money matters

Here’s how New York City divvies up school funding — and why critics say the system is flawed

Governor Cuomo delivers his executive budget address.

One of Gov. Andrew Cuomo’s priorities this year, he said recently, is to make sure that needy schools get their fair share of funding. 

“Right now we have no idea where the money is going,” Cuomo said earlier this month. “We have a formula. We direct it to the poorer districts. But what did Buffalo do with it? What does New York City do with it?”

If he really wants to know what New York City does with its school aid, he could start by looking at the city’s “Fair Student Funding” formula.

The city adopted the school-budget system in 2007 as a way to send more money to schools with the neediest students. It replaced a system where funding was tied to teacher salaries, which had advantaged high-performing schools that ended up receiving more money because they attracted more experienced teachers with higher salaries.

But a decade later, the funding formula has not lived up to its promise. Most schools have never received the full amount the formula says they’re owed, while some actually get more than their fair share. And some principals say the formula has had the effect of making veteran teachers hard to afford.

One example: At the Metropolitan Expeditionary Learning School in Queens, a number of veteran staff members recently qualified for longevity-based raises that added roughly $340,000 to the school’s expenses. Because the formula does not give schools more money when teacher salaries rise, the co-principals had to start charging families for after-school programs and cut a planned teaching position to make ends meet.

“Eventually if all of our teachers keep staying with us,” said co-principal Damon McCord, “we won’t have any money.”  

Now, as Cuomo shines a light on school-funding equity, here’s how the process works (or not) in New York City.

How does New York City divvy up school funding?

The funding formula that New York City adopted in 2007 sets school budgets based on the grades they serve, their type (for instance, whether they are vocational or selective), and their student populations.

Schools receive extra money for students who are poor, struggling academically, have a disability, or are learning English. The idea is that needier students require extra support — and their schools need additional resources — if they’re to catch up with their better-off peers.

The formula also rewards certain selective schools, under the premise that high-achieving students also need extra attention to reach their full potential.

New York City is one of about 30 districts across the country to use this type of weighted funding system, according to the Baltimore Sun. About $6 billion of the New York City education department’s $30.8 billion budget flows through the formula, which is designed to cover schools’ basic expenses — most importantly, teacher salaries.

In addition to allocating more money to educate the neediest schools, the formula was also designed to give principals more power. Under this system, principals can decide whether to devote more of their budgets to seasoned (and costly) teachers, or to hire more junior teachers and spend the savings on an after-school program, for example.

The formula was also meant to impose some order on what was an opaque, freewheeling budget process. In the past, principals haggled with their superintendents for more money, favoring those who could best work the system, according to Eric Nadelstern, a former principal under the old system who was an education department official when the formula was adopted.

“You had massive inequities,” said Nadelstern, now a professor at Teachers College.The difference could amount to thousands of dollars per student, particularly for schools in middle-class neighborhoods and schools in poor neighborhoods.”

What’s wrong the city’s budgeting system?

The Fair Student Funding formula has never quite lived up to its ambitions.

When it was first adopted, city officials wanted to avoid taking money from wealthy schools, so instead they promised to raise poorer schools’ budgets. However, around the same time, the Great Recession hit, causing New York State to roll back planned increases in school aid to districts.

As a result, the formula has never been fully funded — and some poorer schools have never quite caught up to wealthier ones. Last year, only 23 percent of city schools received funding at or above the level to which the formula says they’re entitled, according to numbers provided by the city’s Independent Budget Office.

That creates situations like the one inside a school building in Lower Manhattan shared by New Design High School, which serves a very high-needs student population but does not see its full allocation, and the High School for Dual Language and Asian Studies, which enrolls a less needy population but gets more than its fair share.

The dual language school where about 3 percent of students have a disability and 85 percent are poor  received 112 percent of what the Fair Student Funding formula said it was owed last year. By contrast, New Design where nearly 28 percent of students have a disability and 100 percent are poor got just 92 percent of its formula money.

“This whole system is just holding an old, antiquated, unfair system into place,” said Scott Conti, New Design’s principal.

Critics have also questioned the part of the formula that gives extra money to selective schools that enroll higher-achieving students — and which tend to enroll relatively small shares of black and Hispanic students. More than a dozen elite high schools get about $1,000 extra per student through the formula, which has added up to more than $100 million since 2012, according to WNYC.

Others have suggested that the city should spend less on district-wide initiatives, and instead give the money directly to schools to spend. Mayor Bill de Blasio’s “Equity and Excellence” agenda devotes millions of dollars to a slew of efforts, including more computer-science classes, advanced courses, and college counseling. Some principals say they would rather the city pour that money into their budgets.

“My preference would be for them to cancel all those programs and give it all to the Fair Student Funding formula,” said a Bronx principal who asked to remain anonymous.

City officials say they are working to increase funding for the formula, and added that Equity and Excellence and other initiatives directly support schools. But they also said the city needs help from the state in order to fully fund the formula.

“By raising the Fair Student Funding floor citywide and making targeted investments through our Equity and Excellence for All agenda, this administration is investing more than ever in all our schools,” said education department spokesman Douglas Cohen in a statement. “To fully support Fair Student Funding, we need the state to meet its obligation to provide Campaign for Fiscal Equity funding.”  

Hello Again

Debora Scheffel chosen by acclamation to fill State Board of Ed vacancy

State Board of Education member Debora Scheffel at a campaign event in 2016. (Photo by Nic Garcia/Chalkbeat)

A Republican vacancy committee unanimously selected Debora Scheffel to fill the opening left by Pam Mazanec on the State Board of Education.

Mazanec, a staunch defender of parental rights and school choice who represented the 4th Congressional District, resigned at the end of January to focus on her other obligations. Scheffel previously represented the 6th Congressional District on the board but lost that seat in 2016 to Democrat Rebecca McClellan.

McClellan’s narrow victory gave control of the board to Democrats for the first time in 46 years. Scheffel, who serves as dean of education at Colorado Christian University, moved to Douglas County, and ran unsuccessfully for school board there in 2017.

Scheffel’s selection does not change the balance of power on the state board because she replaces another Republican. Scheffel faced no opposition at the vacancy committee meeting, which took place Saturday in Limon.

Scheffel has said she wants to continue Mazanec’s work on behalf of rural schools and in support of parent and student choice, as well as work to protect student data privacy, a cause she previously championed on the board.

The district takes in all of the eastern Plains, as well as the cities of Longmont, Greeley, and Castle Rock.

Future of Schools

Indianapolis struggles to balance how much money schools need with what people will pay

PHOTO: Dylan Peers McCoy
Lewis Ferebee

Without a massive influx of cash from taxpayers, Indianapolis’ largest school district could be in dire financial straits. But the fate of the referendums asking voters for more money is in limbo.

Even as the Indianapolis Public Schools board revealed plans to reduce how much money it is seeking from voters, the administration portrayed the district’s financial future as precarious. During a board discussion Thursday, officials underscored how critical it would be for the tax increase to pass. It’s unclear, however, whether the district will get the extra cash it needs to avoid making painful cuts.

Critics have suggested the request — $936 million over eight years — is too high and that the district has not offered enough detail on how the money raised would be spent. With only tepid support for the tax plan, district leaders appear poised to reduce the amount they are seeking. That move could win over new allies, but it could also undercut their efforts to gain support.

Next year, the administration is expecting spending could outpace income by more than $45 million. The plan for filling that gap hinges on raising more than $46 million from a referendum that will go before voters in May.

Without that extra money, Superintendent Lewis Ferebee said, the district would have to burn through its savings or make vast cuts that could include freezing teacher pay, cutting school budgets, and reducing transportation.

The district would need to begin making cuts immediately, said board member Kelly Bentley. “It’s just going to get worse the next year, and the next year,” she added.

The district’s future will look brighter if leaders are able to win public support for more funding, although it’s no longer clear how much money they will ask for. The original plan, which was approved by the board in December, includes two referendums to raise property taxes. One would ask voters to give the district as much as $92 million more per year for eight years for operating expenses such as teacher pay. Another measure, which the district is not expected to change, would pay for $200 million in improvements to buildings.

Ferebee said the amount he originally proposed was based on what the district needs rather than what would be politically feasible. In the face of community feedback, however, the district is crafting a plan that would have a lower price tag. Next, the district will need to explain what services will be cut to keep down costs, he said.

“I anticipate people will want to know, ‘what are the tradeoffs?’ ” Ferebee said. “We owe it to the community to provide that explanation, and we will.”

Indiana districts have pursued more than 160 property tax referendums since 2008, when state lawmakers created the current school funding system. About 60 percent of those referendums have been successful, according to data from Indiana University’s Center for Evaluation and Education Policy.

Stephen Hiller, who has been studying referendums with the center for nearly a decade, said that it’s likely that many districts have had to reconcile how much money they would ideally want with how much taxpayers might be willing to pay. But that conversation likely happens before a referendum is announced and approved by the board.

“I think IPS has it a little more difficult here that it’s happening in the open after they’ve approved it in a very public way,” he added.

School board president Michael O’Connor said that the district’s willingness to change the plan is a sign that local government works.

“We live in the community within which we serve, and all of us have heard pretty plainly and clearly, ‘we think that number might be too big,’ ” he said. “We are being responsive to our constituents.”

Reducing the referendum could be enough to win over many supporters. Several groups that have supported the current administration in the past have not yet taken a stand.

Tony Mason of the Indianapolis Urban League said in a statement that the district needs more money to pay high-quality teachers and meet the needs of its diverse students. But he raised concerns about the potential impact of the tax increase on residents with fixed- or low-incomes.

“IPS will still need to continue in its efforts to make the case for the substantial amount it is requesting,” Mason said. “The IUL is an avid supporter of education, particularly for urban schools that struggle with unique challenges.”

Chelsea Koehring, who taught in the district and now has two children at the Butler Lab School, shares the view that the district needs more money. But leaders have not offered enough details about how the money would be spent, she said, and changing the request raises red flags.

“People, you should’ve had this together before you asked,” she said. “Lowering it at this point — I don’t know that that’s going to instill confidence in anyone that they have any clue what they are doing.”

Correction: February 17, 2018: This story has been corrected to reflect that Indiana districts have pursued more than 160 property tax referendums since 2008. Some districts have held multiple referendums.