Iesp Postpresentation

Amy Ellen SchwartzNew York University

Ross RubensteinSyracuse University

Leanna StiefelNew York University

October 5, 2007

Why Do Some Schools Get More and Others Less?An Examination of School-Level Funding in

New York City

http://steinhardt.nyu.edu/iesp/

A.E. Schwartz presentation, Research Partnership for NYC Schools

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• 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?

In 2003-2004, the typical NYC elementary school budget was roughly $13,000 per pupil

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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 19.20 4.70

% Special education 2.96 12.80 % more than 5 years experience 32.40 48.90

% less than 2 years in this school 100.00 37.80 % passing Math 60.80 47.20

% passing Reading 36.60 35.80

The Answer Matters

• 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.

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The Time is Ripe

• 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.

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Outline of Talk

• Background on School Resource Allocation

• Analyses of School Spending in New York City

• Implications for Policy

Four Lessons from Prior Research

• 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 position-based formulas and teacher sorting.

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Where does the money come from?

• 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.

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Allocation Basics - Teachers

• 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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How Does Budgeting Teacher Positions Affect School budgets?

• 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.

Advanced Resource Allocation• 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.11

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Empirical Analyses• 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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Data

• 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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Five Measures of Resources

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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Tota

l Spe

ndin

g P

er P

upil

0 20 40 60 80 100Percent Free Lunch Eligible

Elementary Schools, 2003-04Total Spending

R2 = 0.08 Slope = 27.3 n=682

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1500

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2500

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Gen

eral

Ed

Spe

ndin

g P

er P

upil

0 20 40 60 80 100Percent Free Lunch Eligible

Elementary Schools, 2003-04General Ed Spending

R2 = 0.08 Slope = 19.9 n=682

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1500

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2500

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Tax

Levy

and

Sta

te O

pera

ting

Aid

Per

Pup

il

0 20 40 60 80 100Percent Free Lunch Eligible

Elementary Schools, 2003-04Tax Levy and State Operating Aid

R2 = 0.01 Slope= -5.1 n=682

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010

0020

0030

0040

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Titl

e I R

even

ues

Per

Pup

il

0 20 40 60 80 100Percent Free Lunch Eligible

Elementary Schools, 2003-04Title I Revenues

R2 = 0.61 Slope= 15.6 n=682

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Rev

enue

s F

rom

Oth

er S

ourc

es P

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0 20 40 60 80 100Percent Free Lunch Eligible

Elementary Schools, 2003-04Revenues From Other Sources

R2 = 0.29 Slope = 9.4 n=682

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1500

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Dol

lars

Per

Pup

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0 20 40 60 80 100Percent Free Lunch Eligible

Elementary Schools, 2003-04

Total Spending

Gen Ed Spending

Tax Levy and State Operating Aid

Other Revenues

Title I Revenues

Regression Analyses Describe the Determinants of Spending

• 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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Adjusted Short Changes

Long Changes

Pct Poor 27.3 12.0 0.2 6.0R2 0.08 0.61 0.75 0.96

Pct Poor 19.9 15.4 -1.6 4.1R2 0.08 0.42 0.71 0.94

Pct Poor -5.1 -6.4 10.0 -1.1R2 0.01 0.33 0.7 0.93

Pct Poor 15.6 15.3 1.0 4.2R2 0.61 0.65 0.71 0.89

Pct Poor 9.4 6.5 0.2 1.1R2 0.29 0.52 0.75 0.87

Total Spending

General Ed

Tax Levy and Operating Aid

Title I Only

Other Sources

Poverty Coefficients

Key Results• 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.23

Weighted Student Funding (WSF)?• 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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Cautions• 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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Agenda for Further Research• 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.