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ERIC Number: EJ1027053
Record Type: Journal
Publication Date: 2013
Pages: 9
Abstractor: ERIC
Reference Count: N/A
ISSN: ISSN-1539-9664
Funding Phantom Students
Roza, Marguerite; Fullerton, Jon
Education Next, v13 n3 p8-16 Sum 2013
Many state education leaders are taking a fresh look at school finance in hopes of containing costs. Some are reworking transportation formulas, or zeroing in on special education eligibility, or merging districts. Others are investing more in digital learning, charter innovations, and information systems. But state leaders too often overlook a common practice that inhibits both efficiency and productivity, namely, funding students who do not actually attend school in funded districts, herein called "phantom students." Policies that fund phantom students take several forms: (1) protections against declining enrollment; (2) hold-harmless provisions for districts competing with charters; (3) small district subsidies; and (4) minimum categorical allocations. In each case, affected districts receive funds in excess of what they would receive if only the students on their rolls were funded. An obvious downside is that these policies cause less funding to be available for all other districts. But such allocations also insulate district leaders from having to make tough (and often productivity-enhancing) changes in the way they serve the students they have. Policies intended to "protect" districts weaken the incentives that should drive change and adaptation as enrollments fluctuate. This article discusses each of the above mentioned forms of funding phantom students and outlines three primary arguments against this funding. It concludes with four ways states can end phantom funding: (1) Encourage districts to structure allocations in per-student terms; (2) Restructure true fixed costs: unfunded liabilities; (3) Limit state restrictions on how certain funds can be used; and (4) Limit districts' short-term ability to make long-term commitments.
Hoover Institution. Stanford University, Stanford, CA 94305-6010. Tel: 800-935-2882; Fax: 650-723-8626; e-mail:; Web site:
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Elementary Secondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A