Follow the Money: The ins and outs of school budgeting


Consider this scenario. You are a school principal who needs to fill a teaching position. One of the candidates is a highly experienced teacher who has relocated to Chicago. Her years of experience and advanced degrees translate to a sizeable salary. There’s no question that she will be a great asset to your educational program, but hiring her would take a big bite out of your available funds,limiting your ability to cover a number of other items in your dream budget – technology, professional development for your staff, additional classroom aides, etc. Should you hire instead a younger, less experienced teacher who would set you back 25-50% less than the veteran?

Principals face this dilemma under a funding system called student-based budgeting, which prevails in many school districts including the Chicago Public Schools. The way it works is simple. The district calculates the average cost of educating a child in its schools. Multiply that number by the number of students enrolled in the school and, voila, that’s your budget for the year.

It’s the way charter schools have been funded from the outset. Ironically, charter advocates had hoped that innovations they initiated would be adopted by the rest of the school system, but this one appears to be one of only a few that have passed into general use. It’s a system uniquely suited for charters, which enjoyed the flexibility it allowed in designing their schools. For example, if you wanted to hire additional social workers, you could push your numbers around to make that possible.

The system that was in place when we arrived in Chicago in 1995, and which prevailed until about ten years ago, was called school-based budgeting. The Central Office created a formula, once again based partly on school enrollment, which determined how many staff positions – teachers, social workers, librarians, administrators – it would assign to the school. Other items like funds for professional development were also determined centrally. Little of the budget was controlled locally, except the Title One federal funding the school was eligible for, although even that was eventually also captured by the Central Office.

The tradeoff for this loss of autonomy was that now you could hire that more experienced teacher without crippling your budget because her salary was coming out of the central coffers. She would only show up as one of the allotment of teachers you were entitled to.

CPS has just announced a return, possibly next year, to that earlier school -based model, with some significant needs-based improvements. There will be additional funding, based on the special circumstances a particular school presents – number of special needs students, second language learners, homeless students, the poverty level of the community in which the school is situated, etc. This is a distinct improvement over a one-size- fits- all model. The details of the plan are still sketchy. It takes time to turn a big ship like CPS around and, given the way in which district policies shift with leadership changes, the future of the new budget plan is unclear.  Add the arrival of the new, partially elected school board as another complicating factor.

Why this major shift in budgeting? Two reasons seem foremost. First, that one-size-fits-all approach is blind to the incredible difference in needs of individual schools. A school in Englewood with 25% homeless children is a different animal from a school on the North Side where only 30% of the students qualify for free or reduced lunch. Equality of funding for those two schools does not produce an equitable outcome.

A second reason for the shift is the continuing decline in the district’s school population, particularly in predominantly Black areas of the city. Under student-based budgeting, schools can fall below the ability to provide a staff and a program that is adequate for the needs of the remaining students. This can produce a snowball effect, with parents shying away from the declining school, further crippling it. The school-based budget guarantees adequate service for every school and every student. And don’t forget my original scenario, which suggests that the change may enable struggling schools to attract higher quality staff. All this speaks well for the proposed change, but it’s unclear what the overall budget implications are for a district which is already running a deficit of close to $400 million. On the surface, it appears that the well-intentioned plan may worsen that situation.

Are you still with me? I’m guessing many readers bailed out when they saw the title of this posting – school budgeting. It’s not a warm and fuzzy topic, but one critical thing I learned as a school director is that every budgetary or administrative decision – areas that don’t tug at my heart strings the way instruction, curriculum and the stories of individual learners and heroic teachers do – has direct implications and consequences for the areas that attract most educators into the business. We’ve got to be attentive to those issues. They are the oxygen in the blood stream of a school system. They can make the difference between a healthy and a malnourished operation and one that is thriving. We look past them at our peril.

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Marv Hoffman

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