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Student-funding proposal faces tough road

A proposal by the Commission on Privatization and Efficiency would radically alter the way school budgets are determined, but may face insurmountable hurdles if it surfaces in the Legislature.

COPE’s report, which included 16 proposals aimed at saving the state money through privatization and other efficiency measures, recommended that Arizona switch to a “student-based budgeting”

system in which the per-pupil funding that schools receive from the state would bypass school districts and instead go directly to the schools. Funding would follow the students to the public school of their choice.

Proponents such as COPE Chairman Mark Brnovich, a former fellow at the Goldwater Institute, said student-based budgeting would give individual principals the discretion to set their own budgets based on their schools’ needs, rather than have a school boards and districts make those decisions for them.

“It’s something that seems a little radical, but at the end of the day, when people are concerned about education funding, you need to start asking those fundamental questions again — is money best spent at the local level?” said Brnovich, who is also the director of the Arizona Department of Gaming. “At the district level, is that the best place for money to be distributed? Is that the most transparent and equitable way of funding schools?”

The report said student-based budgeting would make school finance simpler and more equitable, and would save money by reducing central-office costs and increasing the amount of education funding that goes directly to the classroom.

Critics, however, say the proposal would have the opposite effect. Sen. Rich Crandall, who chairs the Senate Education Committee, said it would force every school in a district to take on responsibilities that are normally handled by districts, essentially turning each school into a “mini-district” with new personnel costs.

Crandall, a former president of the Mesa School Board, said the 82 schools in his district would have to each hire someone to handle their finances, as opposed to the one or two people the district employs for all schools’ finances.

“All of a sudden we have a privatization recommendation that comes out that says instead of having one finance person you have 82,” said Crandall, R-Mesa. “If it doesn’t work in the private sector, what makes you think it would work in the public sector?”

Rep. Doris Goodale, who chairs the House Education Committee, raised similar concerns. The Kingman Republican said few principals have the kind of knowledge and experience in finance to take on the kind of budgeting responsibilities that COPE would require. She said she also worried that principals lack the accountability to voters that school boards and superintendents have.

“I think this would create a real hardship on schools to find principals who know budgeting and know the process,” she said. “If the principal mismanaged their school financially, the responsibility most generally would fall back on the superintendent or the board.”

Crandall and Goodale’s opposition will likely be enough to nix any student-based budgeting proposal that emerges in the Legislature next year. As the chairs of their respective education committees, the two lawmakers would have the power to shelve any such bill that comes before them.

And the Legislature appears to be heading in the opposite direction of COPE’s proposal. While COPE aims for decentralization in the school system, a committee formed to draw up proposals for school district consolidation and unification held its first meeting on July 27.

The committee wants to pick up where a failed 2008 campaign — which gained some successes at the polls but lost a lawsuit that rolled them back — left off. The committee includes a number of school district officials who opposed the 2008 effort.

Members of the panel want to craft proposals that would eliminate some of the 227 school districts in Arizona, some of which have only two dozen students.

The co-chairs of the committee are Crandall and Goodale. And at the inaugural meeting, Crandall deviated from the script to slap down the COPE proposal. After imploring the committee to keep its debate within the scope of its mission, Crandall paused for a moment to “give (the committee) an example of a non-scope item” by lambasting the student-based budgeting proposal.

“That is not the scope of this committee. I would love to make it the scope of this committee, but it’s not,” Crandall said.

School district officials on the committee, who have historically opposed unification and consolidation efforts, didn’t view the student-based budgeting plan much more favorably than Crandall and Goodale did.

Committee member Toni Badone, superintendent of the Yuma Union High School District, said the proposal has its upsides.

But she focused on the downsides, which she said included burdening principals with non-academic duties and eliminating certainty in budgeting.

“For me to ask my principals to know the ins and outs of that … seems like an added responsibility that would cost us money in the long run rather than save us money,” Badone said. “They would have to hire someone (for budgeting). I’m not for it.”

No lawmakers have yet stepped forward to champion COPE’s proposal, which the commission said has found success in other states, out-of-state school districts and foreign countries.

Crandall disputes this, saying it has also had its failures.

Sen. Steve Yarbrough, the owner of a tuition tax credit organization, said studentbased budgeting would be a “healthy step” in pushing important budgeting decisions to the school level. But Yarbrough, R-Chandler, also said the unification proposals have merit, and detractors of the COPE plan may well be able to talk him out of the studentbased budgeting plan.

“I would be open to considering options of following the recommendations of that (COPE) report and trying to drive these decisions down to the school level. Maybe I can be persuaded,” he said.

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