School Spending Archive 2002
New Funding Challenges
Public education faces new demands and expectations on many fronts, and school finance is no exception. In particular, familiar ways of financing schools are called into question by five major developments: calls to link finance to student achievement; changing demographics; a more competitive marketplace for teachers; new technologies; and demands for more diverse education providers and for more parental choice. "Business as usual" in school finance will not be enough to meet these new challenges.
Who Holds the Purse Strings
School finance was once the clear and protected domain of board members and superintendents. Schools received money from state and federal governments. With few limitations, and most of those on federal funds, the school board then decided how the money should be spent. State authority, however, is now eclipsing local authority in school finance matters. If the trend toward state centralized financial power continues, school boards could see themselves edged out of their roles as citizen overseers of their schools.
The New Finance
It is time to overhaul the way states finance education. The national emphasis on teaching all students to high standards has produced a need for new models of state finance systems that align school funding more closely to standards-based reform aimed at high outcomes for all students. The new finance systems should rest on a concept of quality education for all children, not basic or minimum education.
Construction costs eat up a sizable portion of school budgets. In 1997-98, the nation's school districts spent $36 billion for capital outlay and debt service to build new schools, to undertake major renovation projects, and to construct ancillary facilities. Considering how much money is at stake, it's not surprising that everyone from teachers to taxpayers and from school personnel to state legislators has an interest in who pays—and how much is paid—for school construction.