New York City schools chancellor Joel Klein has seized on a popular reform idea for the nation’s largest school system: “fair student funding,” a new formula for allocating taxpayer resources among Gotham’s more than 1 million students. Klein believes that spending more money on the system’s lowest-performing pupils will make a huge difference in their performance. But “fair student funding” could erode support for public schools among taxpayers and parents.

The New York City Department of Education came up with the new funding approach, which is based on a Fordham Foundation proposal, to address a long-standing disparity. While the $17-billion-a-year school system spends an average of nearly $5,000 per student on “classroom instruction”—a figure that doesn’t include massive spending on buildings, school buses, school meals, or staff health benefits—the actual amounts vary widely from school to school. At some schools, students garner nearly $8,600 in instruction resources, while at others they get only $2,500, according to two new reports by Ana Champeny for the city’s Independent Budget Office.

The funding disparity isn’t the result of racism or class warfare. The 20 percent of high schools that spend the most money have more students in poverty, more black and Hispanic students, and fewer white students (as percentages of their student bodies) than the 20 percent that spend the least. At the elementary- and middle-school level, though the best-funded schools do have more white kids and fewer Hispanics than the worst-funded schools, they also have more black students. The difference in spending is largely due to class size and school size: on average, bigger classes and bigger schools spend less money per student on instruction.

Klein could have tackled the problem by assigning each student a fixed amount of money for instructional spending, with slightly more spending for older students, and allowing the funds to follow students into whichever schools they attended. Instead, the chancellor chose to assign each student a “need-based weight” and to fund that student—really, that student’s school—accordingly. Under the new formula, as the IBO report details, each school will start out with “foundation money” of $200,000; each student will then get a “base weight” allotment of roughly $4,000, with slightly more money for middle- and high-school kids. After those initial allocations, the formula gets complicated. Each student scoring “well below standards” and entering fourth or fifth grade, or a high-school grade, gets an extra $1,500; students “below standards” get more than $900. Middle-school kids scoring “well below standards” get nearly $1,900, with “below standards” kids getting an extra $1,300. And each student who enters school in poverty before the fourth grade gets an extra $900 (these younger kids haven’t taken any standardized tests yet, so the education department is using poverty as a proxy for low achievement, since more than 90 percent of low-achieving students are poor, according to city data).

Special-ed students will get as much as $9,500 above the baseline annually, depending on how much of the day they spend in special instruction. “English language learners” will get $1,500 to $1,900 more than the base, and transfer students under the No Child Left Behind law will get slightly more than that. By contrast, a student at an academically competitive school like Stuyvesant—where prospective students have to take a tough entrance exam—would get only $950 above his “base weight.” These changes will be gradual, partly in response to union and legislative opposition, with previously overfunded schools getting to keep their extra money for at least two years. But over time, if New York’s next mayor decides to keep the program in place—certainly not a guarantee, though Democratic officials in much smaller cities have embraced similar ideas—they will have a significant effect on school funding.

The education department designed the new funding structure so that schools won’t be penalized if, say, a student scoring “well below standards” improves; the school will get to keep his money despite the improvement. But the structure certainly offers potential for fraud. Schools will have an incentive to keep borderline kids in special ed, or keep them in it for a greater portion of the school day.

More importantly, the plan formally defines the public school system as a social-service program that transfers wealth from the rich and the middle class to the poor. Political scientists know that the most efficient way to erode public support for a universal program is to turn it into a program for the poor; that’s why it was much easier to reform welfare than it has been so far to reform Social Security and Medicare. And though 70 percent of public school students are poor, the system depends on middle-class support. Many middle-class residents in Brooklyn, Queens, and Staten Island send their kids to public schools, accounting for a good part of the 30 percent of students who aren’t poor. These voters are among those New Yorkers who often tell pollsters that quality education is their Number One priority; their support has allowed Mayor Michael Bloomberg to increase education spending. But how will a middle-class Queens mother feel about paying ever-higher property taxes for more education spending when she knows that under the new funding rules, her child won’t benefit proportionally from those taxes?

Of course, middle-class parents might not mind spending their tax dollars on “fair student funding” if the program actually works. Most people want the poor to get ahead. But history shows that success for the new program is far from assured. Under the old system, while 28 percent of kids in the worst-funded elementary and middle schools were “low academic achievers,” according to the Department of Education and the IBO, nearly 28 percent did just as poorly at the best-funded schools. At high schools, 36 percent of students did poorly at the worst-funded schools, versus 32 percent at the best-funded, the IBO’s data show.

If the new system doesn’t produce results, middle-class taxpayers might not be the only upset parents. Imagine that you’re the single, working-poor parent of a middle-school student who scores low on standardized tests and is stuck in special education all day for years on end, with little improvement. It might dawn on you that your kid is a cash cow for the school—and you might demand that the politicians put your child’s money to use somewhere else, maybe as a tuition payment at a parochial school. That would make “fair student funding” an even more radical reform than its advocates intend.


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next