Supporting Students in a Fiscal Crater

BudgetConsidering equity and program efficacy in the face of looming coronavirus-induced budget cuts.

This year’s coronavirus shutdowns hit during peak budgeting season, forcing schools and districts to triage current needs instead of planning for future ones. And while the term “new normal” has largely been applied to the short term—social distancing, school closures, virtual classrooms—the effects of coronavirus will undoubtedly have a lasting impact on school budgets and resource allocation.

School closures and shifts from classroom to online instruction are acute right now, and the financial climate induced by these shifts will likely have impacts that far outlive the current conditions. As schools finish their 2019-20 years and begin to potentially reopen their doors, they’ll likely require new expenses: additional cleaning, protective equipment, and direct health services for students and staff. And all while tax revenues crater.

The obvious revenue challenges posed by the crisis will cause dramatic shifts in forecasting functions, and many will be left scrambling to find a place to start. Yet to maintain forward movement on what’s most important, leaders must direct their finances strategically and make data-based decisions in the name of equity and efficacy.

Protect Equity in Times of Cuts

Former SDP Fellow Jason Becker began his career (and SDP fellowship) during the Great Recession, and sees lessons from that time that could play out again. As we learned from the period of economic stagnation, certain impacts will hit faster than others. For example, states with a greater reliance on the revenue from oil like New Mexico and Oklahoma are likely going to experience impacts hard and fast in the face of plummeting demand. The same is true for areas more reliant on sales and income taxes. Yet areas with a large dependence on property taxes will feel the effects more gradually—property taxes can and do lag in recessions, but not as quickly as sales and income tax.

And as different areas feel the effects of budget cuts at different rates, a dark lesson will likely resurface throughout the country. “There’s a real concern around resource equity,” noted Becker. “In a climate of cuts, we’ve seen districts and states back away from resources that are equity enhancing.” As demonstrated in communities like Central Falls, Rhode Island, low income and underserved communities feel the burden of economic downturns even worse, and structural inequalities plunge already vulnerable communities into increasingly vulnerable situations.

“We’re really looking at how districts can continue fighting back against structural inequality in an environment of cuts,” explained Becker. “We know it’s hard, but resource equity matters. And unfortunately, it’s less of a thing that people talk about when budgets are restricted.”

To help guide decisions that are both effective and equitable, Becker and his company Allovue emphasize the importance of distributing the decision-making process beyond central offices. Incorporating the voices of those closest to students—principals, teachers, counselors—is essential for determining what success looks like for students and what they need to achieve it. “Shared ownership of decisions is vital when money comes off the table,” said Becker. “Not only do you need the input of those on the front lines, but people throughout the community need to know the circumstances and context surrounding the tough decisions that ultimately are made. This will increase buy-in and agency during times of uncertainty.”

Reduce Budget Strategically

Ideally when making decisions about major programmatic investments, leaders should consider a number of things: how much is already invested in the program area, which other programs are already targeting that area, and the intended impact. Additionally, pre-existing budgets are often riddled with underperforming, redundant, or abandoned and forgotten programs. So in a time of cuts when leaders are forced to make brave and difficult decisions, discontinuation of programs becomes inevitable.

As leaders face resistance and turbulence when discontinuing programs, they are charged with not only making the right decisions but also in justifying those decisions to their constituents. This reality prompted the idea of cycle-based budgeting, envisioned by former SDP Fellows Bo Yan and Dena Dossett together with their colleagues in research and finance departments. In this system, programs and investments aren’t simply added to a budget indefinitely, but rather implemented with time frames (cycles) and expectations from the outset. Basically, leaders determine the goals they hope to achieve with the program and the time they’ll need to reach them. At the end of that cycle, leaders reconvene to determine whether the goals were met, or at least whether the intentions of the program are trending in the right direction.

“Cycle-based budgeting provides a structure for implementation that makes continuous improvement and discontinuation, if needed, easier in the future,” said Yan. Additionally, the system accounts for redundancies in programming, saturated areas of investment, and the target populations for each program. This further helps leaders keep an eye on equity and ensure fair and justified financial decisions.

While cycle-based budgeting isn’t exactly set up to deal with acute situations like COVID-19, it does provide leaders with an opportunity to shift their future budgeting in a way that encourages greater accountability and fidelity.

Determine ROI

Leaders often turn to descriptive data and gut feelings to get a sense of which programs are working and which aren’t. Yet programmatic ROI, while tricky to determine, can offer a more robust and nuanced view of program efficacy. Additionally, ROI can help with the student selection process by helping identify which student groups are the likeliest to benefit from the program.

SDP Fellow Abigail Todhunter-Reid’s work in Palm Beach County demonstrates one way to define ROI. She developed a cost-effectiveness ratio that determined cost per additional positive outcome of a program aimed at helping low-income minority students graduate and enroll in college. Essentially, she determined the cost per student that graduated and enrolled in college that was unlikely to do so without the program’s assistance. And while the dollar figure was revealing in itself, her ROI determination helped reveal an even more nuanced insight.

Because the program was never at risk of discontinuation, Todhunter-Reid’s work on ROI prompted district leaders to adjust their student selection process to obtain a greater ROI and help those more likely to benefit from the program. What she found is that the program was likely targeting many students who likely would have graduated and enrolled in college anyway, without the assistance of the program. This realization helped bolster program efficacy in a more robust way by selecting students less likely to succeed without intervention.

In the midst of great stakes for the most vulnerable among us, we’re charged with making good, equitable decisions with limited funding. From great disruption can come great opportunity, and we can meet the moment by thinking through the steps toward the future we hope to create.


Allovue has released the free CARTS tool for school districts to support smart decisions about resource allocation.

New SDP Finance Fellowship

This fall, SDP is launching the new Finance Fellowship to build the capacity of education agencies to strategically link financial data to student data so that they can spend wisely and effectively, even in times of great constraint. 

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