“The whole point of getting more resources to schools that have students with greater challenges and allocating dollars instead of staff is to empower school leaders to organize resources in new ways that better meet student needs.” 

Karen Hawley Miles
President and Executive Director of Education Resource Strategies

Student-based budgeting can certainly be implemented solely as a funding mechanism, but Education Resource Strategies and others strongly advocate for making it one element of a plan to increase the autonomy of school leaders.

It is usually difficult for schools to innovate and adapt quickly in traditional funding systems because district-wide structures impede resource re-allocation. If student-based budgeting is done properly, it can grant principals greater flexibility so that they can leverage their school-level resources in ways that better meet student needs.

Reason RankingIn comparing several districts that have implemented student-based budgeting, the Reason Foundation noted significant performance differences between Houston and Baltimore. The Foundation posited that this may be because Houston (which performed extremely well on their assessment criteria) gave its principals a high level of budget autonomy. Houston gave its principals discretion over 43% of the district’s budget, while Baltimore only allocated 29% of funds directly to schools. The Foundation has stated that there is a relationship between higher budget autonomy and better district performance, one that merits further study.

Indeed, allowing school leaders to have greater autonomy and control over their budgets increases flexibility and the ability to innovate. After all, different schools face different challenges and should be able to set different goals and align resources accordingly.

District staffing rules that require compliance may not necessarily jive with school-level needs. For instance, if the districts adds instructional coaches to all schools, not all principals will necessarily have strategies for what that new staff member will do. Instead, a principal who doesn’t need to focus as much on improving teacher quality might want to leverage those resources towards extending the school day.

In 2010, Matthew Hornbeck, principal of a Baltimore school explained, “I purchased a full-time registered nurse because
 we have a number of kids who have epilepsy and a kid with cerebral palsy and lots of kids with asthma. That costs $30,125, and so I can just put that in my budget… It’s very empowering to have that information at your fingertips where you can see it, you can change it, you can submit it, and you can defend it.”

However, districts that decide to implement student-based budgeting should beware of potential pitfalls. Giving this level of autonomy to principals requires them to shift their roles, becoming more like CEOs. In order for it to work well, principals need to receive a lot of professional development on how to manage their budgets and use resources strategically before the system is rolled out.

Considerations  Weights SBB


  • Annenberg Institute for School Reform (2010). Student-Based Budgeting. Read it here.
  • Calvo, N. (2011). Opportunities and Challenges of Student-Based Budgeting. Read it here.