3 reasons funding should follow kids
Last week, the Hoover Institution's Eric Hanushek argued in Education Next that liberals and conservatives' optimism about weighted student funding was misplaced. Hanushek argued instead for performance-based funding: schools that drive their students to better performance should get more funding, while failing schools should not be financially rewarded. I'd like to offer a few reasons why education reformers should still be bullish about funding that follows kids.
Weighted student funding is needed for parental choice to thrive.
Choice is no longer simply about charter schools for a small number of children. A few cities like Washington, D.C., and New Orleans are close to majority-charter or beyond. As Paul Hill noted in a recent paper for us on digital learning, our antiquated school finance system can barely keep up with the growth of online schooling, much less provide parents with robust options to piece together an education for their kids from a variety of providers—online, brick-and-mortar, after-school, and even community colleges and four-year universities.
It better aligns resources with needs.
There are certainly challenges to getting every dollar under the control of parents. Hanushek is right that local funds would not follow a weighted formula established at the state level. State formulas could adjust for those local dollars as a temporary measure, however, and more muscular state reform of school finances would not necessarily impinge on local autonomy. (See the case studies in Bryan Shelly's book, Money, Mandates, and Local Control in American Public Education for more on this front.)
It has the potential to simplify budgeting and compliance, providing schools with greater flexibility.
It's true that some school funding is already "weighted" for need; Hanushek uses the example of Title I funds. These dollars come with numerous strings attached, however, and flow through a dizzying array of categorical programs in some cases. (Just look at California's absurd set of entitlements and categoricals.) Part of the idea of weighted student funding is to shift a portion of the oversight for how education dollars are spent to concerned parents, letting school leaders spend their budgets to full effect without (as many) auditors breathing down their necks.
The theory behind weighted student funding is not that such reforms would "inescapably set in motion" a process whereby schools are magically transformed. Having money follow students is one tool among many desperately needed reforms.
For it to be successful, we need more and better schools of choice. We must develop principal capacity to budget and hire (as well as giving them the rights and responsibilities to do so). Some social service work is probably needed to boost parents' abilities to be discerning consumers of educational choice. Reforming our antiquated system of financing education is a must to improve our schools, with all the heavy lifting that entails.
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About the Editor
Bernard Lee Schwartz Policy Fellow
Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.
May 23, 2013