A Seasonal Guide: How are school budgets made? *Winter Edition*

Welcome to the winter installment of our seasonal guide to school budgets. During the fall, districts are figuring out how much money is coming in for the following school year and it's based on quite a few variable factors. (Missed the fall edition? Catch up here!) During the winter months, it's time for districts to decide what they're going to do with that money. Keep on reading for a general rundown of how schools decide where the money goes.

Winter (December-February) What are we going to do with all that money?

School district budgets are often more than half of all government spending in your community. Their budgets can seem enormous, with the largest districts in the country having budgets in the hundreds of millions or even billions of dollars. These budgets are easier to understand if we break them down into four main categories:

Debt and Obligations

Right off the top, districts have to deduct their costs such as retiree benefits or debt service. That new school the district built four years ago? Chances are a good portion of the school district budget is paying for a debt it used to fund its construction. There are also certain legal obligations the federal government places on school districts to serve residents with certain disabilities even before kindergarten, and up until they are age 22. In some states, school districts also have to supply transportation, textbook funds, or other services to private schools. These dollars are all grouped into this category because while critical, they are not used to support educating currently enrolled students directly.

Central Administration

Typically, 5-7% of a healthy district budget goes to central administration, which includes the Superintendent, CFO, and other personnel who are essential for uniting schools around a common mission and vision for the district, ensuring that school operations are running smoothly, and keeping the district in compliance with state and federal regulations.

Central Services to Schools

Personnel or services that are budgeted at the central office but provided for the direct benefit of students or schools fall into this category. These expenses may include school resource officers, counselors, psychologists, nurses, and other staff that work with multiple school sites. It’s easier to budget these positions centrally if their time is split across multiple schools. This category may also include expenses that are more efficient to negotiate and manage centrally, such as transportation, or building utilities and maintenance.

Need help painting a better picture of what the actual per-pupil spending is at the school level, even if the dollars were budgeted centrally? We’ve got just the ace up our sleeve. ACES lets you attribute centrally held expenses down to the school level, so you determine how resources and services are benefiting students. Click here to learn more.

Allocations to Schools

This is the category of spending that people are most familiar with because they are often the most visible resources. A combination of federal grants and General Fund dollars will be allocated directly to schools based on the district’s budget method, which may take into account enrollment-to-staff ratios, weighted-student funding, or a combination of allocation strategies designed to ensure that students have the right resources. These dollars typically include the salaries of the school principal, teachers, and other site-based personnel, as well as discretionary spending on things like technology, supplies, field trips, and other resources. Within school-based spending, staff typically account for 85-90% of all spending.

Now that we know where the money is going, we need a plan to spend it. That typically happens in the spring.

But wait, there's more...
A Seasonal Guide: How are school budgets made? *Summer Edition* A Seasonal Guide: How are school budgets made? *Spring Edition*




About the Author

Jess Gartner

Jess Gartner is the founder and CEO of Allovue, where edtech meets fintech - #edfintech! Allovue was founded by educators, for educators. We combine powerful financial technology with education data, giving administrators the power to connect spending to student achievement. Jess has been featured as one of Forbes Magazine’s 30 Under 30 in Education (2015, 2016 All-Star), The Baltimore Sun’s Women to Watch (2013), and Baltimore Magazine’s 40 Under 40 (2013). In 2014, she was recognized as the Maryland Smart CEO Innovator of the Year in the Emerging Business category. Before founding Allovue, Jess studied education policy at the University of Pennsylvania and taught in schools around the world, including Thailand, South Africa, Philadelphia, and Baltimore. She taught middle school humanities in Baltimore City and received her M.A. in teaching from Johns Hopkins University.