 30 restricted grants that existed before the reform into the LCFF, making it so that a majority of K-12 funding in California is now unrestricted.
Multiple recent studies and surveys have found wide support for LCFF among school district superintendents and school principals. Research also found that the LCFF reform led to positive cultural shifts within school districts where local leaders began to customize programs such as expanding school days and developing new services for disadvantaged students.
In 2016, Florida passed its Controlled Open Enrollment law, which allows families to enroll in any public school in the state provided it has not reached capacity and a child is not currently subject to expulsion or suspension. There are other minor stipulations, such as preferential treatment for students residing in the district, but, otherwise, all of the state’s 67 school districts must participate. Available data on the program are promising and show an increase in participation of more than 50 percent since 2016, with over 90 percent transferring to A- or B-rated districts.
School District Examples to Learn From
Most school districts across the country provide school leaders with very little flexibility, with the average U.S. school district giving school principals control over only 8 percent of their operational budgets.
However, a growing number of districts are adopting weighted-student funding and delivering additional flexibilities to schools.
Denver Public School District
Denver Public School District funnels more than half of its general fund revenues through a weighted-student formula, a model it has used since 2007. It provides its schools with an array of autonomies, such as flexibility over staffing decisions, the ability to grant work-based stipends to some teachers, and the ability to opt-out of district-provided professional development and instead purchase their own programs.
It also allows well-performing schools to apply for “Innovation” and “Innovation Zone” status, whereby they can get even more flexibilities, such as the ability to hire teachers with alternative certifications and change school hours.
Chicago Public School District
Chicago Public School District has used weighted-student funding since 2013 and has around 40 percent of its general fund budget in the formula. It affords its schools broad autonomies over staffing arrangements, allows both work-based and performance-based stipends for teachers, and generally gives schools a lot of options to opt-out of central services like professional development and district curriculum in exchange for dollars that can be spent on strategic priorities.
Reason Foundation’s series of policy briefs on the Student-Centered Funding Roadmap for Policymakers includes:
- A Student-Centered Funding Roadmap for Policymakers
- Streamline: How to Allocate Education Dollars Strategically
- Equalize: Funding Policies That Put All Kids on a Level Playing Field
- Empower: How to Put Families and School Leaders in the Driver’s Seat
- Inform: Give Stakeholders the Information They Need to Make Sound Education Funding Decisions