Austin school district seeking millions to explore a new way of funding schools

The Austin school district is seeking grants for about $2 million from two charitable foundations to study and possibly dramatically change the way it spends money by ensuring that government funding is more closely tied to students.

District officials said they have applied and are in final negotiations for a $1.6 million grant with a local foundation and have applied for a $395,000 grant from a California-based foundation. The money would pay for the development of a new and, many argue, more equitable student formula for the distribution of public money that the district could begin using as early as the 2014-15 school year.

Currently, the district gives what it collects in state per-pupil funding and local taxes to its campuses based mostly on state staffing formulas, program requirements or building needs. In that traditional method of distribution, under which the money isn’t necessarily tied to a student, particularly if he or she transfers schools, some say there is no way to ensure that the true cost of educating a particular child is covered.

It’s why several districts — including Chicago, Denver, Boston and Houston — have changed to a new way of distributing money to campuses that more closely ties dollars to students. Such systems account for the different costs of educating students by giving “weights” for certain factors, including whether they are poor or gifted or if they do not speak English as a native language.

This is the first time that Austin has seriously discussed such a system, which ensures that extra money follows needy students but which critics say could financially stress small, underenrolled schools.

The Austin school district has long struggled with funding equity, said Superintendent Meria Carstarphen, “and I would say probably has the vestiges of some of that transition in the area of integration and desegregation.”
“These are things that when the people of Austin talk about experiences in AISD and resources for kids … you hear many mixed stories,” Carstarphen said.

Nicole Conley-Abram, the district’s chief financial officer, said a student-based formula also addresses the issue of efficiency at a time when the state is cutting funding.

“We talk about ‘something cool in every school.’ Unfortunately, there are funding limitations,” she said. “If we’re ever going to get there, it really is about getting schools to really use their resources in the most efficient way to realize their own local strategies for innovation.”

Both foundations that the district applied to have given money to education programs in the past. District officials said they applied for the larger grant in August and expect to hear soon whether they will receive it.

If the donors decide to fund the project, the school board has already approved hiring Massachusetts-based nonprofit Education Resource Strategies for the next two years to determine where the district’s funding inequities are and to create a new student-based formula. The board would still need to approve the switch to a new system after pulling it from the consent agenda at its last meeting.

District officials said the effort would start with a “data dive” by Education Resource Strategies to find out where the inequities are and would be followed by an intense outreach effort, so people in the community have a say in how the district should remedy the inequities. The community will have to decide on the “weights,” or extra money, that a student would receive and help decide whether subsidies should be provided for certain kinds of programs or community values that Austin might have.

“It really is a way for local school communities to be able to align their resources to match their kids’ needs,” Conley-Abram said. “It’s about having transparency in the way we allocate, and it works us toward establishing better equity.”

Because principal recruitment and leadership requirements would change, Conley-Abram said the consulting partnership with Education Resource Strategies would also have a large training component so principals are prepared to take on the additional responsibilities that come with managing larger budgets. The district will also hire several people to help with outreach efforts to ensure the community is involved in the development of any new formula.

In the Houston school district, which has had a student allocation model for many years, Gayle Fallon, president of the Houston Federation of Teachers, said there have been good intentions but also a lot of unintended consequences as a result of the change.

She said because they hold the purse strings, some principals become much more powerful under such systems – which is good if those principals are able to handle the new responsibilities. She said there have been cases in which principals had to hire business managers or spent their entire substitute budget and told teachers they could not take sick time.

“It is very easy to give too much power without enough oversight,” she said. “We found that the first position added and the last to be cut ended up being the assistant principal.”

Fallon said the change can also have an adverse effect on small or underenrolled schools because they can’t run on the economies of scale that larger schools do. She said several small schools ended up having to cut nurses, librarians and art and music teachers because they simply couldn’t afford them, which led to parent dissatisfaction and even lower enrollment.

In Austin, exactly how much money to put into such a formula and how much autonomy principals would be given over how to spend it would be determined over the next two years with community input, district officials said.

Carstarphen said it’s not a given that such a system would have a negative effect on smaller schools in Austin. She said that until the district looks at where the inequities truly are and makes “value judgments” on staffing and other issues, it’s hard to say what the affect would be.

“I could see, based on weights, where you would have a small school but because of the demographics you do have enough resources to run a solid program,” she said, adding that patience will be needed as the district works through the process.

“I know it’s not going to be easy to have conversations that are just difficult in our society today anyway,” Carstarphen said. “This is where issues around race and discrimination and people’s personal experience will probably rise to the forefront, and that’s hard. … We want their engagement to help us to develop options … (and) think through their value systems on what’s appropriate for our district.”

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