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IBO: City never fully executed its “Fair Student Funding” system

Hardly any city schools are getting the funding that the Department of Education’s own formula says their students need, according to a new report released today by the Independent Budget Office.

The IBO, which is charged with scrutinizing the education department’s data, analyzed the Fair Student Funding mechanism that former Chancellor Joel Klein introduced in 2007. The mechanism was meant to fund schools based on their students’ needs, not their historic funding levels, and eliminate disparities in schools’ funding.

But a series of changes — reflecting political, economic, and pedagogical priorities — meant that the city never fully funded schools according to the formula that determined student need. In the program’s first year, according to the report, 58 percent of schools got less through Fair Student Funding than the full amount the formula said they needed. Last year, that number had risen to 94 percent. (Schools also receive other funds.)

The only way to realize the equity promise of the funding reform is to stop tinkering with the formula, the IBO concludes. From its report:

With 94 percent of schools receiving too little money based on the needs of their students, FSF funding has not been distributed as it was first intended to be. The formula still has a ways to go towards the FSF initiative’s goal of giving adequate funding to all city students through a readily understood and transparent formula. That would require not only more funding through the FSF mechanism, but also an end to post-formula adjustments, including funds previously labeled as hold harmless or incremental funds that distort schools’ allocations.

Several of the candidates who are running to replace Mayor Bloomberg have said they believe the city’s schools need more funding. But whether any would hew to — or abandon — Klein’s Fair Student Funding formula is not clear. Eliminating the “hold harmless” provisions that have stopped schools with many middle-class students and experienced teachers from losing funding, in particular, would be a steep political challenge.

The IBO’s complete analysis, which is perhaps most useful for its concise explanation of the dizzying funding formula and its litany of changes, is below.