The U.S. Department of Education has released a new study that explores how states fund their Career Technical Education (CTE) systems beyond the formulas prescribed in the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins).

The study, prepared by the National Center for Innovation in Career and Technical Education, focuses primarily on how state funding, which is often used to off-set the higher cost of technical instruction, is distributed to local secondary and postsecondary programs. The report used survey data collected by the National Association of State Directors of Career Technical Education Consortium (NASDCTEc) that asked State CTE Directors how categorical funds were distributed during academic year 2011-12, as well as the use and perception of performance-based funding for CTE.

In short, the survey found that state approaches to CTE funding varies in emphasis and complexity, and no single approach will meet the needs of every state. The study also called for more research to better understand what impact, if any, the each of the state funding approaches has on program and student outcomes.

Financing Secondary and Postsecondary CTE

State financing approaches broke down into three main categories: foundational funding only, funding for area CTE centers and categorical funding.

Foundational Funding Only – All states distribute basic state aid to finance secondary education programming using a variety of formulas. In this approach, local administrators decide how to distribute funds across instructional priorities, including CTE. Nine respondents indicated they rely exclusively on foundational funding. At community or technical colleges, 30 states reported distributing funds to postsecondary institutions through block grants and not distinguishing funding for CTE.

Funding for Area CTE Centers – Through this method, funds are dedicated to support programming at area CTE centers that deliver CTE services to part-time students. Centralizing CTE programs can be a cost-effective strategy. Seven states reported having separate state funding for these centers at the secondary level and sometimes use a categorical funding approach to distribute funds.

Categorical Funding – This approach dedicates funding to support career-related instructional services and typically targets state funding for the exclusive use of CTE programming. In fact, 37 states earmarked state funds for secondary CTE using one of the following formulas: student-based (21 states), cost-based (7 states) and/or unit-based (9 states). At the postsecondary level, seven states indicated providing categorical funding, while most opted to allocate funding through basic state aid.

Performance-based Funding

Just seven states use performance-based formulas to allocate secondary CTE funds by tying funding to performance measures such as placement of CTE students into postsecondary education or employment, attainment of industry-recognized credentials or CTE completion rates.

For federal Perkins dollars, two states (Texas and South Carolina) do this for secondary CTE. Five states (Arizona, Florida, Kansas, Missouri and West Virginia) indicated using this formula to allocate state CTE funds on the secondary level.

At the postsecondary level, four states (Arkansas, Georgia, Minnesota and North Dakota) reported using this approach with state funding, while none reported doing this with Perkins funds.

For the vast majority of states that do not use performance-based funding, the most common reason was a lack of understanding from state leaders. Almost half of states expressed an interest in adopting this approach to allocate a portion of their Perkins funds; however, training would be necessary if required by legislation.

Andrea Zimmermann, State Policy Associate