Design-Based Budgeting: A New Alternative to Weighted Student Funding Formulas
As we enter this next phase of post-pandemic schooling, many district leaders are reevaluating their school funding systems in the context of tighter budgets, heightened student and educator needs, and a desire to sustain effective innovations that federal relief dollars made possible during the pandemic. Some districts are considering adopting a new funding formula to better meet the unique needs and challenges of post-pandemic schooling.
This context raises a critical question: What school funding approach will best meet these unique needs, opportunities, and challenges? Should leaders revise widely used staffing formulas? Move to or adjust student-based budgeting formulas? Employ an entirely new system?
Our experience working with systems nationwide has shown us that there isn’t one right school funding formula because each district’s context matters so much. But we also believe there’s a better approach to redesigning school funding systems—a new approach we’re introducing as design-based budgeting. Rather than starting from a funding formula, this approach starts with the end in mind—the school designs and models we want to enable and create.
We believe there’s a better approach to redesigning school funding systems—a new approach we’re introducing as design-based budgeting. This approach starts with the end in mind—the school designs and models we want to enable and create.
What Is Design-Based Budgeting, and How Is It Different From Other Weighted School Funding Formulas?
As a new approach to funding formula design, design-based budgeting aims to fully integrate school organization decisions with school funding decisions to enable leaders to determine school budgets and staffing levels by school service delivery models—not the other way around.
Leaders can use this approach with different funding formulas, including student-based budgeting and staffing-based formulas. The key difference between this approach and common approaches to funding formula design is that design-based budgeting centers school resource decisions on research-backed practices and school delivery models. In contrast, other approaches anchor those decisions on dollar amounts and staffing ratios. Design-based budgeting also addresses differences in school and student needs.
Keys to Design-Based Budgeting Success
Start With Research-Backed Practices and Models—Not Dollars and FTEs
A key premise of design-based budgeting is to start with research-backed practices and models for organizing resources and then determine the required school allocations—not the other way around.
In most school funding formulas, district teams determine school allocations first, and school teams then organize resources based on their allocations. This process can result in school leaders making do with what they have, or making small, incremental changes to school designs.
When taking a design-based budgeting approach, however, district and school leaders first ground their decisions in the research-backed models that have been shown to meet district priorities—such as making investments in personalized instruction, teacher professional development, and instructional leadership. Then, they identify the staff and resources needed to enact those models. Leaders can then work from this vision to make choices and tradeoffs that fit within their budget.
Differentiate Practices and Models by Student and Educator Need
Effective funding formulas are need-driven, meaning they distribute resources in ways that ensure students and schools with higher needs receive additional funding compared to schools with lower needs.
We often see school funding formulas that don’t result in meaningfully different investments across schools of differing needs. In other cases, additional dollars put toward high-need schools don’t clearly connect to the changes that effectively address these needs, such as the extra cost of sub-scale schools in which high-needs students are often concentrated.
With design-based budgeting, this differentiation starts with the service model. Leaders first identify and articulate the resources necessary to support students and educators with additional needs. They could explore targeted intervention strategies like tutoring, for example, or increase coaching and development opportunities for new teachers in high-need schools—all above and beyond core supports.
After leaders articulate these strategies, they can then put the staffing and funding in place to match their desired approach.
Engage School Leaders in Adjusting Service Delivery—Not School Budgets—and Building From Prototypes
School leaders need to be deeply engaged in resource decisions that impact their schools, as each school’s student needs, community needs, and the combination of staff expertise and experience influence the way they can optimize resources.
We often see the extremes, however. School leaders either have very limited discretion and decision-making power related to their school resource decisions, or they’re given significant autonomy to figure things out on their own without the necessary support from which to build.
School leaders should focus their decision-making and input primarily on adjusting school design models and strategies, rather than on adjusting staffing ratios. Additionally, they should build from prototypes and guidance, in collaboration with district leaders—particularly in times of rapid evolution or innovation, such as when leaders explore making changes to teacher time and schedules.
School leaders can’t make these systemic changes on their own. Instead, they must work together with district leaders to enable these changes and navigate the disruption that sometimes accompanies required resource shifts.
What Can District Leaders Do Now to Move Toward Design-Based Budgeting?
As district leaders approach the next budgeting cycle and begin to reevaluate their current school funding formulas, they can take steps to move toward a design-based budgeting approach.
1. Assess Student and School Needs
Create transparent, objective measures of student and school need to better target resource allocation by:
- Exploring different need characteristics across schools in the district, such as measures of free and reduced-price lunch, English language learners, students with disabilities, student mobility, and teacher and school leader capacity.
- Assessing the relevance and variation of factors across schools in the district. How much variation in need exists? Where are needs concentrated?
- Codifying a definition of need by creating a need index or defining different need thresholds.
2. Assess the Current State of District and School Funding
Evaluate how the current funding formula aligns with student and school needs, district school design priorities, enrollment, and financial sustainability. Explore these questions:
- Do higher-need schools receive more resources than lower-need schools? If so, to what extent do leaders use those resources to support research-backed models for supporting students? Do leaders experience barriers to using extra resources effectively, such as small school sizes or antiquated rules around flexibility?
- How have school enrollment patterns changed since before the pandemic? Have school resource levels evolved to meet new enrollment patterns?
- How is the district revenue picture changing? Will the district need to reduce school-level resource use to meet the financial outlook?
3. Identify and Invest in Priority School Design Models
By differentiating school design models by school and student needs, leaders can target priorities to their unique district context. They can do so by:
- Identifying which research-backed strategies and models to prioritize based on district need and priorities. Define how the approach will differ depending on student and school need profiles.
- Exploring and developing staffing, scheduling, and service prototypes that will enable those strategies.
- Connecting each strategy back to its required resource levels and identifying investments to bring those strategies to life.
Design-based budgeting will require a different way of thinking about school funding, starting with creating a clear vision for what schools look like. This might feel like a “pie in the sky” approach in which the vision isn’t connected to financial realities. But we’ve found that with this vision in place, leaders can better identify strategic tradeoffs and find creative ways to organize resources to build toward the school designs that will make the biggest difference for students and educators.
How ERS Can Help With Design-Based Budgeting
Curious to see how design-based budgeting could transform your district’s approach to resource allocation? Reach out to ERS today to learn how our tailored services can help your school system optimize resources, improve equity, and drive student success. We’d love to collaborate to transform the way you budget and help you make a lasting impact on your students and educators. Contact us now to get started!