Read the article as it originally appeared in The Commerical Appeal.
Schools within the Shelby County Schools system are funded inequitably, and with larger gaps than in similar districts, according to a report given to the Board of Education on Tuesday.
Sometimes, a school receiving more money than another is intentional, like in the Innovation Zone turnaround program or Optional Schools.
Less intentional is the district's number of smaller schools — which are more inefficient to run and cause an extra $8.8 million in operational costs — along with an ad-hoc system for approving individual funding requests, accounting for another $8 million, according to the report.
The analysis did not identify funding levels of individual schools.
The review was the first step in the district establishing a system of student-based budgeting—a way to fund schools more equitably, and based on the needs of students in each building. The change also seeks to add transparency to the way schools receive dollars.
Board member Chris Caldwell said the report showed the district attempting to put dollars where the need is highest, but without a clear system in place.
"I think it was attempting to address the needs, and this is another way to look at it to make sure we’re doing it in the best way or the more efficient needs," he said.
Once federal, state and local entities allocate their funds to SCS, it's up to the district to divide up the dollars across schools.
The report, created by Education Resource Strategies, shows some schools receive two times more per student than other schools, even after adjusting for the needs of students in those buildings.
David Rosenberg, a partner with ERS who presented to the board, said there doesn't appear to be a correlation between any student demographic and who receives more or less money.
"The question is, is the variation intentional and appropriate for what we want to do?" Rosenberg said.
For example, the SCS iZone pays teachers and schools leaders more and extends the school day an extra hour. Optional Schools also receive extra resources for their programs.
But while the parameters of the iZone mean spending about $1,200 extra per student, the actual additional investment is about $1,931 extra, according to the report. That's a total of $20.7 million extra being spent on students in just 21 schools.
Rosenberg said when the district has vacancies or other discretionary money to spend, it often ends up in the iZone. The report makes no judgment on whether that's the right or wrong way to spend the money, but rather shows how much is actually being spent.
The report showed 84 percent of principals believe the current funding system is transparent, but only 45 percent believe it's equitable.
"While principals say there’s transparency, the reality is I don’t think they have a full understanding of all the resources that are being assigned to their school or being managed centrally," Rosenberg said.
Student-based budgeting also gives principals the freedom to allocate money within their schools as they see fit, within parameters set by the district and state law.
Just 33 percent of principals surveyed for the report said they thought they had enough flexibility over staffing and budgets.
"The idea is you’re putting more responsibility in the hands of school leaders," Rosenberg said.
While the school board passed a resolution in March supporting the exploration of student-based budgeting, and the district has a limited contract with ERS, the board will still have a say-so in how the district proceeds. Board members have issued concerns about winners and losers in a system that would take away funding from some schools and give it to others. A hold-harmless provision, for example, that a school wouldn't lose more than two teaching positions, has been presented as a way to mitigate that concern.
Chief of Finance Lin Johnson said the board would continue to have control through the process.
"We’re going to bring policies and those policies will be voted on… by the board," Johnson said.
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