It is estimated that CTE costs may be between 20 and 40 percent higher than those for general academic instruction. In order to meet the higher cost of offering CTE, states appropriate considerable funds in addition to federal Perkins funds. The way states allocate funds to districts for secondary CTE varies widely depending on the approach and complexity of the funding system. There are four general ways states distribute funds to districts for CTE:
- Student-based formulas.
- Unit-based formulas.
- Cost-based formulas.
- Funding for CTE centers.
Under student-based funding formulas, the amount of state funding a school district receives is based on the number of students enrolled in CTE. At least 19 states use student-based formulas to distribute CTE funds. Student-based formulas generally work in three different ways:
- States distribute funding proportionally or based on enrollment determined by a full-time enrollment (FTE) or average daily membership calculation. For instance, Washington provides funding according to the following student-to-teacher ratio: 1 CTE teacher for every 23 FTEs.
- States add additional weights to their foundation formula to provide funds for all CTE students. In Alaska, the state assigns an extra funding factor of 1.015 for students participating in secondary school vocational and technical instruction.
- States add differential weights to their foundation formula to provide funds to CTE students based on program type. Kentucky organizes program funding in three categories: orientation and career exploration programs, technical skill programs and high-cost technical programs. Students receive different weights depending on the program category, with high-cost technical programs receiving the highest weight.
Unit-based funding distributes funds based on factors like the number of instructors or administrators employed by a local education agency or the equipment used to deliver instruction. At least seven states use unit-based funding to distribute funds. For example, in Mississippi, the per-student allocation under the Adequate Education Program accounts for various inputs, including instructional and administrative staffing, facility operations and maintenance, and other costs deemed necessary to deliver services. For CTE students, the state provides another one-half teacher unit per CTE program through the instructional component.
States may approach funding for career and technical education programs based on the cost of the programs. In other words, districts receive reimbursement from the state for the costs incurred in order to provide CTE programs. Our 50-State Comparison on Secondary CTE identifies eight states that use a cost-based mechanism to distribute funds for career and technical education programs.
For example, North Dakota’s state board of education may reimburse entities giving instruction in career and technical education using state and federal funds allocated for such programs. If the total amount of funds available for that purpose are insufficient to reimburse those entities at the rate established by the board, they may prorate the available funds.
Similarly, Rhode Island’s Department of Education may distribute state and federal funds to support career and technical education programs for specified costs incurred by districts. The department is required to prorate funds among eligible school districts if the total amount that districts are seeking reimbursement for exceeds the available funding. Additionally, there is a one-time grant available to cover initial costs for prospective career programs or one-time costs such as construction or equipment costs.
At least nine states fund CTE centers that exist separately from high schools. Districts use funds from the state aid allocations to support these CTE centers where secondary students can attend for CTE coursework. For example, Arkansas distributes funds to multidistrict CTE centers that service districts within a specified mile radius. Arkansas’ CTE centers receive a fixed per-student rate based on enrollment.
See the 50-State Comparison for a state-by-state examination of the different approaches states use to provide funding to districts for CTE programs. While there are many sources and mechanisms that states use to fund secondary CTE, there are some commonalities in how they distribute the funds that allow districts to offer CTE programs.