Reform of the state's school

funding formula could

empower local educators,
support innovation,
increase transparency
and align resources with
new learning goals.
T
he changes now facing Cali-
fornia's public schools seem
unprecedented both in terms
of number and magnitude. In
particular, the Common Core Standards,
accompanied by new curriculum, new tests,
and a new accountability system, promise to
affect the core of the educational enterprise.
But in many ways the reform of the state's
school funding formula could result in even
more dramatic changes.
The effects of linking school districts'
funding directly to the students they serve
and providing local school districts and
communities with more control over how
that money is spent could ripple through
the entire K-12 system, from the state Capi-
tol to the classroom. For district leaders
anxious to improve their schools and bet-
ter support learning for all students, it could
also represent a real opportunity to depart
from business as usual in the areas of finan-
cial management and budgeting.
State leaders hope this reform will em-
power local educators, support innovation.
increase financial transparency, and pro-
mote the use of limited resources in ways
that align more closely with new learning
goals. In a public school system that has had
its financial hands tied for decades, realiz-
ing those goals will require district leaders
to re-examine their processes and policies
related to resource allocation.
Over many years, student-based bud-
geting has often been promoted as a strat-
egy that would facilitate that kind of local
finance reform. That optimism is based in
part on successful examples outside of Cali-
fornia and based in part on experiences in
the charter school sector.
In 2009, a California-based project set
out to learn what it might take to move to-
ward both a student-based process for allo-
cating resources and a site-based process for
budgeting in school districts. Pivot Learn-
ing Partners and the American Institutes
for Research formed a partnership with the
B y M a r y P e r r y
8 Leadership
Twin Rivers and Los Angeles Unified School
Districts to create the Strategic School Fund-
ing for Results project. The goal was to im-
plement and evaluate a new way for districts
to allocate funds to school sites and for site
leaders to create their school budgets. The
experiences of the participants in this proj-
ect provide some important lessons for dis-
trict officials who want to take advantage of
the new funding formula state leaders seem
likely to adopt.
The Strategic School Funding for Results
project was designed to translate the ideas of
per-pupil resource allocation tied to student
characteristics, site-level budgeting and fi-
nancial autonomy into more transparent
budgeting processes and increased local ac-
countability for results. A key question was
whether site-based budgeting could also
foster innovations that would improve effi-
ciency and student performance. The pilot
involved real schools and confronted the
on-the-ground realities in California. Coin-
ciding as it did with dramatic cuts in school
budgets, the project also supported local
leaders' efforts to run an acceptable school
system on substantially reduced funding.
In the process, the SSFR partners identi-
fied some strategies likely to prove useful to
any district leaders wanting to find effective
ways to put more budget control into the
hands of their school principals, staffs and
communities.
1
Rethink district and school site
budget development and planning
calendars.
It was an "aha moment" when Pivot and
the partnering districts in SSFR recognized
that the timing of school site budgeting
needed to change if principals were to con-
duct a more deliberate and strategic process
in which educational planning could actu-
ally drive budgeting.
Traditionally, while districts might begin
some budget planning in the fall, they do not
give school sites an estimated budget to work
with. As a result, schools don't start working
on their budgets until after state projections
are available in February or later. At this
point in the year, time is short and budgets
are finished quickly before school plan de-
velopment even begins.
Rethinking the site and district budget
planning calendars - and accelerating the
site-level budget development to begin in the
fall - changed this. The new schedule gave
principals and school site councils the time
to begin with a needs assessment and goal
setting, think about the innovative strategies
that would achieve their goals, and develop a
time for planning and budgeting, plus more
effective tools for doing so collaboratively,
improved the principals' capacity to man-
age their budgets. Through control of this
software system, the districts placed their
own overarching goals - and specific out-
come measures - into each site's planning
documents and thinking. This process also
school plan that could then drive the budget
development process. The schools were thus
able to allocate their available dollars toward
the goals and strategies they had already ad-
opted.
2
Create an online environment where
budgets and emerging school plans
can be easily accessed and readily shared.
The SSFR study found that principals
and school district officials approached the
budget process more thoughtfully and col-
laboratively when they could share their
thinking as they developed their budgets.
The key was to create a powerful, common
set of software tools that meet principals'
planning and budget development needs
and that are integrated with the district's
data management system. Putting the tools
online also helped principals by making it
possible for them to access their plans and
budgets at whatever time and from wherever
it was convenient, including after regular
work hours.
The combination of a longer window of
helped the districts and schools develop a
shared vocabulary. And principals began to
see their plan development as a process of
designing programs to meet specific goals,
rather than just as a compliance activity.
The SSFR study showed that the right
tools can help turn the annual site planning
and budgeting process into an experience
that increases site leaders' knowledge, and
promotes communication and collabora-
tion. In the study, district officials had access
to principals' planning processes online. As
a result, they were able to assess and respond
to any professional learning needs that
emerged for those principals. The principals
found they had more time to be strategic
and that they benefitted from being able to
confer with district officials and their peers
throughout the process.
Providing transparency into school plan-
ning in real time can also give district office
staff confidence they can identify and solve
problems as they occur. They are thus em-
powered to focus on supporting local priori-
ties instead of enforcing district rules. They
May/June 2013
see a new and promising alternative to the
choice between centralization and loss of
control that faces district leaders in most
places.
3
Use new systems to make it easier
for principals to meet their current
responsibilities.
With the right set of software tools, site
leaders can fulfill state and federal report-
ing requirements around their school plans
more easily. A template-driven system for
accessing past plans, writing the current
plan, and communicating effectively with
staff and community members can save
principals time. That frees them to spend
their energies identifying key improvement
goals, developing innovative strategies for
meeting those goals, and testing ways they
can allocate scarce resources to support
those strategies.
These kinds of tools also facilitate prin-
cipals' ability to make the budget process
more transparent to their site-level constitu-
ents. Standardized reports, the automated
creation of charts, and even such mundane
details as meeting agendas and minutes can
all be incorporated into the software tools
and help make communications easier.
4
Giving principals power over al l
of thei r resources can be a game
changer.
Within the traditional school district
structure, it is almost revolutionary to talk
about giving principals control over all the
resources that go into running their schools.
But the experiences of several Los Angeles
USD principals demonstrate some of the
benefits that result.
In reports on their site-based budget-
ing experiences, these principals recounted
what happened when the district gave them
full budgetary control. For example, under
the new system each site would have to pay
for the cost of substitute teachers out of its
budget. As a result, the school staff saw the
cost of teacher absences as directly affect-
ing their school and the result was a marked
reduction in those absences. An immediate
outcome was that the school had more dol-
lars available to meet other needs.
Similarly, each site - rather than the dis-
trict as a whole - realized the financial ben-
efit of better average daily attendance, since
the increased revenue generated by better
attendance ended up in the school's budget
rather than the district's. Principals were
able to communicate this to their staffs, stu-
dents and parents with a resulting improve-
ment in student attendance as well.
Giving principals a full understanding of
the resources needed to run their schools is
consistent with how many other enterprises
function, and it can build capacity and con-
fidence. For example, when Brent Givens
began working as principal at Norwood
Junior High in Twin Rivers Unified, he was
stunned to find that he did not have any soft-
ware tools for managing a school budget of
more than $4 million a year. He was looking
for a tool, even something akin to what he
used for his personal checking account, but
the district's systems were designed for ac-
counting and compliance, not budget man-
agement.
"I was craving a tool that would help me
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10 Leadership
manage a significant amount of money, one
easy-to-use management tool that had all
the information I needed," he said. Once he
was able to access the software developed
through the SSFR project - the Planning,
Budgeting and Resource Allocation tool - "I
was doing the happy dance."
Principal Eric Davidson, at University
High in LAUSD, notes in a written descrip-
tion of his school's experiences that site-
based budgeting "respects the position of
the principal as somebody that can make
school-based decisions based on data and
student needs. .. .1 think it is just a matter of
having mutual respect and trust. I trust that
the process is going to be consistent and [the
district office trusts that] the decisions that
I am going to make are going to be for the
benefit of my students."
Steve Jubb, SSFR project director for
Pivot Learning Partners, said, "Through our
work on this project we saw clearly that site-
based budgeting can create a new appetite
among principals for site-level autonomy.
When school principals and communities
are given the opportunity to develop strate-
gies and to allocate the resources they need
in support of them, they expect to have the
flexibility to put their strategies into action.
The onus is then on district officials to find
out how to make things possible.
"The district can experience this as un-
wanted pressure or can use it to begin to shift
the district culture from one of compliance
to one that focuses on supporting schools.
One result can be a new and constructive,
but not always easy, dialog about how the
district itself makes decisions, develops im-
provement strategies, creates spending pri-
orities, and supports school sites."
5
Build in a robust set of data and
management tools to support evalu-
ation and continuous improvement.
A valuable by-product of developing new
systems and software to manage site-based
budgeting is that they can also provide a tool
for tracking high priority student outcomes
over time and tying outcome data to site-
level improvement strategies and expendi-
tures. Districts can thus use this change in
budgeting practices to inform their work
and examine which expenditures provide
the best return on investment in terms of
student learning.
If the experience ofthe SSFR project is
any indicator, a district that wants to move
to true site-level budgeting will need to pro-
ceed carefully and begin by laying a strong
Local finance reform - defined
as budget transparency, school
autonomy and accountability,
and equity in allocation of
resources - requires substantial
change in district culture.
foundation within the district office and
out at its school sites.
The first requirement is that a district
is seriously interested in and committed to
local finance reform, defined as increased
budget transparency, school autonomy and
accountability, and ultimately greater eq-
uity in the allocation of resources among
schools. This work requires technical, pol-
icy and process changes that together also
prompt substantial change in school and
district culture. It takes a sustained effort
and a willingness to change anything from
the budget calendar to the union contract. It
may also make sense to get outside expertise
and support from organizations that have
had experience going through this change
process.
Although these challenges need to be
taken seriously, site-based budgeting could
represent a critical strategy in the new age of
school district finance that appears to be on
the horizon in California. And the potential
pay-offs for district officials, school site lead-
ers and students could be substantial.
M a r y P e r r y , a n i n d e p e n d e n t e d u c a t i o n c o n s u l t a n t ,
s e r v e d a s d e p u t y d i r e c t o r o f E d S o u r c e f r o m 1 9 9 3 1 0
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