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Funds Found Parceled Evenly Among Rich, Poor N.Y.C. Schools

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The first-ever study of how New York City's 32 community school districts and their schools spend their money has disproved the widely held notion in the city that districts and schools serving large numbers of low-income students get less public money than ones with more affluent enrollments.

But the study also reveals that the poor districts use less of their funds for classroom expenses.

The study, which examined districts' budgets and the process by which they are prepared, was conducted by the Educational Priorities Panel to determine whether funds for poor children were being equitably distributed.

The panel is a coalition of civic, service, and advocacy groups that monitors spending in the school system.

Its analyses are based on the first detailed budgets ever released by the central board of education for the community districts and their schools. That information, published in the spring of 1992, and expenditure data released later that year, made it possible, for the first time, for researchers to examine how New York City districts and schools budgeted and spent their money.

"It is just amazing that this is the first time it has ever been available,'' said Robert Berne, the associate dean of the Wagner School of Public Service at New York University, who conducted the budget analysis with his colleague, Leanna Stiefel.

"There's not a 'smoking gun' in the sense of looking for a villain,'' he said of the study's findings. "But it's important to get information out and have people understand how much money is moving around to what part of the system.''

There is also growing interest nationally, sparked in part by continuing shortfalls in school budgets, in examining how education dollars are spent and whether enough money is reaching classrooms. (See Education Week, March 17, 1993.)

Top-Down Budgeting

The examination of the process by which 10 community districts in New York put together their spending plans found that budgeting there remains highly centralized.

Although the city's school system is decentralized, with the 32 community districts managing elementary and middle schools and the central board running the high schools, the districts actually have little leeway in preparing their budgets, the study found.

"At the district level,'' the study by the panel asserts, "budgeting becomes a series of adjustments that respond to directives from the central board of education and the rules and mandates that have been imposed over time by union contracts, state and federal regulations, and judicial requirements.''

Even within the districts, fiscal decisionmaking is centralized, with superintendents and their staffs making most decisions.

While the study found that the overall distribution of general funds was about equal among better-off and poorer districts, there were significant differences in how the money was spent.

Districts received, on average, $2,551 per pupil in general tax money, the study found, plus up to $1,295 in federal and state entitlement money for the poorest districts.

Richer districts were more successful at winning competitive federal grants for magnet schools and other programs than were poor districts.

Districts with large numbers of poor children spent less per pupil for general education at individual schools and more on district offices than did districts with fewer poor students. Schools serving poor children also spent less on such direct educational expenses as teachers, counselors, and paraprofessionals and more money on such indirect services as administration, security guards, and school aides.

"It's not that anything is being done wrong here,'' Mr. Berne said, "as much as it is that they need the nondirect educational services ... that go along with children in poverty.''

Teacher Inequities

School districts also were found to keep more entitlement money than tax-levy money in their central offices. On average, districts kept $131 per pupil from general-education funds for central offices, while they kept $153 from state and federal compensatory money, Mr. Berne said.

Districts are either using the funding to bolster their central offices or are forced by mandates and reporting requirements to use more people to oversee grants, he explained.

"Either way,'' Mr. Berne said, "there should be a way of getting more resources out of the district offices into the schools.''

The study also highlighted one of the most vexing issues in urban education: the concentration of less-seasoned teachers in low-income districts and schools because of transfers and turnover.

Districts with large numbers of poor students employed more teachers, the study found, but paid them substantially less because they have less seniority. Any differences in individual school spending were attributed to teachers' salaries.

In a year when the average salary for the city's elementary and middle school teachers was $41,107, teachers in poor schools earned an average of $4,536 less than teachers in low-poverty districts.

The study also found that middle or junior high schools, especially those serving poor children, received more money per pupil than elementary schools, despite efforts to concentrate resources in the early grades.

The central school board had planned to issue district and school budget data each year, but is now six months late in issuing its second report, said Noreen Connell, the priorities panel's executive director.

"A whole planning cycle has come and gone, and they have not been released,'' she said. "We do want those plans.''

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