Experiments in Deregulating School Finance

Since the 1980s, the governor and legislature have tried to balance statewide educational priorities against the desire for local flexibility, frequently expanding targeted categorical aid programs. Some argue that this approach to school finance undermines local educators’ efforts to devise coherent instructional initiatives and respond to accountability pressures. In the midst of the ongoing budget crisis, the legislature suspended requirements attached to approximately 40 “Tier 3” categorical aid programs. This represents a massive experiment in deregulating school finance, with districts potentially making new choices about how to spend $4.5 billion in 2009-2010 alone.

The RAND Corporation, in collaboration with the University of California, Berkeley and San Diego State University, is conducting a 2-year study that explores district and school leader responses to the Tier 3 initiative and federal stimulus dollars.

How are districts making use of this fiscal flexibility? What forces are shaping resource allocation decisions?

The study team discussed qualitative data collected at 10 districts during the spring of 2010. Initial findings suggest that after one year, the Tier 3 flexibility is playing a critical role in helping districts to backfill budget gaps as the state crisis continues. At the same time, there is evidence that some district leaders are actively reworking existing spending patterns to better align with local educational needs and make strategic spending choices.

Speakers include:

• Bruce Fuller, Professor of Education and Public Policy, University of California, Berkeley
• Jennifer Imazeki, Professor of Economics, San Diego State University
• Brian M. Stecher, Acting Director of Education Research, RAND Corporation
• Thomas Timar, Professor of Education and Director of the Center for Applied Policy in Education, University of California, Davis

Moderated by David N. Plank, Executive Director, PACE.