NCPA - National Center for Policy Analysis

Student-Based Budgeting Helps Principals Be More Effective Educators

September 24, 2015

Shifting to student-based budgeting (SBB) causes concern among policymakers because they wonder if principals will use the time and skills needed to control and manage their school budgets. However, when implemented effectively, SBB empowers principals to fully align their schools resources and strategic priorities without needing significant technical expertise.

During the transition, a principal must go from a highly-centralized environment where many key decisions are made at the district level to one in which they're leading more robust strategic planning processes at their owns schools.

SBB is most impactful when it seamlessly integrates equitable funding, principal autonomy and Strategic School Design. The latter one is a planning framework in which school leaders are "lead designers" in determining how resources are allocated.

Some advantageous features of SBB are:

  • A principal's role as an instructional leader is enhanced because strategic-school design engages campus leaders and teachers in more meaningful planning.
  • The flexibility provided to schools offers them the opportunity to devise innovative solutions that might not be possible in conventional centralized budgeting.
  • It serves to immerse principals more deeply in what is working and what is needed at their schools.

A critical component of SBB implementation is deciding how to transition budget autonomy to school principals. Some school districts opt to give autonomy to high-performing campuses only or grant levels of autonomy based on outcomes.

Likewise, each district must decide what decision-making authority remains at the district-level and what is handed over to schools. Fortunately, many principals already have a solid foundation of skills to work with.

Source: Aaron Smith, "Student-Based Budgeting Helps Principals Be More Effective Educators," Reason Foundation, September 1, 2015.


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