Financing K-12 Education Financing K-12 Education in the Bloomberg Years, in the Bloomberg Years, 2002-20082002-2008

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 QuestionsKey QuestionsHow 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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OutlineOutlineExamine 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 NYC saw steady increase in total revenues pp revenues pp

and passed NYS average by and passed NYS average by 20062006

NYC (2008): $19,075 NYS (2008): $18,374 NYC (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

dolla

rs

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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2002-20082002-2008NYC’s revenue pp increased by NYC’s revenue pp increased by

$5,785 $5,785 Rest of New York State by $3,205Rest 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 NYCtotal revenue increase $3,205 $5,785percent 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 NYC: Expenditures pp for classroom grew slowestslowest

Total (‘08)= $17,696 Direct = $15,498 Classroom Total (‘08)= $17,696 Direct = $15,498 Classroom = $8,734= $8,734

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Eight of the 100 largest school Eight of the 100 largest school districts spent over $15,000 PP in districts spent over $15,000 PP in

20072007

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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 Did NYC’s increased spending reflect higher cost of inputs?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, 2002-2008NYC schools, 2002-2008Share 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, 2008Total Direct Classroom

Citywide Spec Ed $65,681 $63,205 $31,971Integrated Spec Ed* $32,710 $31,477 $15,922General Ed $14,525 $12,348 $7,218*estimated

Significant changes in teacher Significant changes in teacher salariessalaries

2002-20082002-2008Teacher 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 NYCAcross Schools in NYCUnder FSF, NYCDOE proposed budget weights Under FSF, NYCDOE proposed budget weights

based on student characteristicsbased on student characteristics

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Table 2: Fair Student Funding Weights for the 2008-09 Academic YearK-5 grade 6-8 grade 9-12

Grade Weights 1.00 1.08 1.03

Need WeightsAcademic Intervention

Poverty 0.24Achievement* - well below standards 0.40 0.50 0.40Achievement* - below standards 0.25 0.35 0.25

ELL 0.40 0.50 0.50Special Education

Less than 20% 0.56 0.56 0.5620-60% 0.68 0.68 0.68Greater than 60% (self-contained) 1.23 1.23 0.73Greater than 60% (integrated) 2.28 2.28 2.52

Portfolio WeightsSpecialized Audition Schools n/a n/a 0.35Specialized Academic Schools n/a n/a 0.25CTE Schools n/a n/a 0.05 - 0.26Transfer 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 Changes in direct expenditures across schools: Were FSF “factors” schools: Were FSF “factors”

emphasized?emphasized?Yes, some…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 2008Elementary 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 Weights on FSF factors more significant for classroom significant for classroom

spending spending (particularly in elementary (particularly in elementary

schools)schools)

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Classroom expenditures per pupil,changes in weights: 2001 and 2008Elementary 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 Higher poverty schools had larger changes in spending PPchanges in spending PP

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Changes in direct expenditures per pupil (2001-2008), by poverty quintileElementary 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 Lower “class sizes” but similar average salary in high poverty average salary in high poverty

schoolsschools

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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-Tch1st 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*** -0.84observations 612 612 193 193 153 153

Elementary Middle High

Bottom line on Distributions Across Bottom line on Distributions Across SchoolsSchools

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 What about private money?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 The Fund for Public Schools (FPS)(FPS)Responsible for facilitating private-public Responsible for facilitating private-public

partnerships and soliciting philanthropic partnerships and soliciting philanthropic fundingfunding

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 2009

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Private funds also sometimes Private funds also sometimes flow through intermediary flow through intermediary

organizationsorganizations

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 $20,424,441Good Shepherd $36,197,537 $44,672,271 $53,291,887 $134,161,695Harlem Children's Zone** $26,410,020 $30,506,330 $41,063,619 $97,979,969New Visions for Public Schools** $14,363,009 $13,710,069 $18,254,984 $46,328,062Outward Bound $3,720,135 $4,286,244 $4,286,244 $12,292,623The After School Corporation** $28,587,083 $30,561,487 $30,847,880 $89,996,450Urban 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 Private dollars comprise a relatively small share of the direct spending on small share of the direct spending on education in NYC.education in NYC.

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Key findingsKey findingsSince 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 futureLessons for the futureReal 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 dollars

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Lessons for other districtsLessons for other districtsNYC 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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