A.E. Schwartz presentation, Research Partnership for NYC Schools
Why Do Some Schools Get More and Others Less?
An Examination of School-Level Funding in
New York City
Amy Ellen Schwartz
New York University
Ross Rubenstein
Syracuse University
Leanna Stiefel
New York University
October 5, 2007 http://steinhardt.nyu.edu/iesp/

In 2003-2004, the typical NYC elementary school budget was roughly $13,000 per pupil
• But:
– some schools received as little as $9,000.
– others more than $15,000.
• Why?
– Differences in the needs of students?
– Differences in costs?
– Or is it just unfair and inefficient?
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Two Schools, Similar Poverty, Different Spending, 2003-04
P.S. A P.S. B
Total Spending per Pupil $9,559.38 $17,928.26
Gen Ed Spending per Pupil $8,893.80 $14,243.63
% poverty 83.60 83.40
% LEP
% Special education
19.20
2.96
4.70
12.80
% more than 5 years experience 32.40
% less than 2 years in this school 100.00
48.90
37.80
% passing Math 60.80
% passing Reading 36.60
47.20
35.80
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• If differences are driven by differences in the needs of students then they may be both fair and efficient.
• If they aren’t, then redistributing resources will be critical for improving equity and can improve student performance.
4

• NCLB reauthorization focuses attention on resources, outcomes and accountability at the school level.
•
CFE vs. New York State brings similar focus and additional state funds to NYC schools.
•
NYCDOE is reforming their budget allocation processes in their Fair Student Funding (FSF)
Initiative.
5

• Background on School Resource Allocation
• Analyses of School Spending in New York City
• Implications for Policy
6

• Disparities in spending across schools within a district are common.
• Large districts are more likely to have large disparities.
• Schools with poorer children have less experienced, less educated and less expensive teachers.
• School “budgets” largely reflect positionbased formulas and teacher sorting.
7

• City, State and Federal funds.
• In 2003-4 the average elementary school budget was:
– Almost 80% City Taxes and State Operating
Aid.
– About 7% from the Federal Title I program that targets high poverty schools
– About 13% from myriad categorical grant programs.
8

• Teacher positions are allocated based upon:
– Enrollment
– Class size maximums (depends on grade level)
– e.g., 100 first grade students would mean 5 teachers if the district class size max is 20.
• Salaries are determined by district schedule and money “budgeted” to the school depending upon the teachers hired.
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• Schools with higher paid teachers get funding to cover those positions; schools with lower-paid teachers do not receive similar amounts.
•
Position-based budgeting concentrates experienced teachers in schools where needs are lower.
•
Higher staff turnover concentrates new teachers in low-performing schools, meaning they have lower budgets.
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• Overhead allocations for administration and building services
• Specialized formulas target students with special needs. E.g. Poor, English Language
Learners, Learning Disabilities
• Targeted funds based upon school characteristics (e.g., school size) or special programs.
• “Hold Harmless” provisions limit change.
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• Examine the distribution of funding across schools
– By source (taxes and state aid, Title I)
– By grade level (elementary vs middle)
• Examine changes over time
• Goal is to shed light on the factors that drive disparities and provide a benchmark to gauge the impact of policy changes.
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• NYC Department of Education, Annual School Reports and
School-Based Expenditure Reports, 2000-01 to 2003-04
• School-level spending variables by source of funds
• Key school-level variables on student/school needs:
• Eligible for free lunch
• Limited English proficient
• Enrollment (school size)
• Resource room and special education
• Recent immigrant
• Student performance – percent level 1 fourth and eighth grade
• Sample: N = 911 in 2003-04
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1) Total spending per pupil
2) General Education Funding per pupil
(includes PTSE funds)
3) Tax levy and state operating aid - Gen Ed
4) Title I – Gen Ed
5) Other – Gen Ed
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Total Spending
Elementary Schools, 2003-04
0 20 40 60
Percent Free Lunch Eligible
80 100
R 2
15
= 0.08 Slope = 27.3 n=682

General Ed Spending
Elementary Schools, 2003-04
0 20 40 60
Percent Free Lunch Eligible
80 100
R 2
16
= 0.08 Slope = 19.9 n=682

Tax Levy and State Operating Aid
Elementary Schools, 2003-04
0 20 40 60
Percent Free Lunch Eligible
80 100
R 2
17
= 0.01 Slope= -5.1 n=682

Title I Revenues
Elementary Schools, 2003-04
0 20 40 60
Percent Free Lunch Eligible
80 100
R 2
18
= 0.61 Slope= 15.6 n=682

Revenues From Other Sources
Elementary Schools, 2003-04
0 20 40 60
Percent Free Lunch Eligible
80 100
R 2
19
= 0.29 Slope = 9.4 n=682

0
Elementary Schools, 2003-04
Total Spending
Gen Ed Spending
Tax Levy and
State Operating
Aid
20 40 60
Percent Free Lunch Eligible
80
Other Revenues
Title I Revenues
20
100

• First using only school and student characteristics for 2003-04 (Cross-sectional)
– Including Pct Poor, LEP, PTSE and school size
• Next examining change over time
– Between 2002-03 and 2003-04 (Short)
– Between 2000-01 and 2003-04 (Long)
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Poverty Coefficients
Pct Poor 27.3
R
2
0.08
Adjusted
Short
Changes
Total Spending
12.0
0.2
0.61
0.75
Pct Poor 19.9
R
2
0.08
General Ed
15.4
0.42
-1.6
0.71
Pct Poor -5.1
R
2
0.01
Tax Levy and Operating Aid
-6.4
10.0
0.33
0.7
Pct Poor 15.6
R
2
0.61
Pct Poor 9.4
R
2
0.29
Title I Only
15.3
0.65
1.0
0.71
Other Sources
6.5
0.52
0.2
0.75
Long
Changes
6.0
0.96
4.1
0.94
-1.1
0.93
4.2
0.89
1.1
0.87
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• Funding reflects student need
– i.e., a 1% point increase in the pct. PTSE is associated with $69 more in funding per pupil
• Higher poverty means more Title I and
Other funds; less Tax Levy/Operating Aid.
• Change matters but the response is sluggish.
• Last year’s funding is an excellent predictor of this year’s funding
• Much variation is unexplained.
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• Resources “follow the student.”
• Allocates dollars and not positions.
• Amount depends upon student needs
(characteristics) with higher “weights” given to students with greater needs.
• Transparent targeting of resources
• Effectively reduce unexplained variation.
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• No adjustments for concentration
– Economies/diseconomies of scale ignored
• Transparent incentives may have unintended consequences.
– Getting weights right is critical
– Evidence base is thin.
• Rapid change can be difficult
• Implications for teachers.
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• We need to know the cost of student needs.
• Should there be a weight for immigrants?
• For student mobility?
• We need to understand (dis)economies of scale.
• We should learn from experience:
• Does Title I money get where it’s intended and does it improve student performance?
• What was the impact of the recent changes in seniority transfer rules?
• Evaluation of FSF has to start now – to study implementation and school responses.
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