Fairness and Opportunity: Bringing student-centered education funding to South Carolina students

Palmetto Promise Institute partnered with the Foundation for Excellence in Education on this report.

Read the full report here.

The Governor, Speaker of the House, and President of the Senate are calling for a major overhaul of the way education is funded in South Carolina. A key element in the legislative and public debate is “backpacking,” or ensuring that public funding follows the child to the public school of his or her parents’ choice.

Building on PPI’s solutions-focused collaboration with Dr. Rebecca Gunnlauggson in Funding Our Children for Success, Matthew Joseph of the Foundation for Excellence in Education (ExcelinEd), a veteran school finance scholar, analyzes the fiscal aspects of education in South Carolina and explains why student-centered funding matters for students, parents, and teachers.

This comprehensive but comprehensible analysis shows that:

• Though the Education Finance Act (EFA) is built on the specific needs of specific children and the unique wealth characteristics of a district, most (nearly three-fifths) of South Carolina education funding for a school or a district is not tied to the number or types of students served.
• Examples of inconsistencies without a student-centered approach include variations between adjoining districts, differences in funding for a typical public school versus a charter school, and variations among charters with different authorizers or education delivery methods (brick-and-mortar versus virtual).
• The question of student-centered funding is not just an academic exercise. There are serious implications of this policy debate for students and their parents. Without tying funding to the student, schools have no flexibility or incentive to grow or recruit, there is not the transparency required for parents to know that their public school choices won’t hurt their children, and funding will continue to vary unfairly and widely depending on the ZIP code of the school.

Recommendations for improvement include:

• folding all state funding into an EFA-type funding formula
• making local funding student-centered as well
• Incorporating charter schools into the funding formula to acknowledge charters as a permanent and proven part of our education ecosystem rather than keeping funding within the section of the budget (EIA) intended for new educational innovations and practices.
• ensuring that funding follows a student from school to school
• linking at least a small percentage of funding to performance

Key Takeaways:

With so much of the funding dependent on factors other than student enrollment and characteristics, districts and schools have greater difficulty using funds in the way they feel best serves their students. South Carolina’s funding model places the focus on inputs, rather than student outcomes.

South Carolina’s lack of student-centered funding creates disparities between districts, regardless of enrollment and need. The disparity is even worse for public charter schools and their students, which receive about half of what traditional school districts receive.

Introduction

As South Carolina focuses on preparing its students for the 21^st century, its school funding system is trapped in the 20^th—fractured and archaic. But, a shift to student-centered funding can create the freedom and incentives to unleash opportunity in every district and school in the state.

Student-centered funding means that South Carolina would provide funding for each student based on his or her needs.  Funding would fully follow students when they move to different districts or from a traditional public school to a public charter school. It is a commonsense way to maximize opportunity for students. Districts and schools would understand clearly how much funding they would receive and why, and they would have the flexibility to use funds more effectively for their students. High-performing districts and public charter schools would have an incentive to attract more students, as they begin to receive the resources needed to educate them. Parents could move their children to the best school for them without giving up services.

In some states, over 70 percent of funding is student-centered. Yet, in many states, such as South Carolina, a significant proportion of education funding is locked into specific districts, schools, staffing positions, services and programs.

This report examines the extent to which funding in the state of South Carolina is student-centered. It identifies the large portions of funding that are not student-centered and explains why. Finally, this analysis provides policymakers with the steps they can take to meaningfully increase the proportion of education funding that is truly student-centered.

Explaining Student-Centered Funding

Student-centered funding is also referred to as weighted student funding, backpack funding, student-based allocation or student-based budgeting. The core principles of student-centered funding are relatively simple. Under a student-centered funding model in South Carolina:

• Nearly all funding would be provided to districts and public charter schools based on how many students they serve;
• Funds would also be provided to address specific needs and challenges those students might have; and
• Funding for each student would follow him or her to any district or public charter school to ensure his or her needs can be met, regardless of district boundaries.

It would mean that each district and public charter school in South Carolina would receive a base funding amount for each student, with additional funds, also called weights, for students who have special needs or disadvantages. Funding would fully follow students as they move from district to district and from traditional public school to public charter school.

There are several key advantages to student-centered funding in South Carolina.

• It is more transparent. It is clear and easy to understand how much funding each district and public charter school gets and why.
• It empowers school districts and public charter schools. District and public charter school leaders will have flexibility to use funds to meet the unique needs of their students.
• It empowers parents. Parents will be able to choose the district and public charter school that is best for their children, with the money fully following their students.
• It is fairer. All students in South Carolina will receive similar resources, with additional funding for students with special needs or disadvantages.