Student-Based Budgeting: An Interview with Tyler Koteskey of the Reason Foundation

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Student-Based Budgeting: An Interview with Tyler Koteskey of the Reason Foundation

An Education Policy Analysts View on Student-Based Budgeting

We sat down with Tyler Koteskey from the education sector of the Reason Foundation, a Washington D.C.-based think tank that promotes market incentives to improve education.  We discussed his views on student-based budgeting, school principal autonomy over budgets, and innovative school financial management and solutions.

As you read the interview, we want to know – what do you think of student-based budgeting?  Are you a principal, and if so, do you have the tools in place to succeed with a new budget model and a shift to student-based budgeting?  What do you think of this model and do you feel prepared?  Let us know in the comments.

Koteskey started off our conversation telling us, “Student-based budgeting is changing the system that we have in place to give the parents and kids, who are really the consumers of education, more control.”  For those of you not familiar with the term, Koteskey defines a best case use of student-based budgeting as “following the principle that the money should follow the child wherever the child goes to school, and it is through that system, of having the funds being directed to the child itself that helps reward success and hold failure accountable.”

Student-based budgeting gives the consumer, the child and parent, more control over the funding structure of the child’s education.  Koteskey also explains that student-based budgeting can help to facilitate school choice as the system can allow you to transfer resources to wherever the student is learning.

Further, Koteskey says “from an equity perspective, one thing that is nice about student-based budgeting is in the ideal form you weight the funding that the child receives based on his or her individual needs.”  By way of example, ELL learners, low income family students and special needs students can receive extra resources on top of whatever base funding amount they receive for the school year.  

As school principals have more autonomy over their budgets, they can use their knowledge on what works with how they spend finances to help their school succeed.  Koteskey explains “another thing that helps make student-based budgeting effective is giving principals autonomy over the school budget so they can use their local knowledge of what kids need in their schools, and to use resources most effectively.”

So what does it mean for principals to move away from a centralized budget and procurement process, where most of the decisions are made at the district level, to a decentralized system where decisions and responsibilities are placed upon the shoulders of the principals? Koteskey says that while, yes principals now have extra responsibilities, surveys from the states and districts that are using student-based budgeting, also known as weighted student formula (WSF) have been positive.  Specifically, an Education Resource Strategies survey shows that: “Eighty-seven percent of principals said they wanted to keep the budgeting and funding process they had [WSF].  It is a resounding, ‘yes’ that this is what we believe is best for our kids and our school site and ultimately what will make our district prosper.”

The data is showing support for the extra responsibilities that principals have been given.  In fact, Koteskey tells us that the majority of early adopters support having the autonomy to use their budgets the best way that they see fit, despite extra obstacles to managing a larger financial budget.  “We shouldn’t see the extra challenge as a reason not to distribute our [school] funds as fairly and equitably as possible, which I think student-based budgeting does,” says Koteskey, “This is where services like ClassWallet come in, in terms of making it easier for principals to manage the budgets through software.”  As student-based budgeting becomes more widespread there will be more incentive for principals to use services to help with innovative financial management.  

Koteskey also gives us a peek into his perspectives on what might come next: “I see educational savings accounts facilitating student-based budgeting potentially as the future, as sort of the next educational paradigm.  Not just talking about school choice, but course choice and educational choice — truly individualizing the experience for a kid.”

The way that school systems will adapt to this change remains to be seen.  Koteskey says, “there will be logistical challenges to allocate funds out to everyone, but to the extent we can get it streamlined and individualized through products like ClassWallet, and others that will develop, is how we enable these kinds of exciting advances to be more feasible than we could have ever done in the past.”

We hope you are as excited about the possibilities of innovative school financial management opportunities as we are here at ClassWallet.

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