money matters

When diversity backfires: How schools can lose funding as they try to integrate

PHOTO: Christina Veiga
As M.S. 442 attracts more high-income families, its federal Title I funding has come under threat.

For years, M.S. 442 Carroll Gardens School for Innovation served mostly low-income students. But with more well-off families picking the Brooklyn school than ever before, it is at a tipping point — and so is its budget.

Schools in Brooklyn must enroll at least 60 percent poor students to receive Title I money, a pot of federal funding that supports schools with many needy families. The recent influx of middle-class students has pushed M.S. 442 right below that threshold, to just under 59 percent last school year, likely leaving it with a budget hole of almost $120,000.

“We’ll have to dig deep,” said Principal Noreen Mills. “My main concern and goal is for my students to have all the opportunities we have now, when we do have Title I funding.”

Across New York City, parents, educators and students have led a grassroots effort to better integrate schools, which are among the most segregated in the country. But for all its academic and social benefits, greater socioeconomic diversity can create new problems for school budgets.

When high-poverty schools attract just enough middle-class families to fall below the Title I cut off, the federal funding spigot abruptly shuts off. While the city education department extends the funding for one year after schools cease to qualify, principals are soon left scrambling to plug the budget hole — even as they continue to serve a large share of low-income students who may need extra support.

“There’s no nuance in it,” said Jody Drezner Alperin, a parent at M.S. 442. “You either are, or aren’t,” a Title I school.

PHOTO: Christina Veiga
Students start the school day at M.S. 442 in Brooklyn.

Those newly diverse schools may not yet have enough higher-income families who are able to raise or donate funds equivalent to the lost Title I money. But even if that’s possible, some principals hesitate to rely too heavily on parents’ checkbooks. They worry that doing so would devalue the contributions of families who can’t afford to donate, while giving affluent parents greater sway over school decision-making and programming.

“It throws it over to the middle class to be the financial saviors of the school,” said Julie Zuckerman, the principal of Castle Bridge School, a mixed-income school in Washington Heights that doesn’t yet qualify for Title I. “We want to have the resources to do right by all the kids.”

At M.S. 442, more than 74 percent of students qualified for free lunch just five years ago, the measure the city uses to decide whether a school will get Title I money. That was before the school underwent a makeover and moved to a new building, which drew in many higher-income families. Today, about 48 percent of students qualify for free lunch.

But the influx of middle-class parents has not meant an infusion of cash. The school still relies on its roughly $120,000 in Title I funding per year to pay for student clubs, sports teams, teacher training, and mental-health services for students and families. (Because the school dipped below the Title I cutoff last year, it is currently receiving its one-year funding extension.)

The parent organization still gets $1 donations and holds bake sales. On its website, it asks families to consider pledging $4.42 a month — far short of the $200 yearly suggested donation at a nearby middle school with a less needy population.

PHOTO: Christina Veiga
Noreen Mills is the principal of M.S. 442 Carroll Garden School for Innovation, which has fallen just below the threshold to qualify for federal Title I funding.

Rather than selling tickets to events like movie nights as a way to raise money, the M.S. 442 parent organization invites families to come for free, Drezner Alperin said. It sees the gatherings as opportunities to build community — but it also knows that charging admission would place a burden on some families.

“Our fundraising ability is reflective of the community of our school,” Drezner Alperin said. “Some people give, some people can’t.”

Now, schools have a new tool to try to save their Title I funding — and their socioeconomic diversity.

In 2015, the education department launched the “Diversity in Admissions” program, which allows schools to reserve a portion of their seats for disadvantaged students — some have saved spots for students who qualify for free or reduced-price lunch or who are still learning English. So far, 42 schools have joined.

For schools in gentrifying neighborhoods, the program can help ensure they remain an option for low-income families — and that the schools hold onto their Title I funding. But it can also work in the other direction: Schools popular with middle-class families can set aside spots for a larger number of disadvantaged students than they currently serve. Doing so can boost their diversity and also, potentially, help them qualify for Title I money.

That’s what Principal Zuckerman is hoping to engineer at the Castle Bridge School.

The school’s progressive approach, where students get to choose which books to read and projects to pursue, appeals to many middle-class families, among others. But its dual-language classes taught in English and Spanish — along with targeted recruitment — has ensured the school enrolls many low-income students, too.

The result is a mixed-income school that has, until now, fallen just short of the Title I cutoff. Without that boost, the school uses $100,000 from its budget to pay for after-school programs, while the parent organization raises more than $2,000 a month to support a snack program that lets students cook and share food.

So when Zuckerman had the chance to become one of the first schools to join the Diversity in Admissions program, she jumped at the opportunity to protect the school’s diversity from the threat of gentrification — and to push it above the Title I threshold. With 60 percent of seats reserved for students who qualify for free or reduced-price lunch, and another 10 percent set aside for children with incarcerated parents, she expects Castle Bridge to qualify for Title I funding next school year.

The extra funding would free up money in the school’s budget to take students on a camping trip where students from different backgrounds would get to explore the world together, Zuckerman said. In that way, the Title I money would help the school truly take advantage of its diversity.

“The idea is that we want to bring multiple communities that can learn how to speak across cultural divides or differences,” she said.

School Finance

Indianapolis Public Schools leaders could scale back their appeal for tax increases

PHOTO: Meghan Mangrum

With little public support and mounting criticism, Indianapolis’ largest school district may scale back its nearly $1 billion request for increased funding from taxpayers.

Indianapolis Public Schools Board President Michael O’Connor told Chalkbeat on Wednesday that the board would likely consider a proposal next week that would reduce the potential tax increase.

All the board members present voted in favor of asking voters for up to $936 million over eight years at a meeting this past December. But there is a consensus among board members that the original proposal would raise taxes too much, O’Connor said.

“The school system needs more revenue,” O’Connor said. But “we think that’s high.”

Superintendent Lewis Ferebee’s administration is working on coming up with a revised proposal, district chief of staff Ahmed Young confirmed. But officials have not yet finalized how much the amount might be trimmed or what services would be reduced to bring down the price tag.

The revelation comes on the heels of stinging public criticism leveled against the district for asking for such a large tax increase. On Wednesday, Indiana State Board of Education member and Indianapolis resident Gordon Hendry slammed IPS’ plan to raise taxes during a state board meeting.

“This may be the most nonchalant billion-dollar tax increase ever approved by anyone,” said Hendry, a Democrat.

The original plan, which was approved by the state for inclusion on the May ballot less than a week ago, includes a measure that would raise up to $92 million per year for operating expenses such as teacher salaries and one that would pay for up to $200 million in improvements to school buildings.

If voters signed off on the operating referendum, their property taxes would rise by as much as $0.59 on each $100 of assessed value, while the capital referendum would raise $0.1384 per $100 of assessed valuation.

The board will not alter the referendum that provides money for building improvements, O’Connor said. But it will consider changing how much it seeks for operating expenses, the part responsible for the bulk of the tax increase.

In the months since the original proposal was unveiled in November, few advocates or community organizations have spoken out in support of the referendums. Instead, groups such as the Indianapolis Chamber of Commerce stayed quiet as they discussed the plan internally.

It’s important to the city that the school district is successful, said Mark Fisher, chief policy officer for the Chamber. There also is general agreement that the district needs more funding, he said. But the group is waiting to hear more from the administration about how the money will be spent.

“It’s a large amount,” Fisher said. “Is this the right amount?”

Tony Mason from the Indianapolis Urban League raised similar questions.

“IPS definitely requires more support to serve the vast needs of its diverse student population,” Mason wrote in a statement. But the district must make the case in detail for the substantial amount it is requesting.

“IPS needs to be mindful of the already existing and unique tax burdens of those living in the IPS district,” he added.

The district has said the referendums are essential because of declining federal, state, and local revenue. According to the district, the operating referendum would pay for special education services, transportation, and regular maintenance. But the bulk of the money, 72 percent, would help pay regular raises to teachers. The referendum to pay for improvements to school buildings would fund updates such as new lighting and door security.

If it passed, the original operating referendum would increase the district’s annual revenue by nearly $3,000 per student. By comparison, a referendum passed in Washington Township in 2016 raised annual revenue by less than $600 per student.

When the initial plan was announced in December, Ferebee told Chalkbeat that political considerations were not used to determine the amount of the referendums.

“We didn’t arrive at this number based on what we thought would be politically appropriate and soothing, but what we actually need to continue to thrive as an organization,” Ferebee said at the time.

But it appears the political challenge of asking voters to dramatically raise their own taxes is more salient for the board.

Board members have privately heard concerns from constituents about the size of the referendums, O’Connor said. He said the district also needs to present more detail to taxpayers about exactly how the money would be spent.

Because $92 million per year is the estimated maximum amount the district could raise if the measure passes, it was always a ceiling, said Young. After the board voted to pursue the initial proposal, the district has continued to do “due diligence.”

“It’s an evolutionary process,” he added.

On Tuesday, school board member Kelly Bentley told Chalkbeat that reducing the amount the district is seeking could help increase the chance that voters approve the referendums and reduce the burden on taxpayers.

“I believe strongly that we are asking no more than what we need,” Bentley said. “But I would rather be successful than not successful in the referenda.”

Correction: February 15, 2018: This story has been corrected to attribute the statement from the Indianapolis Urban League to Tony Mason.

School Finance

IPS bid for more money is ‘the most nonchalant billion-dollar tax increase ever,’ state official says

PHOTO: Chalkbeat staff
Indiana State Board of Education member Gordon Hendry raised concerns about referendums IPS plans to ask voters to approve in May.

An Indiana education official is calling out Indianapolis Public Schools for how the district has handled a recent proposal to collect almost $1 billion from taxpayers over the next eight years.

Gordon Hendry, a member of the Indiana State Board of Education and an Indianapolis resident, said the district’s plan to ask voters this May to approve two referendums to increase funding has not been transparent. The proposed tax increase is also way too high, he said.

“This may be the most nonchalant billion-dollar tax increase ever approved by anyone,” Hendry, a Democrat, said Wednesday at the board’s February meeting.

So far, few education advocates or community organizations have been vocal in their support for the referendums, which total $936 million. Voters have raised concerns about the amount their taxes would increase and how the money would be spent.

The district has said one referendum would raise up to $92 million per year for eight years to pay for teacher raises, special education services, transportation and regular maintenance. The other asks voters to support $200 million in improvements to school buildings, primarily safety updates such as new lighting and door security.

Hendry said the district has not provided voters with enough information about what the new money would be used for, instead offering “general statements.” He said he thinks the district should already be able to cover those costs, such as transportation and facilities, with its existing state and local funding.

“Our entire state budget for education is $7 billion each year,” he said.

IPS, like other districts, receives state, local, and federal dollars. Hendry pointed out that under Indiana’s school funding formula, urban districts already receive more money per-student than other districts, although that is supposed to support students who might be more costly to educate than those in suburban or rural districts. Urban schools typically have more students living in poverty, learning English or with disabilities.

The referendums would come with considerable tax increases for those living within IPS boundaries, Hendry said, and would disproportionately affect low-income families.

Hendry didn’t limit his criticisms to IPS. He urged Indiana lawmakers to freeze all school funding referendums and set up a committee this summer to study how to improve the efficiency of district spending, as well as how to address “long-standing” problems with ensuring teachers are adequately paid.

Going forward, Hendry said referendums need more oversight. He proposed that the state board or mayors and city councils should approve them — a measure he said would increase accountability.

More than a third of school districts have asked for tax increases since state lawmakers capped how much local governments could collect in property taxes in 2008. About 60 percent of them have been successful, including six in Marion County.