The cost of education

Students, schools and the public

Equitable school funding gives students, regardless of background, the same chance to succeed in the classroom. More dollars don’t necessarily guarantee better test scores, but when schools are short on money they may struggle to create optimal learning environments.

After researching per-student spending for every public school in Hamilton County, we have three recommendations for the school system to improve resource allocation and transparency:

  1. Shift budget focus to students
  2. Listen to principals and teachers
  3. Communicate with the public

Recommendation 1: Shift budget focus to students

Current budgeting practices focus on staff, buildings and programs. State funding mechanisms have pushed school districts toward enrollment-centered funding strategies. But that strategy obscures the diversity of Hamilton County’s student population. Some students cost more to educate than others. They face different challenges and barriers to success. A one-size-fits-all budgeting process does not account for the educational needs of a large and varied student population.

That traditional model isn’t the only way to allocate education dollars.

Student-based budgeting is different from top-down approaches. It focuses funds toward students rather than enrollment ratios. Under this system, the district and schools would jointly identify priority groups and determine how much it costs to ensure students have equal opportunities in the classroom.

Additional funding would be weighted for students who meet certain criteria. An economically disadvantaged student or one with limited English proficiency might be given greater weight. For example, the school system in Prince George’s County, Maryland, began implementing this approach in 2011. All students there start with a base allocation of $3,077. They then receive additional funding based on their socioeconomic status, achievement and other factors. Dollars are allocated without restriction to schools, which have the autonomy to determine how the money is spent.

Student-based funding in Prince George's County, Maryland
How additional resources would be calculated for a 1st grader meeting specific priority criteria.
Funding priority Dollars Formula weight
Base funding (all students) $3,077 1.0
1st grade $166 0.05
Poverty $94 0.03
Low academic performance $133 0.44
English language learner (beginner) $1,661 0.54
Total funding for this student $5,131  

A student-based budgeting model has four main benefits:

  • Student-focused: It creates a direct pipeline between funding and students. Priorities are clearly defined through a weighted formula established by school leaders. Dollars follow students even if they switch schools.
  • Transparent: The funding formula prioritizes students’ needs instead of enrollment numbers. It provides a clear rationale for resource distribution throughout the school system. It makes budgets and public spending more accessible.
  • Efficient: Students are the building blocks of this budgeting model. The more money allocated to a particular student group, the more resources provided for those students. Principals and teachers also have more flexibility and autonomy to meet the specific needs of their students.
  • Equitable: This model recognizes that some students cost more to educate than others. By budgeting for these extra costs, it helps provide optimal learning environments for all student.

Student-based budgeting is particularly helpful in large, diverse districts where equitable resource allocation is a challenge. While it’s not a silver bullet, it can help Hamilton County schools be more flexible, equitable and responsive.

Recommendation 2: Listen to principals and teachers

Successful implementation of student-based budgeting depends on collecting and listening to feedback from principals and teachers, who have unique insight into their students’ needs.

The Hamilton County Department of Education should take steps to listen closely to schools:

  • Talk about basic school needs. In interviews, school leaders identified fundraising as a strategy to meet basic school needs such as classroom equipment and maintenance. Schools with the capacity to raise funds are better able to address these shortfalls than schools with limited fundraising resources. The district and schools need to discuss how to better meet these basic needs across all schools.
  • Find out what teachers are paying for. Teachers are each allocated $100 to purchase supplies for a school year. Many cover additional expenses out of pocket. The school system should establish a formal way to identify what those purchases entail.
  • Communicate up and down. Communication between central office and schools has traditionally been top-down. Schools, however, know their students and needs better. Two-way communication can help foster a more collaborative relationship, which would be an important starting point in discussions of student-based resource allocation.

Recommendation 3: Communicate with the public

HCDE is the largest employer in Hamilton County and has an annual budget of roughly $400 million. The complexities of its budget and overall operations make it difficult for the public and community leaders to understand how spending impacts students and outcomes.

A lack of transparency around the budget leads to confusion among parents, educators and policymakers. To make a more understandable and accessible budget, the following actions should be taken:

  • Include average per-student spending for each school in the annual budget. When budgeting is based around students, average per-student spending amounts should be easier to capture. Publishing these spending figures can help ensure that schools are equitably and efficiently funded.
  • Continue to publish “A Guide to Understanding the Budget.” HCDE released its citizen’s guide to the budget in 2015. This was a positive step forward. The school district should publish this guide annually to communicate how money is used.
  • Hire dedicated communications personnel. Throughout our research, we communicated directly with accounting and finance staff in central office. While they graciously helped us gather data, this task should not have fallen on their shoulders. HCDE would benefit from dedicated personnel responsible for responding to the media and public.
  • Create an open data portal. HCDE should augment existing data published by the state of Tennessee by launching an open data portal. This might include school-by-school budget data, anonymized teacher evaluation data and school safety records. HCDE should look to Chattanooga’s open data portal as a model for how to manage and present open data.
  • Livestream budget and school board meetings. These meetings are usually held on weekday afternoons when work and other responsibilities prevent most people from attending. HCDE should livestream all school board meetings to promote community engagement and outreach.

We hope our findings and recommendations serve as a jumping off point for further discussion about ways to bring greater equity and transparency into the school district.

Metro Ideas Project is excited to help spark some of these important conversations in our community. We will be hosting an event on student-based budgeting in the coming weeks. If you found value in our education series and want to know more about how we can strengthen our schools, we hope you’ll attend.

Jacqueline Homann

Policy research director

Jacqueline Homann has worked at a number of international and federal institutions. She is a graduate of the LBJ School of Public Affairs at the University of Texas at Austin and holds an M.A. in policy studies.