An anti-racist funding approach to at-risk schools? PLUS: The fiscal cliff and inflation.
Happy Finance Friday! This week’s issue looks at how flexible funding empowers those who need it most, the “fiscal cliff” of federal funding and whether we should be worried, and what inflation might do to the municipal bond market.
Is flexible funding the answer to poverty?
Washington, D.C. wants to try something new with its schools budget next year. Campuses with the highest concentrations of poverty would receive additional local funding, on top of the $2.2 billion local education budget that the mayor has proposed, the Washington Post reported this week. The additional funds would total $41.6 million over four years across nearly 170 traditional public and charter schools.
The money would go directly to school principals and is completely flexible. The idea is that school administrators are more in tune than the system’s central office to what their individual needs are when it comes to spending on staff and services that could improve student outcomes. The system does already include more per-student funding for high risk students, but an independent budget analysis in 2016 found that most of that additional money was being spent on routine costs. In many cases, that’s because schools with high concentrations of at-risk students are often under-enrolled and smaller schools are more expensive to operate.
Council member Christina Henderson told the Post the at-risk funding pool has always been “contentious” and hailed the way the council’s funding proposal was crafted.
“It can be a game changer,” she said.
The big picture: If you’re in local government, this argument for more funding flexibility for on-the-ground officials probably sounds very familiar: It’s exactly what localities argued for and got with the $350 billion in fiscal recovery funding from the American Rescue Plan Act. The main idea is that removing barriers to funding will empower folks to spend it on the unique needs of their communities where it can do the most good.
The pandemic aid programs have also shown us how that approach can work with individuals. There’s a pervasive idea, many would say a racist one, that people requesting public assistance should have to jump through a lot of hoops to get the money because otherwise they might abuse the program. There’s an inherent mistrust in that approach and an underlying assumption that someone needing public assistance must have done something wrong to get there.
What programs like stimulus checks and universal basic income pilots showed us is that removing barriers to accessing funds helped people pay for necessities. And circumstances can change what those necessities are. One month it might be rent, the next month it could be a gently used suit and transportation to get to a job interview. In other words, like D.C.’s approach is for school principals, flexible funding for residents in need entrusts them with the power to make their own choices to improve outcomes.
Dig in:
Lessons from a guaranteed income pilot (The Urban Institute)
How Americans Spent Their Stimulus Checks (Peter G. Peterson Foundation)
Stimulus Check Spending by Race & Ethnicity (Dallas Federal Reserve)
Worrying about a fiscal cliff
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