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

1. Financing K-12 Education in the Bloomberg Years, 2002-2008 Leanna Stiefel and Amy Ellen Schwartz IESP, 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 Jaucourtfor excellent research assistance

2. Key Questions • How 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?

3. Outline • Examine 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

4. NYC saw steady increase in total revenues pp and passed NYS average by 2006NYC (2008): $19,075 NYS (2008): $18,374

5. 2002-2008NYC’s revenue pp increased by $5,785 Rest 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

6. NYC: Expenditures pp for classroom grew slowestTotal (‘08)= $17,696 Direct = $15,498 Classroom = $8,734

7. Eight of the 100 largest school districts spent over $15,000 PP in 2007

8. Did NYC’s increased spending 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?

9. NYC schools, 2002-2008 • Share 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

10. Significant changes in teacher salaries2002-2008 • Teacher 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

11. Across Schools in NYCUnder FSF, NYCDOE proposed budget weights based on student characteristics

12. Changes in direct expenditures across schools: Were FSF “factors” emphasized?Yes, some… • Increased weights for low performance across all school levels • Also on special education in elementary and middle schools

13. Weights on FSF factors more significant for classroom spending (particularly in elementary schools)

14. Higher poverty schools had larger changes in spending PP

15. Lower “class sizes” but similar average salary in high poverty schools

16. Bottom line on Distributions Across Schools • 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

17. What about private 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

18. The Fund for Public Schools (FPS) • Responsible for facilitating private-public partnerships and soliciting philanthropic funding • 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

19. Private funds also sometimes flow through intermediary organizations

20. Private dollars comprise a relatively small share of the direct spending on education in NYC.

21. Key findings • Since 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

22. Lessons for the future • Real 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

23. Lessons for other districts • NYC 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