9/3: Student Based Budgeting – The Devil is in the Detail

devil_in_detailsIn the Budget Development Presentation tomorrow night (Agenda item 6.01), the District staff will cover in slides a concept we first heard about at the August 23rd Board Study Session:  Student Based Budgeting (SBB).

As of this writing (the evening of 9/2), that part of the presentation is still “Under Construction”.

So we at JeffCo School Board Watch have done some quick research for you.  Below is what we have learned in the last few days about Student Based Budgeting or SBB.  Hopefully, this will help your understanding of the budget presentation tomorrow night, as well as prompt some good questions.

We used as a starting point the SBB-guide.pdf published by Educational Resource Services (ERS). After going through the guide and other sources, here is what SBB is a nutshell (okay – maybe a coconut shell):

Student Based Budgeting

Instead of districts using funding to acquire, develop, or support resources that then are apportioned out to schools and programs, funds are instead attached to individual students as much as possible.  The school that a student attends becomes the recipient of the amount of funds that individual student has been assigned.  While there is a base amount of funding assigned to each student, additional funds are allocated to each student according to objectively measurable needs or conditions.

The principals of each school then take the funds their students have brought with them and are basically free to use them to put together the resources, teachers, programs, and/or facilities the principal feels is necessary to achieve the student performance desired.

ERS says there are several advantages to this system, including, equity, flexibility, and transparency.  It is supposed to reduce the District overhead, which in theory frees up more funds, and allows each principal to customize his or her school as they see fit to meet the needs of the schools students.

This sounds wonderful, simple, easy, and logical!  So why isn’t everyone doing already?

Because the devil is in the details!

For SBB to be implemented and actually produce the results ERS promises requires many conditions to be just right.  For sake of clarity and brevity, we are looking at only the top items of the main challenges.  Everything we have read about SBB says the deeper you get into it, the more complicated it gets and the more issues that need resolution.

Challenge #1 – Funding Sources.  

Much of a school districts expenditures are non-discretionary.

  1. Not all funding sources can be broken into per student expenditures.  For example, money JeffCo receives from 3B is legally obligated to be used only on the repairs and maintenance of existing school buildings.  The same issue confronts other funding sources.  Grants are often given to schools, or to district programs.  State funding is often tied to specific programs.  Federal funding has to be spent in accordance with Federal guidelines or the money is lost.  In short, you just cannot take the entire budget of JeffCo, divide it by the number of students and end up with your per student funds.  Much of the money simply cannot legally be spent that way.
  2. Funding from outside sources, even when student-oriented, generally has specific rules on the type of student that the funds can be spent on.  A grant from an organization to the District to help GT students cannot be repurposed and spread to non-GT students.
  3. Many grants require some form of matching funds from the District or schools.  This further muddies the water of the per student fund amount.

Challenge #2 – Determining the Base Amount of per student and then the additional amounts allocated for specific needs or conditions.

  1. Just identifying the number of different conditions and needs will be an enormous task.  In addition to the obvious ones such as Special Ed, At-Risk, GT, ELL, etc., there are less obvious including traveling distance (more rural students need more transportation dollars), Elective choices, special program selection such as AP, IB, or Technical training.  There are many, many more.
  2. Determining the amount each condition and need will be allocated. Think the fighting between regular public schools and charter schools is fierce?  How about when GT parents square off with Special Ed?  Or Sports participants with Drama?  School nurses vs. custodians? Elective participants vying with music?  Movie barroom brawls will seem tame by comparison.

Challenge #3 – Additional Skills needed by Principals and District staff

  1. Most principals are not currently experienced or trained in the kind of decisions this would demand. Currently, principals are focused primarily on hiring, training, and retaining good teachers, staying within their budget, interfacing with the parents, community, and district (and many, many, other things).  They are not trained to issue RFPs for contract services, manage contractors, evaluate building maintenance risks vs. benefits, building and implementing marketing plans, project managing software projects, etc., all things this approach demands.
  2. An additional class of District employee would be required:  Project Managers.  This would increase District overhead instead of reducing it.
  3. A completely new and different budgeting approach and software would be required.  The software would most likely demand a high level of customization, increasing it’s up front and continuing costs (it becomes expensive to modify).

Challenge #4 – Political ramifications

  1. What happens when this results in a school currently getting lots of funding sees it diverted to a school that has been underfunded?  I.e., how happy will D’Evelyn parents be if they see D’Evelyn’s budget drop while Jefferson High’s goes up?  Does any parent think that their school is overfunded?
  2. For this to be truly effective and equitable, charter schools will also have to be funded this way.  Initially, charter school advocates will cheer this approach.  But will they keep cheering when they see their funding drop in order to help an elementary school in Edgewater that has 80% of the kids on free or reduced lunches and 50% of them in ELL?  PTAs will get involved.  Local politicians trying to keep funding for their children’s schools.  This system, if done right, will see schools with highly active PTAs and awesome fundraisers lose funding to schools that do not have those advantages.  How well will that go over?

Challenge #5 – District Resources vs. Outsourcing vs. Conflicts of Interest

  1. Individual schools may make choices that optimize results for them, but worsen the results for everyone else.  For example, a Principal in a relatively new elementary school chooses to outsource janitorial services instead of using classified employees because he or she can save some money.  If enough schools do this, then custodial services will effectively be eliminated as a District capability, resulting in all schools having to contract out for janitorial services.  This will hurt older, less well maintained schools who will now have to pay more for those services.  This is a lesson of economics:  optimizing each segment of a system to it’s own maximum efficiency results in an over lower efficiency for the entire system.  The system is also more fragile, with breakdowns having larger ramifications.
  2. If WiFi needs to be upgraded across the District, instead of having one RFP, one vendor, and one contract to oversee, each school will need to issue it’s own RFP, select it’s own vendor, and oversee the work itself.  And what if a principal decides that his or her school needs another ELL teacher more than improved WiFi….but the District is penalized if all their schools do not meet the new data security standards?
  3. With each principal responsible for making all the decisions, the opportunity to benefit friends or relatives goes up…unless there is a dramatic increase in District staff to handle the increased contract review and monitoring that SBB would involve.  It does not even have to be nefarious.  It could simply start out as a brother-in-law offering the principal a really good deal.

All of this goes back to Challenge #3, the need for principals to acquire an entirely new set of skills and training.

Challenge #6 – Organizational skills and conditions to carry this out.

  1. The goals of Student Based Budgeting is to improve student performance by making it more likely resources go where they are most needed.  This is in contrast to the “every child gets the same amount of money spent on him or her as every other child” mentality.  Are the various stakeholder groups, especially charter school parents, willing to see more money going to poor children in poor neighborhoods than to their own schools and children?
  2. Transparency is a pre-requisite.  This system relies on the trust of all those involved.  That trust is built by having open discussions and accounting, plus consensus on how much additional funds each objective measurement should receive.
  3. Page 9 of the guide: SBB may be wrong for you if: ‘Per-pupil funding levels are below average vs. peer districts and/or falling to the point where even with added school-level flexibility, resources are so scarce that SBB is unlikely to be a transformational lever.’”
  4. The demands of Federal and State laws will need to allow for wide variance in how schools are organized and perform within a District (something that other Districts in Colorado are now having a problem with).  With every school principal basically able to go his or her own way, district-wide results will increase their variability.
  5. High levels of trust, and skill are required to make the change.  This is akin to converting an one old cargo ship into a series of medium and small size motorized speedboats, and having it done while the ship is sailing from port to port.  Doing it without having the ship sink (the District fall into chaos) or cargo fall overboard (students not getting what they need due to confusion and partial implementation) will be extremely difficult.

Questions that should be asked RIGHT NOW!

1) How much in discretionary funds would be freed up by this process that could be     reallocated to produce greater student achievement? In a school district that has a low funding environment with many mandated programs (via state and fed), how creative/innovative could the district actually be if there aren’t many discretionary dollars available? How many resources are legally locked in their allocation and spending?

2) Are we going to eliminate whole programs to free up dollars? If so, what would they be? Are cheaper programs better? Is this politically feasible, permissible or even smart?

3) This program is designed to improve student achievement by committing more resources to students and schools that need it and fewer resources to students and schools that do not.  Is the current Board willing to see allocations works that way?  Charter Schools will have to be included in this, otherwise a social/economic class system of education would be created.

4) How can the District and its stakeholders avoid having a political civil war trying to decide how much a ELL student gets, an autistic child, a GT child? This system asks us to apply an amount to each need to allocate it around the district.  How do we fairly decide what amount each need gets?

5) If we go with this method, are our principals ready to handle this new responsibility? Are they well trained and ready with new ideas of how to implement? Principal must have a vision. They are going to be tasked with new skills.  Do they even have the time to learn and do all of this and keep up on what is already demanded of them?

6)The SBB Guide says     that disadvantaged schools may get more funding than they do now, while advantaged schools may get less. How will the District handle the unhappy parents, teachers, and students of the schools that see a reduction in funding?

7) ERS emphasized that transparency and trust is essential in this type of transformation. How can we be assured that WNW will give the public the transparency required, given their past performance?

8) Collaboration is also recommended. This flies in the face of WNW’s competition complex.  How will WNW overcome this? competition?

9) A clear and shared vision must be exist for the District.  WNW has not shared their vision, other than platitudes that sound good but specify little.  How can WNW reassure us of their vision if they do not share it?

10) A major limiting factor is the district’s capacity for change.  WNW is already embarked on dramatic changes.  How much change can a district withstand in 4 years before it disintegrates?

11) A lot more data is needed to implement this. Are our IT systems ready?  Won’t this require a big spike in IT spending?

12) If we cannot trust WNW on why the oppose Free, Full-Day Kindergarten, how can we trust them with a change this radical?

Keep researching, keep thinking, keep questioning, and

Keep Fighting, JeffCo!

3 thoughts on “9/3: Student Based Budgeting – The Devil is in the Detail

  1. I am a principal in Denver. We’ve been doing SBB for 5-6 years. It works well for us

    • We are glad it seems to work well for you. How did Denver answer the questions that we raised? Over what period of time did the change occur? How were the amounts for the different conditions/needs set? How often are they revisited? How were these particular conditions/needs determined? How transparent was the process? How much additional training did you receive? Is there objective evidence that SBB resulted in improved achievement for students at challenged schools? Has it held up?

      As our post said, SBB sounds great, but we think it’s success or failure will be in the details.

  2. If $$$$$ follow the student, what’s to keep them from using it for a religious school which would go against the Constitution, “Separation of Church & State? These could be in direct opposition of our American beliefs and values, besides our laws. This is happening all over the US and in CO now. Do you want your taxes to support that? That’s why we have “Public Schools”.

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