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#AskExcelinEd: How can states allocate resources to achieve fiscal equity?

• Matthew Joseph

As we continue to explore how states are advancing educational equity that offers students quality learning opportunities, this week, Policy Director of Education Funding Matthew Joseph discusses how states can implement student-centered funding, and highlights some promising practices from states across the country. 

It’s a poorly kept secret that fiscal equity is elusive in K-12 public education. Students in one school may receive $12,000 per student in services, while in another, nearly identical school in that same district, students receive only $4,000 per student. This means that two students with similar characteristics can receive vastly different services and supports just because they happen to attend different schools.

Why does this disparity take place? The problem is that states fund school districts, not schools or students.

Student-centered funding addresses this unfairness. It means the majority of funding is provided to schools based on how many students they serve. Additional funds per student are also provided to address specific educational needs and challenges those students might have. Funding follows each student to any public school to ensure his or her needs can be met.

States that want to adopt a student-centered funding model should consider two significant shifts. First, states need to change how they fund districts. Second, they need to ensure that the funding they send to districts fully follows students from school to school.

Student-centered funding of districts

A state can meaningfully increase the proportion of district funding that is student centered through five steps:

  • Step 1: Establish a base funding amount that every district receives for each student served.
  • Step 2: Require local funding for a district to be provided on a per-student basis, such that the total local contribution will go up and down based on student enrollment.
  • Step 3: Structure all funding for students with special needs or disadvantages as a “weight”, or multiplier of the base, for each such student that a district serves.
  • Step 4: Adjust funding each year for districts based on the number and characteristics of students they are serving.
  • Step 5: Remove restrictions that lock funding into specific schools, services or programs.

Some states have taken such steps. California, for example, eliminated more than 50 funding programs to create a new, student-centered funding formula. Rhode Island, Nevada, Illinois and Pennsylvania have made similar changes in recent years. As a result, students in different districts in these states are more likely to get the services they need for college and career readiness.

Student-centered funding of schools

Equity in funding to provide tailored student services and support does not stop at the central office door. Indeed, districts must ensure that the funds allocated for specific students’ needs follow them to the various schools they attend. Through four additional steps, a state can ensure that funding that going to districts follows students from school to school.

  • Step 1: Remove restrictions on state funding that deter districts from using student-centered funding. California’s collapsing of its funding programs, as mentioned above, allowed districts to unlock funding from specific schools so that it can follow students.
  • Step 2: Provide districts with incentives to implement student-centered funding. Georgia offers school districts waivers from state rules.
  • Step 3: Require districts to report on spending at each school, which can build public demand for student-centered funding. Colorado, for example, has built a new website to highlight this information.
  • Step 4: Enable districts to incorporate federal funds into a student-centered funding formula, e.g., by encouraging districts to take advantage of a new federal pilot.

By undertaking these two shifts and nine steps, a state can create a student-centered funding system that is vastly fairer and helps schools meet the unique needs of each of their students. When funding follows the student, each student can receive a quality education, regardless of where they live.

About the author

Matthew Joseph

Matthew is Policy Director for Education Funding Reform for the Foundation for Excellence in Education. Matthew previously worked as a Senior Program Officer at the Bill & Melinda Gates Foundation, spearheading a national initiative to improve strategic use of resources in public education. He also served as Executive Director of Advocates for Children and Youth, where he led successful efforts to improve education and other services in Maryland. He also worked as a Senior Associate at the Annie E. Casey Foundation. Matthew received his Bachelor’s from Harvard University and a JD from the University of Maryland School of Law.