School Funding : Three New Approaches to Paying for K-12 Education

11/21/2020 | 10:18am

By Valerie Bauerlein

School funding has proven resistant to change for a century. With the education system reeling from the Covid-19 pandemic and state and local tax revenue -- the main sources of funds -- facing steep cuts, now could be a time when new ideas for paying for schools take root.

The predominant funding model for K-12 education is based on seat time, or how many students are physically present in a classroom in a traditional school year.

The pandemic has disrupted nearly everything about K-12, including who is in a school building. It has also shown that learning can take place virtually, or in small groups, not just in a classroom for nine months straight.

"We're at an inflection point," says Ross Wiener, executive director of the Aspen Institute's Education & Society Program. "What do we need schools to do, and what do we need to do to get the resources to do that?"

It could prove difficult to change a model that has been static for decades. School funding is hard to understand, much less unwind, and governed by a host of restrictions. Many educators and advocates say they worry that changing funding to incentivize certain outcomes, for instance, would be inequitable and would lead to running schools like a business, rather than a public good.

Overall, K-12 spending in the U.S. was $739 billion in 2016-17, or $14,439 per student, according to the National Center for Education Statistics.

Most K-12 schools in the U.S. rely on local property tax for roughly half of their revenue, a legacy of the days when public schools were community institutions funded by donations.

Over time, state funding has become a bigger piece of the pie, driven partly by judges who found that local funding unfairly benefits students in wealthy areas and penalizes students in poor ones. Per-pupil funding still varies widely depending on the wealth of the community where a school is located.

One way to promote change would be for states to loosen restrictions on how schools spend their allotment, according to Matthew Joseph of the Foundation for Excellence in Education, a nonprofit created by former Florida Gov. Jeb Bush.

"In the era of less money, there's the possibility that states will do a new bargain with districts," he says. "They could say, 'We're going to give you less money, but more flexibility.'"

Here are three ways that education funding might look different a decade from now.

Budget for Student Needs

One model allots money based on a student's individual needs, with schools getting paid more for kids from poor areas or those who are struggling to meet proficiency standards, as opposed to equal amounts for each child.

School principals get increased flexibility on how to spend money, such as the ability to hire additional counselors or give performance bonuses to teachers rather than relying on a staffing formula prescribed by the district. The Atlanta Public Schools system is one of the larger districts to implement a student-based budgeting plan, which it did with its "Student Success Funding" model in the 2018-19 school year.

Some school districts are experiencing pandemic-related double-digit drops in enrollment as parents put their children in private schools, choose to home-school or even hold children back a year. The drop in enrollment may make education officials more open to a budgeting model not based predominantly on total head count. Also, academics say the pandemic has shown how much harder it is for kids with economic or other disadvantages to attend daily compared with their peers.

Money Based on Mastery

A "learner-validated" model distributes funding based on what the student learns, as they master different skills or meet completion requirements. It also means that schools have an incentive to improve their teaching, because schools get paid more as learners meet benchmarks.

Texas incorporated this model into a sweeping education-funding reform law passed in 2019. But many schools are testing online programs that let students advance to new material as they master different modules, which could upend the norm of requiring a student complete a traditional two-semester school year to advance to the next grade.

New Hampshire has a learner-validated model in its Virtual Learning Academy Charter School, or VLACS, funded by a state trust based on the success rate of its thousands of students.

The Hybrid Classroom

There will likely be a mix of online and in-person learning models that continue after the crisis is over, funded by tax revenue, offset by tax breaks to parents or supported by public and private grants.

Education formerly was almost "parent-proof," with schools able to educate children with or without deep parental involvement, says Marguerite Roza, director of the Edunomics Lab at Georgetown University. Now parents are listening in on their children's lessons, checking assignments daily and enlisting supplemental help.

"If the choice was traditional school or nothing, they thought traditional school was better," she says, of the in-person, nine-month school year. "But I think people are starting to realize there's a lot between traditional school and nothing."

Dr. Roza says she expects learning pods, or small groups of students doing supervised online learning, to continue in some form. It is likely that some districts, particularly rural ones, might go virtual one day a week to save money on transportation and other costs.

An example would be Idaho's new "Strong Families, Strong Students" initiative, granting families up to $3,500 to spend on tutors, education software and online programs.

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Read the full report.

Write to Valerie Bauerlein at valerie.bauerlein@wsj.com

(END) Dow Jones Newswires

11-21-20 1018ET

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