Effective education is essential for the prosperity of society and the whole country. It is a complex system consisting of many levels and components in which significant financial resources and human capital are involved. One of the critical parameters for the successful functioning of an educational institution is budgeting. Any local government or agency, including public schools, uses its budget to describe its program plans. Financial resources for education are limited. Therefore, the effective formation and distribution of budgets are of particular importance.
The Most Common Types of Budgets Used in Education in New Jersey
School budgets are public funds established by the state government. The funds are then distributed to various areas of the school/district and documented. The budgeting process enables different levels of government to make better financial and program decisions, improve operations, and strengthen relationships with citizens and other stakeholders. There are a few types of budgets, such as line-item budgeting, function/object budgeting, zero-based budgeting, program-planning budgeting, and systems site-based (school-site) budgeting. All of them have their advantages and disadvantages, and each organization chooses the most suitable one for its unique needs. New Jersey predominantly uses function/object budgeting (State of New Jersey Department of Education). Zero-based budgeting can also be used in some regions. It requires that budget makers rely on last year’s budget as a basis for making next year’s budget (Ibrahim, 2019). The previous year’s budget summary is similar to the current one, so this method can also be applied.
Evidence That the Model is Used to Develop the Budget
Trenton district public schools as well use budgeting by function/object model. Evidence suggests that this model is used to develop district budgets is because, in the budget summary, spending organized around the core functions of the system (State of New Jersey Department of Education). It contains such areas as education, student support, operations, administration, and transportation. In addition, the functions are subdivided, such as primary education and secondary school activities. In addition, the item to be purchased is specified, such as general classroom supplies, textbooks, etc. are indicated in the budget summary. Human resources, salaries, and various benefits are also functions of the budget and are clearly indicated in the summary. They include fees for instructors, support staff, and support staff as well.
Community, state, and federal governments can all provide funds for public schools in New Jersey in this budgeting type. State and federal government funding is based on school performance, student need, school type, and program implementation. When awarding financing, the government may have particular expectations or limitations, such as money can only be used for programs or students. There are fewer restrictions on how the community and local funds may be used as long as it is used correctly and profitably. Community and local groups have a more considerable influence on school improvement because they better understand the school environment and what factors lead to excellent performance. Moreover, they can hedge government financings in crisis situations, such as a reduction in tax revenue during a recession that leads to a reduction in a school district’s budget and options such as increasing class size or reducing extra-curricular activities to balance the budget. (Jacobson et al., 2019) In these examples, the macro-level relationships between tax revenue, school budget, class size, and extra-curricular activities might be linear.
Such an example already happened a few years ago when Trenton Public Schools faced multiple years of fiscal turmoil. The district struggled to provide students with the resources required to meet the State’s Core Curriculum Content Standards (Farrie, 2018). The state failed to provide the state support required to support the district’s funding, eroding critical resources in district schools and depriving students of the possibility of a thorough and efficient education.
Principals took charge of the function/object budget development process and relied on existing structures, particularly school-level leadership teams and community budget meetings, to meet the district’s formal requirement to involve teachers, parents, and community members in budget development. Principals effectively control budget choices in this manner (Sinclair & Malen, 2021). Select teachers and school administrators may be asked to participate in the budget process on a limited and marginal basis. They supply other stakeholders with information on school programming but little information on how the school’s resources are being used.
The budgeting process is an extremely important part of the successful functioning of the education system. While the concept of budgets is basically common across education in the USA, the budget process in public schools has its own features and differences. Financial resources are limited, and constant innovation and restrictions related to everything from building codes to class size requirements make effective budgeting vital for schools. The school budget and its supporting process allow school districts and their leaders to explain the collection and use of public funding. In New Jersey, stable and time-tested models are used. They help control spending, save money, distribute scarce resources evenly and fairly, and plan and make informed decisions for leaders. However, there are other, newer, and more flexible models that could possibly improve the process a bit. For example, they provide an opportunity to prepare for emergencies and focus on long-term development and improvement of resources that will lead to improved educational outcomes.
Farrie, D. (2018). Trenton Public Schools: Budget Impacts of Underfunding and Rapid Charter Growth. Education Law Center.
Ibrahim, M. M. (2019). Designing zero-based budgeting for public organizations. Problems and Perspectives in Management, 17(2).
Jacobson, M. J., Levin, J. A., & Kapur, M. (2019). Education as a complex system: Conceptual and methodological implications. Educational Researcher, 48(2), 112-119.
Sinclair, K., & Malen, B. (2021). Student-based budgeting as a mechanism for promoting democratic decision making: testing the theory of action. Educational Policy, 35(5), 781-809.
State of New Jersey Department of Education. 2022-23 School District Budget Summaries/Salaries & Benefits. State of New Jersey Department of Education