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In 2004, Hawaii’s legislature passed an ambitious law aimed at transforming the state’s single-district school system by implementing weighted student funding (WSF) for the 2006-07 school year. However, on the eve of its implementation, there is reason to worry that this reform will not be the victory that choice supporters and advocates for poor students might have hoped.

Act 51 (the Reinventing Education Act of 2004) mandated that at least 70 percent of Hawaii’s education dollars be distributed through a system of WSF, a system that at its core should have three fundamental principles:

1. funding should be allocated per pupil, and fully follow students to the school of their family’s choice;
2. funding should be weighted to reflect student need; and
3. principals should have the freedom to spend these dollars as they see fit.

Unfortunately, Hawaii’s model falls short on all three fronts, and reformers are losing hope that the Aloha State’s WSF system will eliminate school funding inequities and provide a path to fair funding of schools of choice (charter schools often receive less dollars under traditional funding formulas).

For funding to truly and fully follow students to schools of choice, it would of course have to include charter schools. But in Hawaii, it won’t, as Hawaii’s charter schools have opted not to participate in the new system. Why? In part because of distrust—Jim Shon, director of Hawaii’s Charter Schools Administrative Office, asks “Why should charter schools go leaping off the cliff into darkness here?” That distrust seems justified by charter schools’ claims that the state has withheld $1.7 million in federal education spending from them. But more fundamentally, charter schools may be leery that WSF leaves in place large inequities between charter and district school funding—importantly, facilities funds are not included, and the per-pupil weights appear to have been diminished by the state’s unwillingness to put more than 75 percent of the overall education budget into the WSF formula.

Hawaii’s system falls equally short on the second principle, to provide additional funding to students with the greatest needs. Although districts need not adopt any one system of weights under WSF, Hawaii’s weights seem woefully inadequate–they have allocated an additional 10 percent for students in poverty and 19 percent for English language learners. An independent report commissioned by the state’s board of education determined that these weights need to be significantly higher to promote any real gains in equity, and we agree that Hawaii has missed an opportunity to provide greater funding to those students most in danger of being left behind.

Perhaps these shortcomings could be forgiven if Hawaii had revolutionized the role of the principal, giving him or her the ability to develop a school, and its staff, as she sees fit. Many of the benefits of WSF rest on the authority of principals to decide how to spend their schools’ funds. If principals cannot tailor administration and instruction to students’ specific needs, the point of pupil-generated funding is lost. While the Hawaii plan does put more than 70 percent of funds into principals’ hands (more than some previous WSF districts have managed) school leaders are still shackled by needless restrictions. Catherine Payne, principal of Hawaii’s largest high school, told Stateline.org that she enjoys her newly granted budgetary control, but is restricted from actually cutting any teaching positions. Act 51, which purportedly aims to “[clarify] the authority and responsibility of principals,” makes grand but decidedly unclear overtures to this critical element of WSF.

And the problems in Hawaii don’t end there. To appease schools which have complained about shrinking budgets—especially small schools which previously received more per pupil because of their size—Hawaii’s legislature is considering “foundation grants,” which will compensate small schools for some of their losses. These grants would limit the overall funding allocated to the WSF system, perhaps hurting the system’s effectiveness. Though presented as a temporary measure, it has ruffled the feathers of WSF’s supporters, causing one member of the Committee on Weights—a body created to determine the weighted formula—to resign. Of course, there can be legitimate reasons to provide additional funding for small schools—particularly isolated schools which have no choice but to be small and thus, because of fixed costs for a building and a principal, require more per pupil. But these should be the exception, not the rule, and Hawaii must eventually face the reality that some of its small schools have been receiving greater per-pupil funding than they might otherwise deserve. We hope the foundation grants do not permanently forestall this day of reckoning.

Hawaii’s experience makes clear that WSF holds immense promise, but only if it is implemented in an unsullied form. It must treat schools of choice fairly, it must help eliminate the inequities facing the neediest students, and it must enable principals the flexibility to successfully serve their students. Instead, Hawaii has merely offered a pale imitation.

Eric Osberg is vice president and treasurer of the Fordham Foundation and a Public Affairs Fellow at the Hoover Institution.  Coby Loup is a graduate of Brown University and a summer intern with the Fordham Foundation.