Financing K-12 Education in the

Bloomberg Years, 2002-2008

Leanna Stiefel and Amy Ellen SchwartzIESP, Wagner and Steinhardt Schools, NYU

New York City Education Reform Retrospective: A Review and Synthesis

of the Children First Initiative, 2002-2000

November 2010

Thanks to Elizabeth Debraggio and Lila Nazar de Jaucourt for excellent research assistance

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Key Questions

How did public resources change during

Bloomberg‟s first two mayoral terms?

◦ Changes in levels or mixes of revenues?

How were resources distributed across

schools in NYC?

◦ Changes over the 2002-2008 period?

What role did private money play?

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Outline

Examine publicly provided resources in NYC ◦ Compared to the rest of New York State

◦ Compared to other large cities

Examine correlates (drivers) of higher costs

Analyze distribution of resources within NYC

(across schools)

Highlight other sources of school funding

Conclude

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NYC saw steady increase in total revenues pp

and passed NYS average by 2006NYC (2008): $19,075 NYS (2008): $18,374

0

5000

10000

15000

20000

25000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

do

llar

s

year

Figure 7: Total Revenue Per Pupil*: New York State (w/o NYC) and New York City

New York State (w/o NYC)

New York City

*CPI Adjusted with base year of 2008.*Total Revenue is the sum of State, Local and Federal Revenues*Duplicated Combined Adjusted Average Daily Membership

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2002-2008

NYC‟s revenue pp increased by $5,785

Rest of New York State by $3,205

Disproportionately financed by increases in state

and federal funding, not local

PP Revenue to “DOE schools” (not charters or FT

spec. ed. contact) about $5,000

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NYS NYC

total revenue increase $3,205 $5,785

percent increase from:

federal sources 2.1% 7.2%

state sources 31.7% 34.5%

local sources 66.3% 58.2%

NYC: Expenditures pp for classroom grew slowestTotal („08)= $17,696 Direct = $15,498 Classroom = $8,734

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Eight of the 100 largest school districts

spent over $15,000 PP in 2007

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Twenty-five Districts with the Highest Per Pupil Expenditures (PPE) among the Largest 100 Public School Districts, 2006-07

state enrollment PPE

Boston MA 56,388 $21,801

New York City Public Schools NY 999,150 $20,162

District of Columbia Public Schools DC 56,943 $20,029

Loudoun County Public School VA 50,383 $18,921

Columbus City OH 56,003 $16,078

Montgomery County Public Schools MD 137,814 $15,800

Cleveland Municipal City OH 55,593 $15,141

Philadelphia City School District PA 178,241 $15,077

Howard County Public School MD 49,048 $14,777

Baltimore City Public Schools MD 84,515 $14,591

Fairfax County Public Schools VA 163,952 $14,294

Atlanta Public School GA 50,631 $14,186

Los Angeles Unified CA 707,627 $13,407

Baltimore County Public Schools MD 105,839 $13,387

Prince George's County Public Schools MD 131,014 $13,174

Detroit City School District MI 117,609 $13,066

Dade County School District FL 353,790 $12,998

Anne Arundel County Public Schools MD 73,066 $12,871

Plano Independent School District TX 52,997 $12,764

Milwaukee School District WI 89,912 $12,708

Palm Beach County School District FL 171,431 $12,695

Lee FL 78,981 $12,449

San Diego Unified CA 130,983 $12,239

Fulton County GA 83,861 $11,997

Austin Independent School District TX 82,140 $11,929

Notes: Total expenditures exclude capital outlays, interest on debt, and payments to private and public charter schools.

Source: U.S. Department of Education, National Center for Education Statistics, Characteristics of the 100 Largest

Public Elementary and Secondary School Districts in the United States: 2007-08.

Did NYC‟s increased spending reflect

higher cost of inputs?

Did the share of special ed students

increase?

Were there increases in poor or LEP

students?

How much did teacher salaries increase?

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NYC schools, 2002-2008 Share PT and FT special education students up

◦ PT sped: 5.4% to 9.6%

◦ FT sped: 5.2% to 6.2%

Still, $ General Ed PP outpaced $ Special Ed PP

(35% vs. 31% increase)

But level of $ Special Ed PP is much higher than level

$ General Ed PP

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Expenditures per pupil, 2008

Total Direct Classroom

Citywide Spec Ed $65,681 $63,205 $31,971

Integrated Spec Ed* $32,710 $31,477 $15,922

General Ed $14,525 $12,348 $7,218*estimated

Significant changes in teacher salaries

2002-2008

Teacher salaries, on average, increased

nearly 25% in NYC schools (69% increase

in fringe)

Reflects both raises and changing mix of

teachers

Little change in share of poor or LEP

students

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Across Schools in NYCUnder FSF, NYCDOE proposed budget weights based on student

characteristics

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Table 2: Fair Student Funding Weights for the 2008-09 Academic Year

K-5 grade 6-8 grade 9-12

Grade Weights 1.00 1.08 1.03

Need Weights

Academic Intervention

Poverty 0.24

Achievement* - well below standards 0.40 0.50 0.40

Achievement* - below standards 0.25 0.35 0.25

ELL 0.40 0.50 0.50

Special Education

Less than 20% 0.56 0.56 0.56

20-60% 0.68 0.68 0.68

Greater than 60% (self-contained) 1.23 1.23 0.73

Greater than 60% (integrated) 2.28 2.28 2.52

Portfolio Weights

Specialized Audition Schools n/a n/a 0.35

Specialized Academic Schools n/a n/a 0.25

CTE Schools n/a n/a 0.05 - 0.26

Transfer Schools n/a n/a 0.40

Note: achievement weights are only given to 4th and 5th graders in elementary schools.

Weights are identical to those for the 2009-10 and 2010-11 academic years.

Source: "See Your School's Budget" on the NYCDOE website

Changes in direct expenditures across schools:

Were FSF “factors” emphasized?

Yes, some…

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Increased weights for low performance across all school

levels

Also on special education in elementary and middle

schools

Direct expenditures per pupil,changes in weights: 2001 and 2008

Elementary Middle High

% free lunch 3.876 -10.034 7.129

% resource room 72.235** 27.212 -64.653

% FT special educ. 107.352*** 118.956*** -55

% LEP 4.865 8.53 13.46

% low achieving 29.116* 74.027*** 27.706**

observations 1,312 600 510

Weights on FSF factors more significant

for classroom spending

(particularly in elementary schools)

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Classroom expenditures per pupil,changes in weights: 2001 and 2008

Elementary Middle High

% free lunch 4.982* 0.617 6.849*

% resource room 29.933 29.589 -34.251

% FT special educ. 52.683*** 72.016*** 8.014

% LEP 8.997* 5.563 12.652*

% low achieving 22.416*** 51.463*** 15.958***

Observations 1312 600 510

Higher poverty schools had larger changes

in spending PP

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Changes in direct expenditures per pupil (2001-2008), by poverty quintile

Elementary Middle High

1st poverty quintile 3,962.38*** 3,436.70*** 1,880.70***

2nd poverty quintile 4,451.18*** 4,082.12*** 2,904.00***

3rd poverty quintile 4,706.83*** 6,671.72*** 5,533.61***

4th poverty quintile 5,237.03*** 6,653.45*** 3,837.09***

5th poverty quintile 5,272.94*** 5,723.34*** 3,626.30***

observations 612 194 153

Lower “class sizes” but similar

average salary in high poverty schools

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Changes in teacher salaries and class size (2001-2008), by poverty quintile

Tchr Salary Pup-Tch Tchr Salary Pup-Tch Tchr Salary Pup-Tch

1st poverty quintile 22,190.94*** -0.267 19,012.20*** -0.114 23,199.50*** 0.709**

2nd poverty quintile 24,528.35*** -0.491*** 20,035.99*** -0.187 23,404.59*** -0.497*

3rd poverty quintile 23,473.79*** -0.577*** 21,178.33*** -0.924*** 25,690.27*** -1.221***

4th poverty quintile 22,825.21*** -0.816*** 20,225.95*** -0.998*** 22,298.35*** -1.315***

5th poverty quintile 22,076.55*** -0.718*** 19,109.62*** -0.961** 24,290.51*** -0.84

observations 612 612 193 193 153 153

Elementary Middle High

Bottom line on Distributions Across Schools

Children First and FSF changed resource

distributions for elementary and middle schools

◦ Weights on special education and achievement increased

◦ Cross-sectional models in 2008 better explained the

variation in expenditures

Higher poverty schools had larger increases in

PPE, larger decreases in class size, but smaller

increases in teacher salaries

The distribution of resources across high schools

still largely unexplained

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What about private money?

Private/philanthropic support supplements public funding

◦ Fund for Public Schools (FPS) works with NYCDOE

◦ Foundations also help education oriented nonprofits

◦ Alumni and parent organizations, private philanthropists

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The Fund for Public Schools (FPS) Responsible for facilitating private-public

partnerships and soliciting philanthropic

funding

Restructured under Bloomberg and Klein ◦ Predicated on need for “greater leadership and

accountability…to create meaningful partnerships with

the private sector” (FPS, 2005)

◦ Works with NYCDOE priorities

Two broad initiatives:◦ Securing private funding for education reform

◦ Raising awareness about the needs of public schools

Raised $255 million from 2002 and 200918

Private funds also sometimes flow

through intermediary organizations

Table 11: Program Expenses of Select New York City Service Providers or Intermediary Organizations, 2006-2008

Organization 2005 2006 2007 Total

Achievement First $4,273,833 $7,051,904 $9,098,704 $20,424,441

Good Shepherd $36,197,537 $44,672,271 $53,291,887 $134,161,695

Harlem Children's Zone** $26,410,020 $30,506,330 $41,063,619 $97,979,969

New Visions for Public Schools** $14,363,009 $13,710,069 $18,254,984 $46,328,062

Outward Bound $3,720,135 $4,286,244 $4,286,244 $12,292,623

The After School Corporation** $28,587,083 $30,561,487 $30,847,880 $89,996,450

Urban Assembly $2,411,566 $3,257,934 $4,522,773 $10,192,273

Total $115,963,183 $134,046,239 $161,366,091 $411,375,513

** Program expenses may include administrative expenses

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Private dollars comprise a relatively small share

of the direct spending on education in NYC.

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Key findings

Since Bloomberg assumed office, inflation adjusted per pupil revenues increased by roughly $5,000

The composition of NYC students changed◦ Larger share of special education students

◦ Shift from segregated to integrated classes

School characteristics identified in FSF formula explained more of the variation in intradistrict expenditures

While private philanthropy may have provided strategic funding, the shares were quite small

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Lessons for the future Real growth in revenue during Bloomberg‟s first six

years is highly unlikely to continue◦ Public awareness of NYS‟ structural deficit will likely

result in budget slowdowns

Federal government funds comprise a small share of total revenues – prospects for federal “bailout” dim

NYC government faces demand from other areas (health, infrastructure, etc.)

SPED management could yield savings…

What will teachers receive?

Philanthropy cannot substitute for public dollars22

Lessons for other districts NYC experience suggests private money

directly coordinated with district‟s mission

may provide flexibility

◦ Is this dependent on corresponding increases in

public dollars to implement?

Importance of garnering support from

teachers and unions

Growth in special education requires

thoughtful decision about most effective

means of service provision

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