Education Funding

Putting Students at the Center of Education Funding

The way states fund districts is so complex only a handful of people in any state understand it. District leaders are hamstrung by a multitude of restrictions that lock in antiquated instructional models, preventing them from addressing the unique needs of their students, even when there’s a strong desire to do so.  

Education stakeholders deserve to know how and where education funds are being spent. And all students deserve to have an education that is fully funded to meet their unique needs—regardless of whether they attend a traditional public school or a public charter school.

Matthew Joseph, ExcelinEd Funding Policy Director

Too often, debates about state education funding focus solely on how much money should be provided to school districts instead of what impact that money is having on students. In most states, funding is completely disconnected from school performance as well. In fact, the only way school districts can grow their budget is to raise local taxes.

Fundamental Policy Principles

In states across the country, funding for schools is stuck in an industrial model, focused on “inputs” and specific instructional models that no longer work for most students. By changing the way funding is structured—and enhancing its transparency to the public—districts and schools are able to improve and innovate on behalf of students.

Featured Resources & Latest News

Funding for K-12 education is at risk in the coming year as state budgets, impacted by the COVID-19 pandemic, are planned and finalized. In addressing fiscal challenges in their states, policymakers have an opportunity, if temporary cuts are required, to protect and even strengthen equity for students.

What They Are Saying

“Allocating our resources efficiently and effectively is a critical component in ensuring our education system is giving every student the opportunity to succeed. School-level financial transparency allows us to shine a light on education funding and empowers school leaders with the information needed to leverage their resources the right way to spur academic achievement.” 

Sen. Gary Stanislawski

Oklahoma State Senate

“ExcelinEd’s expertise was invaluable as we worked, successfully, to add outcomes funding policy in Texas.”

Todd Williams

Chairman and CEO, The Commit Partnership

“In the state of Colorado, we work to ensure every public-school student from traditional district schools to charter schools has access to equal local funding.”

Sen. Angela Williams

Colorado State Senate

Education Funding Policy Solutions

When a student moves from one school to another, only a portion of funding follows him or her. This unfairness occurs because states fund specific staffing positions, services, programs, schools and school districts, rather than students.

Also referred to as weighted student funding, student-based allocation or student-based budgeting, student-centered funding means:

  1. nearly all funding is provided to districts based on how many students they serve;
  2. funds are also provided to address specific needs and challenges those students might have; and
  3. funding for each student follows him or her to any district to ensure his or her needs can be met, regardless of district boundaries.

When compared to the current systems of big blocks of funding trapped in specific services or programs, student-centered funding is more transparent; it empowers district leaders to use funds to meet the unique needs of their students; it empowers parents to choose the district that is best for their children (with the money following their child); and it’s fairer because all students in your state get the same base resources, with additional funding for students with special needs or disadvantages.

Financial Transparency

School leaders and parents lack basic information on how much funding comes into a school and how spending on key activities compares to similar schools that are getting better results. Through legislation and executive action, state leaders can promote financial transparency by requiring districts to report, for each school, actual revenue and expenditures per student, including how much they are spending on key instructional activities.  

Financial transparency, particularly at the school level, is critical to the success of student-centered funding. It promotes more effective and efficient use of resources by enabling school leaders to identify comparable schools that are getting better student outcomes with the same or less funding. Transparency also promotes student opportunity by empowering parents with information on how much funding a school is receiving per student. 

Performance Funding

Funding for schools is currently based on inputs, regardless of how well schools do. But performance funding in K-12 education can incentivize results. Examples include rewarding schools when they succeed with at-risk student populations or when their graduates get a decent paying job, succeed in college or enlist in the military. Performance funding is effective because:  

Developed with the help of Dr. Larry Miller, the nation’s foremost expert on K-12 performance funding, the Performance Funding Issue Brief and Modeling Tool shows real results. When performance funding is high compared to the overall proportion of funding, student success is higher. Learning gains are even more significant for at-risk students, where extra funding for their success can narrow achievement gaps.

Fair Funding for Choice

Most state education funding systems do not fairly fund all students across all choice options, particularly public charter schools. This reality is stifling the growth of existing charter schools and limiting the expansion of new quality public school options. ExcelinEd has developed a methodology called the Charter Facility Index by which states can assess whether they are addressing the full facility needs of charter schools. The index outlines three policy areas states can leverage:  

  1. Funding – States can provide direct funding to charter schools to pay for facilities.  
  1. Facilities – States can provide charter schools with no-cost access to public facilities.  
  1. Financing – States can provide affordable financing so that each charter school can buy its own building by guaranteeing tax-exempt bonds issued for charter schools and subsidizing the financing fees.  

With any of these policies, magnitude matters. A major investment in one tool may reduce the need for another and it takes a combination of tools to fully address the facility needs of charter schools in a state. If many charter schools can access free facilities, fewer charter schools need funding for rent. 

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