What is student-based budgeting?

Within the past ten years, some districts have moved to a student-based budgeting process. In formula staffing, the district allocates a specific position (teacher, counselor, etc.) for every "x" number of students in a grade or within the school. In student-based budgeting, the district allocates a dollar amount per student in the school. The school then converts those dollars into staff positions.

Marguerite Roza, a Senior Research Fellow at the Center for Reinventing Public Education, discusses a new system of allocation called weighted-student funding.

Most student-based budgeting systems use a weighted process for allocating money for each student. The student receiving the lowest amount of money does not have a weight, that is, he or she is considered baseline at 1.0. A dollar amount is assigned to that number— $4000, for example. This is usually an elementary student in grades 1–6.

The starting point for student-based budgeting is to determine the dollar amount for that student at the baseline of 1.0. The district must decide which central budgets will be collapsed into the student-based budget. For example, will the money for paraprofessional, custodians, clerical staff, and lunchroom workers be included in the base amount, or will those positions continue to be allocated to schools from central budgets. Non-personnel items may or may not be included in the base amount. Textbook money is a good example. Will textbooks be adopted for the entire district on a replacement cycle basis, or does the school decide which textbooks to use and when to purchase them? Does the school have control over its utility costs? Are utility costs a function of school size? If so, utility money might be allocated on that basis. In many situations, the utility costs are more a function of age and condition of the building and type of heating or cooling system used. In those cases, the district would be likely to keep utility costs out of school budgets.

Once the value of the general education or 1.0 student is calculated, additional costs for other students must be determined. Special needs students usually have the highest weight. For example, a student with visual impairments may have a weight of 5.0, which means that the school receives five times the amount of money for that student than it does for the general education fourth grade student. If 1.0 is $4000, the student with visual impairments would generate a payment of $20,000 to the school.

Staff, parents, and community members tend to agree that it costs significantly more to educate special needs students, and the weights for those students are usually established in a non-controversial manner. In many cases, districts receive extra money from states for special needs students. The costs for services required for each category of special needs student should be calculated in determining the weight for the student.

In addition, some districts choose to weight other students at higher levels in order to provide more services for them. For example, economically disadvantaged students may receive an additional weight. High school students and primary level students may also be weighted more heavily. These decisions are difficult to make and represent the priorities of the district.

The following is an example of how a student-based budgeting system might work for a K–6 school of 600 students. The weights assigned in this example are arbitrary.

Student-based Budget Model 1.0 Weight = $4000

Students	Weights	Dollar per Weight	Total Dollars
80 Kindergarten	1.2	$4800	$   384,000
220 Grades 1-3	1.2	4800	1,056,000
200 Grades 4-6	1.0	4000	800,000
20 Visually Impaired	5.0	20,000	400,000
40 Learning Disabled	1.5	6,000	240,000
10 Multiple disabilities	3.0	12,000	120,000
30 Emotionally disturbed	2.0	8,000	240,000
			*Subtotal $3,240,000

*Money allocated to the school on a non-per-pupil basis would appear next on the budget sheet.

When a school is allocated money on a per-pupil basis, it still must know the latitude it has over the use of that money. If the allocation is weighted for primary level students, does that mean that the school must spend that amount of money on those students or may it use the money for the overall education plan as long as it meets its goals and complies with all relevant laws, policies, and contracts? This is a critical question because if co-mingling of these funds is not allowed, the school's decision making capability is reduced.

The school must take the revenues generated by its students and provide the services required for those students AND meet its school improvement goals.

The description of student-based budgeting provided here is a synopsis and is intended to acquaint the reader with the concept. The movement from a formula-staffing system to a student-based budgeting system is complex and requires thinking through a number of very important issues, all of which cannot be addressed in this overview.