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Top 5 Education Finance Predictions for 2017

Jess Gartner makes 5 edfinance predictions for 2017.

With the recent reauthorization of federal education policy (ESSA) and a new White House administration, what’s in store for the future of education finance? Allovue’s CEO Jess Gartner makes her top 5 education finance predictions for 2017 and indicates what these shifts in policy and strategy will mean for districts.

1. Funding equity

Since the first administration of the National Assessment of Educational Progress in 1969, the United States has shown evidence of persistent racial and socioeconomic achievement gaps in education performance. With the passage of the Every Child Succeeds Act (ESSA), districts and states will be mandated to closely examine resource equity. In other words, for over 45 years we’ve been looking closely at the gaps in educational outputs, but now we see increased attention to the inputs: how are schools, districts, and state allocating resources? Are there equitable distributions among the most vulnerable student populations? ESSA also requires reporting at the school level, which means schools will have a critical unit of change for resource equity.

What does this mean for districts?

Districts will need to ensure that as many instructional resources as possible are being accounted for at the school-level. In some cases, this may require revisions to the chart of accounts or accounting processes. Additionally, updates to financial data systems will reduce the burden of new state and federal reporting requirements.

2. School level autonomy

Recording expenditures at the school level will likely illuminate resource disparities - particularly in school districts with diverse populations. Some school districts like Baltimore City, Cleveland School District, and Indianapolis Public Schools are working to improve resource equity by implementing weighted-student funding or student-based-budgeting models. Under such models, student need is quantified and assigned a funding weight, based on the factor like grade level, language proficiency, and economic status. Student-based funding models are commonly accompanied by increased school-level autonomy, recognizing that school leaders are uniquely equipped to make resource decisions for their student populations.

What does this mean for districts?

Changes to a funding formula and decentralizing dollars require careful planning, community buy-in, and financial management training for school leaders. Partners like Education Resource Strategies, Afton Partners, and Allovue, can help provide best practices and operational efficiency.

3. Real transparency

Increased accountability and transparency should accompany increased autonomy. School leaders will make a variety of choices related to staffing, technology, and curricular resources, and it will be essential to create transparency around these decisions. The prediction is for real transparency because many current efforts at financial transparency fall short: public financial data is often over a year old, static, and difficult to interpret by non-accountants. Real transparency means that data is dynamic, current, contextualized, and easy to understand.

What does this mean for districts?

School districts must invest in dynamic data systems that provide financial data for analysis in real-time - not autopsy reports of last year’s accounts. Additional training and professional development should be made available to school leaders to analyze finance data and make strategic, operational decisions. This investment in real transparency will also improve the quality of conversations about budgets with the board, parents, and community because it is easier to understand and appropriately contextualized against the district’s unique circumstances and goals.

4. Connecting spending to outcomes

Improvements to school-level accounting and budgeting mean that districts will have an unprecedented ability to analyze not only resource equity but also resource effectiveness. Districts should connect resource allocations to overall district goals and strategy, and evaluate the cost-effectiveness of resources for driving student outcomes. This is one of the most challenging predictions for school districts because it must build on a foundation of school-level accounting, a clear strategic plan, dynamic data systems, and professional development for school and district leaders. However, school districts are already being asked to do more with less, and it is likely that state legislatures and school boards will apply more pressure to demonstrate evidence of the return on educational investment.

What does this mean for districts?

Don’t try to do everything at once. Critical analysis of resource equity and effectiveness often requires years of building capacity and infrastructure, but it’s attainable with the right plan and partners. Start with the basics of ensuring that accounting structures and processes are recording the right level of data. Partners can help districts formulate new funding models, train school leaders, and implement new technology systems to make connecting spending to outcomes possible.

5. Collaboration between charters and districts

School districts around the country are running into financial challenges - and in many cases, fiscal deficits - because student enrollment is declining as a result of local charter growth. Public school districts in Dayton, D.C., Newark, Indianapolis, Philadelphia, and Los Angeles have all faced the similar challenges that accompany the movement of huge numbers of students to charter schools - in some cases, over a third of the district’s student population (and budget). With a pro-charter administration entering the White House next month, it’s unlikely that this challenge is going away, which means districts will need to use creative solutions to compete and collaborate with charter schools to optimize resources for all public school students in the area.

What does this mean for school districts?

Districts facing declining enrollment due to charter expansion should consider innovative examples for competing and collaborating with charter schools, such as DC and Indianapolis Public Schools.

DC Public Schools hired political campaign experts to train school leaders in door-to-door canvassing, among other strategies to competitively market the school system. Indianapolis Public Schools is partnering with charters to provide underused buildings, transportation, and meal support in return for including students’ test scores in district averages and receiving state tuition support for the students.

About the Author

Image of Jess Gartner Jess Gartner is the founder and CEO of Allovue, where edtech meets fintech - edfintech! Allovue was founded by educators, for educators and combines the power of financial technology with education data, giving administrators the power to connect spending to student achievement. Jess has been featured as one of Forbes Magazine’s 30 Under 30 in Education (2015, 2016 All-Star), The Baltimore Sun’s Women to Watch (2013), and Baltimore Magazine’s 40 Under 40 (2013). In 2014, she was recognized as the Maryland Smart CEO Innovator of the Year in the Emerging Business category. Before founding Allovue, Jess studied education policy at the University of Pennsylvania and taught in schools around the world, including Thailand, South Africa, Philadelphia, and Baltimore. As a Teach for America corps member, she taught middle school humanities in Baltimore City and received her M.A. in teaching from Johns Hopkins University.