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Power of the Purse

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How much flexibility principals can eke out of the new system depends on their experience, their skills, and their willingness to take risks.

For school-based budgeting to produce significant results, "you have to have some ability to change what you're doing with your dollars that are spent on staff because that's all your budget," says Ms. Miles, the director of Education Resource Management Strategies, a Dallas-based consulting firm that specializes in issues of resource allocation.

Yet in most cases, schools have been given limited, if any, control over personnel funds.

In Boston, schools receive an allocation for staffing and instructional supplies. Theoretically, they can distribute that money to meet the educational priorities of their school.

"The reality is that there are a lot of constraints on what they can and cannot do," says John P. McDonough, the 65,000-student district's chief financial officer.

'Slow and Tortuous'

Milwaukee began to decentralize its budget in 1991-92, when each of the district's 162 schools was required to involve parents and teachers in decisions at the school site. At the same time, the central office began shifting the control of money out to the schools.

The department of curriculum and instruction, for example, spread $1 million among the schools, based on their enrollment, for spending on professional development. In the past, department officials had determined what training teachers needed and when.

Four years ago, the district shifted control over more than $10 million for building operations to the schools. Principals now oversee the staffing levels and purchasing of supplies for cleaning and minor maintenance. Three years ago, the district decentralized money for guidance counselors.

The school system also created a school budget committee made up of principals and district-level administrators to help compile the districtwide budget and advise the superintendent about the process of decentralization.

This school year, about 72 percent of the district's $813 million budget is under the direct control of schools.

Principals now have some say over the mix of staff positions within their buildings. They decide how many substitute teachers to use and which textbooks and supplies to buy.

But they still have little control over who works in their building. Teachers fill job openings based primarily on seniority provisions in the union contract. Schools have more control over new hires.

Warren D. Braun, the vice president of the school board, describes the massive shift toward school-based budgeting as "slow and tortuous." Once personnel costs are accounted for, he says, there's little money left over for schools to innovate.

'A Possibility Thinker'

Even so, principals say the situation is light years ahead of the way things used to be.

"The empowerment to use that funding in ways that are appropriate to your school is one of the most exciting things that has happened," says Denise Neicheril, the principal of Clarke Street Elementary School.

When she started as principal 12 years ago, she would receive long budget sheets that were determined by the board. Schools could not transfer funds from one line item to another. Anything she wanted, she had to request in writing from the central office. Even if the answer was yes, the process could take months.

"Then there were very arbitrary things that were almost humorous," Neicheril says. "The school would get $2,000 in the budget for a new copier. And if I said, 'I have some money from donations; I want to buy a specific kind of copier,' they'd say, 'You can't do that. Only middle schools can purchase that kind of copier.'"

How much flexibility principals can eke out of the new system depends on their experience, their skills, and their willingness to take risks.

Clark Lovell, the principal of Alexander Hamilton High School, estimates that of his school's $7 million budget, only about $1.5 million is really discretionary money.

"However," he adds, "I can manipulate figures. My staff and I can do things to improve those numbers, so that I can have more money left over at the end of the year."

Last year, for example, the school decided to cover teacher absences internally instead of hiring substitutes. That saved $30,000, which the school poured back into its programs.

"The beauty of all this is that people are making much better decisions that they would never have made before," says Robert C. Jasna, the superintendent of the 106,000-student district.

'Shifting the Blame'

Often, however, schools are given monetary authority only when budget cuts are needed.

Seattle, for example, must reduce spending by $20 million over the next two years, at the same time that it is shifting more control of those resources to the schools.

"One of the ironies is that, in many places, school-based budgeting is being talked about and implemented simultaneously with very controlled spending," says Berne of NYU. "So people at the school level often see this as simply shifting the blame for making cuts."

Union cooperation and participation are often vital in the shift of control to schools.

Unions often worry that school-based budgeting will result in a loss of jobs or privatization of services. In the Edmonton public schools in the Canadian province of Alberta, for example, district officials pushing a decentralization plan had to assure employees that, though their responsibilities might change, they would not lose their jobs.

'The beauty of this is that people are making much better decisions that they would never have made before.'

Robert C. Jasna
Milwaukee superintendent

In Los Angeles, the 192 schools with control over their budgets can purchase some services and supplies from outside vendors, says Henry Jones, the district's chief financial officer. "But when it comes to the big items that may affect personnel," he says, those issues are still being negotiated.

Schools that can spend their money and organize their programs differently often require exemptions from provisions in the union contract that specify everything from class size to release time for teachers.

The Milwaukee Teachers Education Association has approved almost 50 such exceptions over the past three years. Governance teams at 10 schools, for example, can now recruit and select teachers without regard to seniority. Other schools have experimented with longer school days and years as well as with block scheduling.

But the union has refused to give school administrators substantial control over who works in their buildings. The union also put its foot down when the district proposed creating "enterprise" positions within its central office.

Under that proposal, departments such as curriculum and instruction would have allocated some of their monies directly to schools, which could then have decided whether to buy back services such as teacher evaluation and support. If enough schools had wanted the service, the department would have created a position and hired someone to staff it.

The union viewed the proposal as a first step toward privatization.

"Organizationally, we've kind of drawn the line and said that decentralization, as far as it's been implemented, is fine," says Barry Gilbert, the union's assistant executive director. "But we're opposed to the buyback and contracting out and privatization of services, and we've been supported on that by the board."

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