Key takeaways
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To maximize student achievement, money should be spent in ways that support a school's improvement plan.
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School leaders will need to understand where funding comes from and how it can be spent in accordance with federal, state, and local guidelines.
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Schools should develop a plan to consider short-term versus long-term spending.
Budgeting is a complex aspect of school leadership that is often considered after instructional decision-making. It is evident that money should be spent to support learner growth and achievement, but what is less clear is how much money each school will have, which funds can be used for different purposes, and how funding will fluctuate in the future.
School budgeting should be an intentional part of planning for each school year, as funds must be clearly earmarked in advance. This will prevent a school from running out of money before the school year ends. In addition to planning for a single school year, leaders should develop a multi-year plan to address larger cost items.
Understanding School Budgeting
In the United States, roughly 90% of school funds are provided at the state or local district. Historically, federal financial support has focused on at-risk or low-income students. These funds are regulated by the title under which they were created, i.e., Title II or Title IX. Each state department of education has its own formula for funding districts; these formulas use different data points to determine how much per-student funding a local board of education can expect to receive.
The remaining funding is determined at the local level and is based on taxes. This can be a combination of property and sales taxes. At the district level, the largest expenditures are payroll (salaries and benefits), instructional materials (curriculum and technology), and operational costs (building maintenance and transportation). Each school district will then allot a certain amount of money to an individual school.
At the local school level, funds received will be used to support instruction. This could include areas such as professional learning, classroom supplies, supplemental curriculum materials, field trips, and staff morale. Individual schools can also supplement their budget with support from a parent-teacher organization, fundraising, business partners, or community donations.
Each school year, there will be numerous requests for financial support. The most important question for each expenditure should be: “Does it support a specific goal of the school?” If the answer is no, the request should be at least postponed, if not outright denied. If the answer is yes, the request should be considered. A fair consideration should include a comparison with other possible solutions.
School leaders will be tasked with making budget decisions ahead of the school year. Working closely with a bookkeeper, the principal or administrative team will create line items in as many categories as necessary. It is a sound practice to create items with specific purposes to avoid spending money that is actually designated for a particular use.
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Receiving and Allocating Funds
It can be helpful to think of an individual school budget planning as a group of buckets. Each bucket will have a source of money. The source is important because oftentimes, there are stipulations on how money can be spent. For example, state money, given to a district and then divided among schools, can often be spent only on items that directly support student learning. This could include materials such as workbooks, supplemental curriculum, or class sets of books. In this instance, state funding would be in a state-instructional bucket.
Funds derived from local taxes might face fewer restrictions. In that case, a leader might have access to a teacher-celebration bucket. These funds could cover drinks and snacks for teachers at a meeting or the cost of lunch during an appreciation week. Another bucket could include purchasing supplies for student incentives. Although items such as those found in a school store can help motivate students, these are not considered instructional and, as such, are usually the responsibility of the individual school. Another high individual cost will be professional development. Although one could argue that ongoing teacher development directly impacts student learning, state funds are often off-limits for meeting these teacher needs. Professional learning is a broad term that can include conferences, webinars, planning days, and the cost of subs for educators attending these events.
Many individual schools benefit from the support of parent-teacher organizations/associations or booster clubs. The additional funding from these types of partnerships can extend beyond the school walls to include areas such as sports fields, playgrounds, and overall campus beautification. Additional money can also be raised through offering after-school programs or selling food items during the day.
When considering the sources for school budget planning, the importance of local funding becomes obvious. Property taxes and the involvement of outside supporting organizations create significant differences between schools based on homeowners’ income levels and the amount of disposable income available to a PTO/PTA or booster club. Essentially, the state will fund districts using a formula that takes only some of the community circumstances into account. It is then the responsibility of a local district or individual school to secure revenue to support school initiatives. This creates a wide disparity between schools within the state and even some within the same district.
5 Tips for School Budgeting
Once a school leader has a clear picture of the money available to spend and the school’s needs and goals, they can begin to create a short-term plan for the year, as well as a long-term plan for more expensive items.
1. Divide spending between departments and individual educators
At the end of each school year, meet with department chairs to create a list of needs for each department. The needs of the department or team should be all-encompassing, but it is best practice to allot a set amount for each teacher as well. This is normally a much smaller amount and should be offered to all educators.
2. Keep up with school spending
A school leader should estimate spending in each area and then meet with the bookkeeper at least monthly to account for money brought in and spent during that period. There are usually general funds available to be reallocated if overspending occurs. Some local school districts encourage building leaders to keep a portion of money in reserve from year to year.
3. Develop a multi-year plan for improvements and initiatives
When considering certain improvements, such as an elementary playground, a school could expect a cost of $100,000. In many instances, it is not feasible to spend this much money in a single year. Rather, many schools will fundraise by sharing a goal with the local community.
4. Understand that even the most effective budget will require support from the parents and families
This reality sheds light on the funding gaps that schools may face. Parents might be asked to provide school supplies, pay for field trips, contribute to class celebrations, or pay to cover the cost of joining a sports team.
5. Make sure the budget matches your schools' priorities
At the end of a quarter, semester, school year, or multi-year plan, it should be readily apparent that the bulk of the school’s spending is allocated to its greatest needs. If a school needs to raise literacy scores, then its largest expenditures should be items or supplies that will support improvement for teachers and students, such as platforms for supporting reading comprehension and literacy instruction.
