Regardless of whether people work or interact with public education directly, having a basic idea of how  funding works is good since all citizens pay for public education through their tax dollars in one form or another. In many ways, public education is a collective investment in our society and its future, as accessible education helps cultivate a literate, productive citizenry. Understanding these funding mechanisms is doubly important for people who work in public schools. However, they are not always easy to follow.

Public schools are a massive network of operations, so it’s not surprising that their funding processes are complicated. Resource allocation varies not just among states but among districts as well, which is one of the primary reasons why school leaders need to have in-depth knowledge of different funding systems that factor into their schools’ budgets. When leaders have a firm grasp on how money flows into their districts, they can make difficult decisions and be informed advocates.

Eastern Michigan University’s Master of Arts (M.A.) in Educational Leadership online program prepares education professionals to lead school communities with the appropriate economics and funding knowledge.

Making Sense of Systems

Some funding principles are relatively standard thanks to their origins at the federal level. According to Public School Review, approximately 8% of school funding comes from the federal level. These grants — Title, Individuals with Disabilities Education Act (IDEA) and more — are allocated to districts based mainly on student needs. Many of these funds are earmarked for specific purposes.

State and local funding accounts for the remaining portion of the budget. State dollar amounts come from a formula that helps the state determine how much to allocate for each district, explains Allovue. Funding formulas consider factors such as “district enrollment, student characteristics, community wealth,” and other elements. Most state funds do not have the same level of restrictions as federal funds.

After all these revenue sources are disbursed, districts have a great deal of autonomy over how their funds are allocated among all the schools they oversee. Schools in the United States have historically been run primarily at the local level, since the Constitution requires that states maintain primary control over their education systems.

This is where school leaders and their knowledge of funding sources and stipulations play a significant role. As Allovue notes, “creating and modifying funding and/or staffing allocation methods can be especially challenging.” That’s especially true in larger districts, where huge variances exist in students and their needs. District and other school leaders must decide on a distribution method or formula that is ethical, equitable and yields the best outcome for their community. Leaders with a strong grasp of their school’s funding needs are more empowered when advocating for those needs in difficult conversations.

The Benefits of an Advanced Degree

The M.A. in Educational Leadership from Eastern Michigan University prepares graduates for the challenges of being leaders in today’s educational atmosphere. The fully online program helps students develop robust management skills and research expertise in order to improve operations. In addition, program graduates will learn how to engage students’ families and school communities in meaningful ways that create mutual benefits and extend students’ academic success beyond the school.

The program’s required coursework closely examines the economics of schools’ operations — including fiscal and legal theories of support, tax structures, state and federal aid strategies — and how to approach school budgets. The course titled Economics of Public Education equips students with “basic economic, fiscal and legal theories of support for education, tax structures, state aid formulas, federal aid and school budgets.”

With thorough knowledge on public school funding processes, school leaders of all kinds will be better able to lead communities and allocate resources appropriately.

Learn more about Eastern Michigan University’s online M.A. in Educational Leadership program.