It takes a village to raise a child, and it takes money to educate one. According to the U.S. Department of Education's "Revenues and Expenditures for Public Elementary and Secondary School Districts: Fiscal Year 2008" released in August, regular school districts had median total revenues of $11,259 per pupil and median current expenditures of $9,509 per pupil.

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The federal government provided approximately $47.6 billion to local education agencies for public elementary and secondary education, and each district received monetary support from both state and local agencies as well. New York City School District, for example, which has the largest student body (989,941 for the reporting period), received $19,885,693,000 total from federal ($1,785,145,000), state ($9,335,189,000) and local ($8,765,359) sources. The current expenditure for each pupil in the New York City School District during fiscal year 2008 was $17,923.

Obviously that adds up when multiplied by the 989,941 students in this particular district – to more than $17 billion dollars. While each school district faces unique challenges, all struggle with budgeting and finding the money that is necessary to providing high-quality education and a positive work environment for the dedicated teachers and staff. In order to accommodate the financial requirements, some school systems are taking a creative approach to budgeting. (Learn about the costs associated with post-secondary education in the Most Expensive Places To Go To School.)

Back-to-School Lists
We are used to seeing the usual suspects on the back to school supply list - crayons, scissors or even calculators - but what may surprise many parents this year are the janitorial supplies that students must bring in due to belt-tightening in the school budgets. Many schools now require students to bring in disinfecting wipes, garbage bags, facial tissue, toilet paper, paper towels, hand sanitizer and hand soap to alleviate some of the cost associated with these cleaning supplies.

And it's not just limited to the janitor's closet. Students are also bringing in copy paper, construction paper, plastic bags and other arts and crafts items typically provided by the school.

Missed School? That'll Cost You
One school system in California got creative by deciding to charge parents $36.13 - the amount the district loses for attendance-based state school funding - each day that their child misses school due to an elective absence (days missed for reasons beside illness or injury). While the school does not actually have the authority to impose such a fine, the district received roughly $2,000 within the first two weeks of making the announcement.

Another California school district requests donations from parents when children miss school for absences such as family vacations. During the 2008-2009 school year, this district received $20,217 in donations. The money goes into the district's general fund. Because these elective absence penalties or donations are working, this may become a more widespread tool for schools to increase revenues.

Lotteries
Education lotteries provide varying levels of financial support to school systems in all but a handful of states. The New York Lottery, for example, provides over 12% of total state funding for K-12 education in New York State - a total of $39.3 billion since its inception in 1967.

These education lotteries, however, are not without controversy. Because people who live at or below the poverty level tend to spend more on lotteries, the education lotteries have taken a hit for being a poor man's tax. In addition, even though each state's lottery brings in significant dollars, typically less than a third of the money ends up in the school district's coffers. While some people balk at this, others see it as money that would not have otherwise been available to schools. (For more, check out 6 Hidden Government Revenue Streams.)

Fundraisers
It's all but impossible to escape school fundraisers, especially now that local PTAs and PTOs (Parent Teacher Association/Parent Teacher Organization) are expected to provide more and more money to help schools with the purchase of much needed supplies and equipment. Fundraisers range from the usual candy and snack sales, to the more creative: pay $2 and you can throw a pie at your kid's principal.

Fundraising is challenging since the same people are being asked time and time again to donate money or purchase something they really do not need, and as a result the fundraisers are getting creative to offer a "new" product.

DonorsChoose
In 2000, teachers in a Bronx high school took note that people would like to help distressed public schools, but were frustrated that they would have no control over how their donations were spent. DonorsChoose was created to allow would-be donors to choose exactly the project they wish to fund. Teachers can post classroom project requests, including a breakdown of the costs of the project, and donors select the project and the amount of money they want to give to the cause. Projects are listed by location, subject, popularity and urgency at http://www.donorschoose.org/.

The Bottom Line
In a perfect world, money would not be a factor in educating our children. The reality, however, is that most public schools, if not all, scramble in one way or another to find the money they need to provide high-quality education. Recently, nine states and the District of Columbia secured federal government grants through the Race to the Top (RTTT) program, a competitive grant fund that rewards states that are actively implementing comprehensive education reform.

With budget cuts and teacher layoffs, schools are looking to alternative means of saving money and generating revenue. Whether by requiring children to bring in their own soap and paper towels, or penalizing parents whose children miss class, schools are responding by getting creative. (For more, see Is Free Education Really Free?)

Catch up on your financial news; read Water Cooler Finance: The Ups And Downs Of A Double-Dip Recession.

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