School Finance Redesign Project

Finance Structures and How They Constrain Resource Allocation

This series of SFRP studies both explores the ways in which existing finance structures can constrain innovative use of education resources and makes recommendations for new practices that would better link resources to learning.

Four case studies highlight ways in which practitioners are trying to increase student performance, and the barriers they feel stand in the way of such reforms. Barriers identified range from regulatory requirements to union collective bargaining.

Two studies by Marguerite Roza investigating the influence of various funding streams illustrate how (1) each level of government has its own priorities about school funding, at times resulting in schools serving the most disadvantaged students having less money and more restrictions than those that service more advantaged students and (2) how categorical funding regulations can make it more, not less, difficult for educators to reach stated goals.

The work also points to some promising alternatives, including implementing new methods of allocating Title I funds to states and districts to ensure that low-income students receive the supports they need, and using social services funds to provide out-of-school interventions with the goal of mitigating negative influences external to the schoolhouse.

Together this work paints a picture of an accidental system in which regulations and other restrictions and spending decisions are made piecemeal and with conflicting intent. Educators understand the need to press for higher academic performance, but also fear making changes that might risk charges of violating a rule or norm; moreover, no one who now controls a pot of money or is empowered by a regulation or contract has a significant incentive to relinquish that control. However, the work also suggests promising alternatives to the ways public education allocates funds and decides what to buy.

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