Study on School Funding in New York City

Recently, the New York City Department of Education announced an ambitious new school funding initiative. Known as Fair Student Funding (FSF), the policy seeks to redress past inequities in the distribution of local and state funds among schools.

At last month’s inaugural conference of the Research Partnership for New York City Schools, a non-partisan research consortium, a team of researchers from NYU and Syracuse presented their study on school-level funding in New York City just prior to the launch of FSF.

Composed of Professor Amy Ellen Schwartz, professor of public policy, education, and economics at NYU Steinhardt and NYU Wagner; Leanna Stiefel, professor of economics, NYU Wagner; and Ross Rubenstein, associate professor of public administration, Syracuse University, the team examined the current distribution of spending across the City’s 911 elementary and middle schools. Their study provides a context for understanding FSF and provides a base point against which the impact of the policy can be measured.

Experts and policymakers agree that equitable distribution of resources among schools is critical for improving student outcomes. But evidence suggests that among schools with similar student characteristics, funding varies considerably. Since students who are poor, disabled, or English language learners cost more to educate, it is critical for funding policies to allocate more resources for these student populations.

"Our research seeks to explain to what extent variations in City and state funding were due to the needs of the students in the schools," said Stiefel. "We were surprised to find these factors only explained 33% of the variation in funding from the city and state. In other words, more than half of the variation in funding could not be explained."

Stiefel said it was worth noting that for federal Title I funding, which is targeted to schools serving poor students, the factors account for 61% of variation in spending. "As you would expect, Title I money more closely follows identifiable student needs."

Surprisingly, a negative relationship emerged between City and state funding and free lunch eligibility in elementary schools. "We found that those schools with higher percentages of poor students-those eligible for free lunch-tended to receive less funding on average," Stiefel said.

In addition to redressing these inequities, FSF also seeks to break away from "position" budgeting, in which teacher positions, rather than dollar amounts, are allocated to schools. Position budgeting has the effect of giving more money to schools with more experienced and higher paid teachers, who, due to teacher choices on where to teach and where to stay, are more concentrated in schools with higher-performing and easier to educate students.

"We expect to see stronger, positive relationships between school funding and the needs of the schools as a result of FSF," Stiefel said.