The Mystery Of School Funding

Larry Price
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Wednesday - July 06, 2005
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Most of my experience in education has been in the public arena. It is a very complex system where nothing is clear-cut and simple. It would be safe to say any simple answer to solving funding problems is usually wrong.

In private education it is a little easier to come up with plans, objectives, evaluations and funding. In a private institution, the headmaster answers to a board of trustees. These are the people who conduct the search for their principal and work toward objects and goals for the students. It is a very orderly process and consensus is achieved relatively quickly after all the facts are in. The decision is made and everyone is notified and they move on to the problem of educating the students.

After that the most interesting problem is how to finance the school’s goals and objectives. An advanced curriculum depends upon highly trained faculty members. The problem with that is they cost more to employ. The secondary problem is once you get a highly qualified instructor, you have to worry about keeping him or her at the school. That means more money in the long run.


It is in this area that the private schools have the biggest advantage. When a private school needs more money to satisfy faculty members, all it does is raise tuition. To parents whose children enter private school, the increased tuition phenomenon is initially a surprise, but they understand the plan.

If teachers in the public school system want more money, however, they have to request it collectively. If one gets a raise they all get raises, and in Hawaii that’s roughly 13,000 individuals. The Hawaii State Teacher’s Association (HSTA) has done a good job of representing the teachers in the public school system. The superintendent of the Department of Education, Patricia Hamamoto, has done a good job considering the complexity of running a huge public school system. Before individuals criticize the system they should understand how complex it is.

For instance, the budgeting process is a maze of bureaucracy. The superintendent, who is a member of the governor’s cabinet, submits a budget to the Board of Education (BOE), which forwards it to the Legislature at the same time the governor’s office submits its educational budget. In the very beginning of the budgeting process there are many individuals involved, all with varying degrees of expertise. Throw in a few federal consent decrees and underfunded federal legislation like the No Child Left Behind Act, and you have a king-sized problem trying to explain to the public what’s going on.

The reason is simply because current levels of funding are not uniform in the public school system. Under traditional budgeting, there is no easy way to figure out whether campuses are getting their fair share.

Now there’s a new system, called the “weighted student formula,” that is supposed make this process clearer than it’s ever been. It’s my bet that the budgeting process is never going to be clear. The idea of studentbased budgeting is very popular with politicians. It will take time to see if principals can handle the additional stress.

Right now a principal gets allocated a pretty large amount of money. Whatever it is, about 80 percent of it will go for salaries. That will leave 20 percent to operate the schools. That’s not a lot of money leftover for operating expenses, which includes books, office equipment, supplies and anything else it takes to keep the school in good condition. Remember, in the public school system, the principals are obligated to run their schools in compliance with the collective bargaining agreement arrived at in a linear mode between the governor’s negotiators and the negotiators from the HSTA. The seven-hour days for public school teachers are mandated by contract. The principal doesn’t have the power to deviate very much from the collective bargaining contract.

The good news is that the new system will not take effect until the 2006-2007 school year. At the announcement, the BOE will need to approve the student- based formula and then notify each school how much money it has been allocated, then ask each school to prepare its financial plan with regard to its academic plans. The name of this whole process is summed up in the Reinventing Education Act of 2004. By reinventing, I suspect it means the schools’ principals will have more to say in how the money they are allocated is spent. That’s going to take a while to get used to.

It won’t take long for all the issues to be worked out; however, anyone trying to pinpoint how many dollars are spent on public school students will never be truly satisfied, because no one really knows.

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