Weighty Decisions

The idea of building school budgets around individual student is getting more attention.

By Jeff Archer

When Mark Smith was the principal of Houston’s Anderson Elementary School in the early 1990s, he often ran up against a maddening mathematics problem.

At the time, the Houston Independent School District doled out money to schools for nonteaching staff members—like assistant principals, clerks, and librarians—based on a set of enrollment formulas that topped out at about 1,200 children. With 1,570 students, Anderson got no more funding for such positions than did much smaller schools.

“It was like those other 370 kids didn’t matter,” recalls Smith, now a manager of school administration in...