Three Ways to Fund K-12 Schools

Some school districts seek resource allocation and management models more closely tied to the characteristics of students and autonomy of school leaders. There are three distinct constructs for funding schools. In this blog, we will describe the difference between the three main ways to fund schools: Student-Based Budgeting (SBB), Weighted-Student Formulas (WSF), and Site- or School-Based Management (SBM).

How do dollars get allocated to schools?

Traditionally, dollars are allocated to schools through a combination of personnel-based ratios and per-pupil allocations.

  • personnel-based ratios (e.g., 1 teacher per 18 students, 1 counselor per 450 students, 1 principal per school)
  • per-pupil allocations for sundry products/services (e.g., technology, materials and supplies, food, student activities)

Traditionally, the central office mandates how money is allocated for people and programs and oftentimes only allows principals or other leaders control of a small amount of dollars. SBB, WSF, and SBM movements attempt to alter this tradition.

(Learn more about how state and local dollars fund public schools here.)

Three Ways to Fund Schools

Student-Based Budgeting (SBB), Weighted Student Formula (WSF), and Site/School-Based Management (SBM) are sometimes used interchangeably and by different definitions.


 

Student-Based Budgeting (SBB) is a system in which the funding available to a school is based on the overall enrollment of the school. In its simplest form it is an assigned dollar per pupil multiplied by enrollment to determine a total budget allocation.

$ x students = total budget

Per pupil amounts may vary based on student demographics (see Weighted Student Formula below) or based on the allocation of specific resources on per student basis (ex. $10 per student for instructional supplies).


 

Weighted Student Formula (WSF) is a student-based funding system by which individual students, based on their characteristics (e.g., low income, ELL, or SPED status), are given additional funding in the form of a “weight,” suggesting they need a percent of funding over the base level of funding. For example, a low-income student may have a weight of .4, meaning the funding for that student will be 1.4 times the base level of funding.


 

Site- or School-Based Management (SBM) is a system by which some level of autonomy is given to site leaders (e.g., principal, teachers, community) in the budgeting process. This autonomy is not reliant on the former two movements.

 

Pros of the 3 Funding Methods

backpack weight site
Student Based Budgeting Weighted Student Formula Site Based Management
Transparent funding, so it is known to all what resources flow to which student. Provides greater control/ reporting of school-level data and greater school- level accountability. Those who best understand needs have the authority to make decisions.
Clear comparison of per pupil funding levels. Allows for equitable funding of various student populations. Decentralizes budget authority and process.
  Clearly explains why schools of the same size may receive different funding as the composition of the student body varies. Resources allocated to individual sites, and budgetary authority granted to school’s principal/staff.
    Allows for alignment of goals with resources.
     

Cons of the 3 Funding Methods

backpack weight site
Student Based Budgeting Weighted Student Formula Site Based Management
Funds may or may not vary based on individual student body demographic. Enrollment forecasting process should be fairly accurate in order to avoid unanticipated swings in funding. Developing principal capacity to navigate financial decisions.
Enrollment forecasting process should be fairly accurate in order to avoid unanticipated swings in funding. Determining the appropriate weights can be difficult to determine in early implementation. Ensuring fiscal accountability as decisions are decentralized.

Implementing a Funding Model

While not necessary, all three of these movements can coalesce. A district may choose to implement Student-Based Budgeting and allocate dollars to schools via a Weighted Student Formula, where a principal exercises the practice of Site/School-Based Management to deliver their vision of programs and policies for teachers and students to experience. On the other hand, a district might choose to implement Student-Based Budgeting and allocate dollars to schools via a dollar-per-student formula and give principals no discretion in how to deliver their vision of programs and policies. The implementation of any one of these models is some form of grey necessitates understanding each as separate functions of a funding system.

For further information, visit: http://www.renniecenter.org/research/SmartSchoolBudgeting.pdf

 

But wait, there's more...
Guide to Implementing Priority-Based Budgeting in School Districts 5 Steps to Transition Your District to WSF
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About the Author

Kate Kotaska

Kate Kotaska is a Budget Director In-Residence for Allovue, Inc. Before joining Allovue, Kate spent the majority of her career in Denver Public Schools shaping the district’s resource allocation model and building a backbone of financial support known as the Financial Partner Network. As DPS' Executive Director of Budget and Finance, Kate was responsible for streamlining the district's budget process to maximize stakeholder engagement and transparency. Kate earned her undergraduate degree from Pace University in Pleasantville, NY.