Changing the Way We Talk About School Finance

During the recent Educate Texas Leadership Forum, a group of education leaders met with Dr. Karen Hawley Miles of Education Resource Strategies to discuss fiscal management in school districts. Facing the long-term reality of doing more with less, Dr. Miles presented allocation strategies to maximize inputs in an environment of declining resources. Her recommendations are intended to move the discussion beyond “line item” budget cuts to meaningful discussions around how to put choices in context of investments. To push her audience from theory to application, she challenged participants to play an interactive game of “School Budget Hold ‘Em.”

Each small group had a limited amount of time to make choices about how to reduce the budget for District “X” by 5 percent, while in turn increasing investments by a commiserate amount. Our imaginary school district worked hard to make sure budget cuts and investments aligned with the long-term goals of the district. Should we cut teacher benefits by 10 percent if continuous support of effective teaching was a primary goal of our district? (We decided no.)

On the flip side, a significant investment in new teacher compensation structure appeared to be the perfect complement to our district goals. If we cut after-school programs (including sports), how would that exacerbate our dropout problems? If we closed underutilized schools, how could we sell it to the public? The exercise proved to be a labyrinth of competing priorities that school districts and school boards navigate routinely.

The framework of the game put our choices in the context of student needs and district goals - somewhat of a fundamental change to the traditional process. But even this improved process is limited by asymmetry of information around these choices. We were asked to make choices based solely on the percentage increase or decrease in the budget. While this approach may work in private enterprise (where both inputs and outputs are measured in dollars), the output of public education is measured in student achievement.

We wanted to know more about the impact of our choices on student performance in order to determine the greatest points of leverage. These questions seem to highlight the need for research and evaluation to uncover the impact of practice. To achieve cost-effective operations and high student achievement, education leaders need better information to drive targeted choices about resource allocation. This strategic approach, informed by research and analysis, is a very different conversation about funding public schools and one worth undertaking.