School-level budgeting and transparency are on the national radar and, thanks to HB2385, coming soon to an Arizona school near you!

The Groundwork

Over time, there has been a growing understanding that school budgets are less about properly populating Excel spreadsheets and more about how to get great outcomes for kids. When budgeting is reframed around a strategy for each individual school instead of the filing of state finance reports, then what the dollars are capable of becomes clearer.

Combined with the long-standing work of crusaders such as A for Arizona’s Lisa Graham Keeganand Reason Foundation’s Lisa Snell to sound the alarm that student funding wasn’t always making it to schools, the ground has slowly softened for the recent shifts in school finance expectations.

The last domino needed to make real transparency a reality fell recently and can be attributed to edfintech pioneers, including the team at Allovue, who developed the technology necessary to help translate policy on school-based budgeting and transparency into action.

Tackling School Finance in Arizona

With the groundwork laid, someone had to take the first brave step in Arizona to tackle our state’s messy school finance reporting system. It eventually came to pass that conversations pushed by Governor Doug Ducey and his Classrooms First Council led to agreement that local and state systems had to evolve to track where dollars end up.

Ultimately, Governor Ducey signed HB2385, sponsored by House Education Chairman Paul Boyer, in the most recent legislative session. This bill moves Arizona away from long, useless reports on aggregate spending and toward a better understanding of how dollars are spent at the neighborhood school. By considering students, teachers, and principals, this shift fundamentally changes school finance.

For Students

Simply assigning a percentage of district or charter systems’ dollars every year for “reading,” “transportation,” or “technology” is an old way of doing things. Now we evaluate whether those expenditures had an impact in individual schools for their students. Breaking down enormous budgets and showing funding at the school level is necessary to drive conversations on the impact of resources on student learning.

For Teachers

Arizonans are wising up to the fact that teacher pay is affected by how much funding actually makes it to their school. Arizona’s new legislation can help stakeholders follow the money and answer other questions affecting teacher pay. * How much of per student funding is not spent on teachers? * How much of each student’s funding is paid out to teachers at the school across town? All of these answers matter, yet we have failed to seek or to publish clear answers to these questions at the school level, annually. HB2385 changes this.

For Principals

We believe school principals are more effective when they have a direct role in budgeting. HB2385 nudges the system toward empowering principals in the actual budget process while pushing the information about what they should be receiving in their budgets out in to the light of day. This year, Governor Ducey substantially increased the per student payment by $400 for schools successfully serving low-income students. The principals in those schools now have more resources and autonomy to spend dollars on initiatives for their students.

It’s important to note that a cohort of Arizona’s charters and districts volunteered to participate in a pilot to make school-level budgeting possible, transparent, and connected to outcomes. The leaders in the pilot districts want to leverage every dollar, usually at the school level, to its best effect and to put as much money toward teacher pay as possible. Part of the work in this pilot was to convert outdated budget habits and systems into transparent budgets that empower schools and their leaders. But they can’t do it alone.

What is HB2385?

HB2385 requires state agencies that collect, report, and audit school expenditures to collaborate with districts and charters on how to publicly share information meaningfully without increasing burdens on schools. The pilot schools will inform this state level exercise and will begin analyzing financial data inside their own organizations using cutting edge financial technology.

With time built in to prepare for this new era of transparency, HB2385 will eventually make it possible to see accurate, relevant school-level data. With this increased transparency, we will be able to reflect on how school funding is used and whether it’s being used to make a difference for students and teachers alike.