This Weekly Reader is about money. The best educational leaders I know always ask two questions when making decisions: the first is “what does it mean for kids?” and the second is “what does it mean for taxpayers?” In my view, taking care of student learning and being good stewards of taxpayer dollars are the two primary responsibilities of educational leaders. I’ve written a lot about student learning over the past several months, so I thought I’d talk a little bit this week about taxpayers’ money, and how it makes its way to the DOE.
New York City has the largest K-12 education budget in the country. For 2007, the approved budget is around $15.5 billion, excluding certain pension and debt service costs. Overall, about 40% of DOE funds are received from New York City, 45% from New York State, and 14% from the Federal government (the remaining 1% of the budget primarily comes from private funds). By comparison, in 2004-2005 Los Angeles funded 18% of its education budget with city funds, Chicago 42%, and Houston 82%.
The vast majority of the DOE’s budget directly supports schools. Over two-thirds of the budget is spent on direct classroom instruction, another 10% on instructional leadership and support, and another 14% on ancillary student and building services. The remaining 12% of the budget is spent on district and central administrative services and other disparate items. As I pointed out in a previous Weekly Reader, the DOE is a leader among large cities in getting education dollars into the classroom.
The DOE publishes a “Statement of Net Assets” which is in some ways like a corporate balance sheet or personal financial statement. We report almost $14 billion in assets, over 80% of which are in buildings and land. The DOE has just under $4 billion in liabilities, primarily from accrued expenditures, including vacation, sick leave, and judgments. Net assets (total assets minus liabilities) are approximately $10 billion.
In short, we have stewardship of a very big chunk of our tax dollars. For more information about the budget and spending for New York City Schools, including the entire approved budget, go to:
Being good stewards, generally, of $15.5 billion is a big task. Another big task, however, is fairly allocating resources to individual schools. Right now school budgets are very much in the news, as we move forward with Fair Student Funding. Here’s how the Chancellor explains it:
"Today, we send money to schools under 90 separate funding formulas. What is worse, the biggest pots of money follow the weakest logic. They are distributed largely based on historical patterns. That means they carry forward decisions made based on long-ago political deals, not the current needs of our kids.And the results are plain to see. Take two schools with similar enrollments, about 550 kids. They’ve both got high poverty rates, over 80%. One school gets about $5500 per student in general education tax dollars. The other school gets about $3500. That means one school gets $1 million more in general tax dollars than the other. And there is no good reason for it.This is not about rich versus poor, Brooklyn versus the Bronx. This is about senseless disadvantages that strike every community and every corner of our great city. The status quo isn’t fair to the kids at the schools that end up with fewer teachers or programs, or both. The status quo also undermines our accountability system, where too often we hear officials excusing their low performance based on money—even though money may have nothing to do with it.
Instead of proliferating an unjust and unfair status quo, we propose a simple reform called Fair Student Funding. And it is really simple. From here on out, we’re going to fund the people who matter most. We’re going to fund the kids.At every school, every student will carry a base level of tax levy funding based on grade level. Then, on top of that, we’ll offer additional funds to kids who cost more to educate based on their unique characteristics: because they are poor, learning English, performing poorly, or in certain specialized schools, like our testing high schools. So a 7th grader might carry $3500, plus an extra $300 if she is poor, and an extra $1000 if she reads poorly on the day she entered middle school. So under fair student funding, two schools with the same mixes of kids will get the same amounts of city tax dollars. (In addition, they’ll also continue to get federal and state categorical dollars, like Title I, as they had before) It is so simple that we’ll eventually be able to explain to principals most of their budgets on one clean page. Simplicity and fairness are virtues, but they are both means to our ultimate end: student achievement. Our new approach does so:
· By taking away the excuse that unfair funding has forced low achievement,
· By building in incentives for schools that succeed in helping our lowest performing students; and
· By laying the foundation for greater parental choice among our public schools in the future.
Fair student funding is an exciting vision, but it is also a vision we will achieve one step at a time. We are going to implement it gradually and flexibly, over a period of several years. We are going to avoid drastic swings and do this in a way that protects the important programs in all of our schools. And we are going to move forward with the benefit of the views of parents teachers and other stakeholders. Starting next week we will be initiating an extensive schedule of community engagement through which I have no doubt that this initiative will be refined and improved.
Continue to watch the DOE website for updates on this and our other Children First Initiatives. And please send me your ideas for Weekly Reader topics. As every teacher knows, the best way learn about something is to have to explain it. Many thanks this week to my financial colleagues here for teaching me about the budget.