Education Funding

Diverse Panel of K-12 Leaders Backs Weighted-Student Method of Funding

By David J. Hoff — June 27, 2006 3 min read

A diverse group of leaders in K-12 education policy are advocating a dramatic change in the way schools are financed, saying they should receive money based on the number and types of students they serve and that principals should determine teacher pay, professional development, and many other matters currently set by districts.

The bipartisan coalition of more than 70 members—which includes three former U.S. secretaries of education, former governors, and many of the significant players in the K-12 policy community—says that the new method fits the changing educational environment. Students now have the option of transferring out of their neighborhood school and schools educating the lowest-achieving students are under pressure to improve their educational attainment.

“This expanding range of options, and the possibility of even greater diversity of choice in the future, can be a key engine for reform within public education,” the group writes in Fund the Child: Tackling Inequity and Antiquity in School Finance, a 67-page report outlining the proposal that was released today.

“But our school finance systems are still deeply rooted in an era where nearly all children attended an assigned district school. In that era, it made sense to simply fund districts,” it says.

The bipartisan group includes Rod Paige and William J. Bennett, who both served as U.S. secretary of education under Republican presidents, and Shirley M. Hufstedler, who held that post under President Carter. Other supporters include Democrat James B. Hunt Jr., the former governor of North Carolina; former U.S. Rep. Bill Goodling, a Republican who once led the House of Representative’s education committee; and John Podesta, a chief of staff under President Clinton.

Modernizing School Finance?

To modernize the method of financing schools, Fund the Child says, policymakers at the federal, state, and local levels need to switch to a “weighted-funding formula”—a process created in Edmonton, Alberta, in the 1970s and now being experimented with in Seattle, Hawaii, and Houston. Under the model, schools are awarded a grant based on the number of students attending, with extra money following students who need services such as special education, bilingual education or English-language instruction, or help catching up to grade level. The school’s leaders then decide how to allocate those resources for salaries, materials, and staff development.

While schools receive weighted per-pupil funding under most state and district financing methods, decisions made at the district level often wipe out any potential benefit for students attending those schools, the report says. Districtwide collective bargaining agreements, for example, usually give teachers with seniority the option of claiming faculty positions in whatever school they wish. If experienced teachers choose to work in schools with high-income students—as often happens—their higher salaries boost the amount of money flowing to that school.

With principals setting pay scales and hiring teachers on their own based on the schools’ ability to pay from their weighted-student grant, money wouldn’t be diverted away from the neediest schools, according to the manifesto.

Weighted-student funding appeals to people across a broad political spectrum because it answers problems raised by many sides of the debate, said Chester E. Finn Jr., the president of the Thomas B. Fordham Foundation, the Washington-based think tank that organized the effort.

For liberals, it addresses inequitable financing of schools, he said, and for conservatives, it would assure that money follows students to charter schools or public schools of choice.

Mr. Finn said the call for weighted-student funding also is an effort to provide an alternative to the “65 Percent Solution,” an effort to get states to pass initiatives and rules that require districts to spend at least 65 percent of their budgets on classroom expenses.

The new campaign’s Web site,, provides a side-by-side comparison of the two funding proposals.


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