Child-Centered School Funding: Key to Education Reform

Published September 1, 1998

Knotty issues of school finance and school construction, raised by state courts in Arizona and Ohio and plaguing state legislatures nationwide, would be addressed by a “child-centered” approach to education funding that differs dramatically from the current, district-centered, funding method.

Researchers in Arizona and Ohio say the child-centered funding approach in effect “straps” a per-pupil education grant to the back of each child, who then carries the grant to his or her school of choice as payment for education expenses. This child-centered distribution of tax dollars for education closely parallels the senior-centered distribution of Social Security tax dollars to pay retiree living expenses.

Public education today is principally funded through a district-centered model, where education tax dollars flow from taxpayers to the local school district, whose board members then decide how the money is spent. Parents have little ability to influence school board spending decisions, and little recourse if the district’s educational program does not meet the needs of their children.

By contrast, child-centered funding “establishes immediate accountability within the public school system because it thoroughly integrates parental involvement into everyday education decisions,” according to William H. Wild, editor of the Ohio Education Report, published by The Buckeye Institute for Public Policy Solutions. As is the case with charter schools and private businesses, child-centered funding ties school budgets directly to the school’s ability to attract and retain paying customers.

The Buckeye Institute’s proposal for child-centered funding calls for a $4,000 Educational Opportunity Grant to fund the operational costs of providing a basic education for each child. The grant would be paid by the state to the child, and could be used to pay tuition at a public, private, or religious school. The local school district could, if it wished, supplement the grant with additional local funds. If the student enrolled in a school whose tuition was less than the $4,000 grant, the difference would be invested in an individual Education Savings Account in the student’s name, held for future primary and secondary schooling expenses.

According to Buckeye, child-centered funding meets all five of the requirements imposed by the March 1997 DeRolph v. State school funding ruling. Child-centered funding links funding to educational opportunity; eliminates the state’s School Foundation formula; makes the state responsible for school funding; eliminates reliance on the local property tax; and eliminates the need to borrow if the budget falls short.

“Child-Centered Education reform links funding directly to educational opportunity and provides concrete incentives for stakeholders within the system–principals, school boards, teachers, parents, and others–to focus their efforts on students,” note the authors of the Ohio Education Report. “Principals and teachers will have to persuade children and their parents that their school provides the best learning environment,” they add.

Paying for School Construction

Earlier this year, researchers at Arizona’s Goldwater Institute elaborated on the child-centered financing concept by calculating school construction and maintenance costs as a per-pupil dollar value. (In the past, child-centered funding proposals have calculated only operating costs per pupil.) The Phoenix-based group was an early advocate of market-driven education reform–“strapping the money on the back of the child,” says Arizona Superintendent of Public Instruction Lisa Graham Keegan.

In 1994, Arizona’s state supreme court ruled that the state’s process for funding school construction failed to provide a “general and uniform” school system, as required by the state constitution. According to Goldwater Institute researchers Michael Block, Jeffry Flake, Mary Gifford, and Lewis Solomon, the court’s requirements would be satisfied by a per-pupil grant of $650, which “would allow the vast majority of existing school districts to build new facilities and renovate old ones, on a pay-as-you-go basis.”

To arrive at the $650 figure, the Goldwater analysts surveyed the capital requirements of the many private operators of public charter schools in Arizona. The state’s new framework for public education allows open entry for public school operators; as a result, school districts are no longer the sole providers of public education.

“Because of charter schools, in the future most new public schools will not be built by school districts,” say the authors. “This new framework lends itself to child-centered funding.”

George A. Clowes is managing editor of School Reform News. His email address is [email protected].