NCPA - National Center for Policy Analysis

Student-Based Budgeting Gives Principals More Autonomy

March 25, 2013

The nation's third largest school district, Chicago Public Schools (CPS), will begin implementing student-based budgeting in the 2013-2014 school year. Like many other districts across the country, CPS will begin funding students, not institutions, while granting principals more autonomy over their school's budget. The change will increase equity, fiscal transparency and school performance, says Katie Furtick, a policy analyst with Reason Magazine.

  • A pilot program covering 40 schools citywide was implemented six years ago and the success of the program is leading to full implementation.
  • Despite success with the more equitable per-pupil school funding, some detractors, like the Chicago Teachers Union, believe the change will have negative consequences.
  • The president of the teachers union warns that giving principals more autonomy will incentivize principals to hire less expensive novice teachers and discriminate against veteran teachers.

The current formula provides one teacher for every 28 to 31 students (depending on grade level) and one assistant principal, an art or music teacher and a librarian or gym teacher for every 750 students in a school.

  • Under the current formula, schools with more experienced teachers receive more funds.
  • The student-based budgeting will correct this problem by funding schools with actual dollars instead of staffing positions.
  • Baltimore Public School, which implemented student-based budgeting in 2008-2009, made great strides in raising the number of public schools that were within 10 percent of the district's median per-pupil expenditure.

Aside from being more equitable for students, the new budgeting procedure creates more transparency in how schools are funded. It replaces complicated formulas with one single formula applied to all schools.

  • Under the new budgeting guidelines, CPS principals will gain autonomy over 50 percent of school budgets and must submit and receive approval for each school year's budget.
  • The remaining 50 percent, for programs like special education, magnet schools, English proficiency programs and Title I, will continue to be awarded through the old funding formula.
  • By allowing the principals more autonomy, each school's administration will be able to use its resources to best help its student population.

Source: Katie Furtick, "Chicago Schools to Implement Student-Based Budgeting and Principal Autonomy," Reason Foundation, March 18, 2013.


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