Education officials and advocates say it’s time to rethink the per-pupil formula New York City has used to determine the bulk of school funding for the past 15 years, as city schools face budget cuts due to declining enrollment.

Chancellor David Banks has promised to convene a task force to overhaul the formula, which education department officials said will kick off in “the next several weeks.” It will be composed of parents, education department staff, and members of the Panel for Education Policy – the school system’s oversight body – among others, a department spokesperson said.

The move comes as city leaders have pushed back against the department’s budget cuts. It will also be the second time a task force has tried to tackle the formula’s inequities in as many mayoral administrations, following efforts under former Mayor Bill de Blasio to make the system fairer for English-language learners, those in special education classes, and low-income students.

This week, Mayor Eric Adams acknowledged flaws in the funding formula, but instead of focusing on the city’s role in shaping Fair Student Funding, he said he is asking state lawmakers to increase the funding for city schools – although the state did just boost education funding substantially last year, with that funding ramping up over the next three years.

“We’re not getting our fair share coming from the state,” he said at a press conference on Thursday. “We’ve been denied for years … and we need help from them to increase the amount.”

The city is home to roughly 1,600 public schools, and for each, the majority of their individual funding is determined by what’s called the Fair Student Funding formula, which is made up of a combination of state and city funds. Principals can decide how best to use it.

The city, not the state, controls the formula, which was developed in 2007-8 during the Bloomberg Administration by then-Chancellor Joel Klein as a way to take the special needs of certain school populations into account.

Alongside enrollment, the algorithm provides additional funds for certain groups, by grade level, the number of students who are English Language Learners (ELLs), the number of students in special education, the number of students in need of academic intervention and other factors.

“The intent behind Fair Student Funding was to direct money to schools based on enrollment and student need and then give principals discretion over how they spend their funds,” said Ana Champeny, vice president of research at the Citizens Budget Commission.

Prior to establishing the formula, according to George Sweeting, acting director of the city’s Independent Budget Office, the city had doled out lump sums to districts within the five boroughs for superintendents to distribute, but he said that approach created its own disparities.

“The DOE did an analysis across schools that found that there was a lot of variability between the number of teachers per student and there was no relationship between poverty and funding,” Sweeting said. “You were winding up with some schools with poverty ending up with very low per capita spending, and other schools getting very high per capita allocations even if you didn’t see much poverty.”

“This matrix has led to larger class sizes when schools face budget constraints."

Comptroller Brad Lander

For nearly two decades, the primary problem with the Fair Student Funding formula was that many schools did not receive their full allocation – which city officials said was because the state had not delivered its total share of funding that had been mandated under a court case from the early 2000s.

Then, starting last year, the new Democratic majority in Albany began phasing in the state’s obligation, and the city distributed additional money so that all schools receive 100% of their allotment under the formula.

But critics argue the formula has other flaws. They say it still does not set aside sufficient resources to adequately serve groups it identifies as needing additional support, and that tying funding to individual students can make it difficult to meet mandates since the number of students each year does not always fully cover the cost of a teacher.

For example, some special education students are legally entitled to be placed in classes of no more than 12 students – resulting in a student-to-teacher ratio of 12-1. However, schools often have between 12 and 24 of those students – more than fit in one class, but not enough for a second – forcing principals to either pay for an additional teacher without sufficient funds provided under the formula, or place students in larger classes.

“If you need to be in a 12-1 class, it should be provided to you,” said Jenn Choi, a consultant who supports parents navigating special education.

The de Blasio administration formed its own task force on Fair Student Funding in 2019. The group met regularly through the end of that year, but the administration never published the task force’s recommendations.

“Putting it out would have been admitting the problem,” said NeQuan McLean, a Community Education Council president and member of the task force.

Instead, a group of education advocates, including McLean, made the recommendations public in 2021. In addition to calling for more funding for students learning English and those in special education, the task force also argued that the city should allocate additional dollars for the roughly 100,000 students in the school system who live in temporary housing, and the nearly 8,000 students in foster care.

It also called for an increased investment for schools where many students are in poverty, and for all high schools, as opposed to the existing boost in funding that’s currently provided for specialized and selective schools. And it recommended increasing the base funding for all schools so that each is budgeted for a social worker, assistant principal, secretary and library, among other positions.

Now, advocates want the city to follow those recommendations and pressure to overhaul the system is mounting within the ranks of the city’s elected officials.

Council Speaker Adrienne Adams, who has railed against the recent budget cuts alongside a majority of her colleagues, is pushing for reform.

"The policy is dysfunctional. It's been proven year after year and if nothing is done with regard to the DOE policy then the same things are going to continue to happen,” she said at a press conference on Thursday.

The formula must be approved annually, and In April, the Panel for Education Policy took an unprecedented step by voting against it – a move education department officials said delayed principals receiving their individual school budgets.

This year’s formula was finally approved in May following hours of testimony from parents and advocates criticizing the model. Banks said he agreed that improvements are necessary.

“This is a system I inherited but I’m fully committed to fixing it,” he said at the meeting.

Schools Chancellor David Banks and Mayor Eric Adams

Schools Chancellor David Banks and Mayor Eric Adams

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Schools Chancellor David Banks and Mayor Eric Adams
Michael Appleton/Mayoral Photography Office

Fulfilling the previous task force’s recommendations would likely require a major increase in school funding overall at a time when students have been leaving the system and schools are under pressure to spend less.

“What is missing is a clear sense of how,” said Champeny of the budget commission. “If you want to increase funding going directly to schools, you have to identify how to pay for it” – either from within the education department’s overall budget or from other city agencies.

The Adams administration has already cut school budgets to reflect declining enrollment – a $215 million reduction in funding, according to the education department, though city Comptroller Brad Lander has said the total amount is closer to $469 million – and Banks has warned that schools risk falling off a financial cliff when federal stimulus funding that has cushioned their budgets in recent years runs out. Officials have already required schools to reduce their budgets to reflect declining enrollment.

“This matrix has led to larger class sizes when schools face budget constraints,” Lander said in a statement to Gothamist. “ We need to conduct an analysis of [Fair Student Funding] and develop a plan that addresses declining enrollment across the city in a way that does not increase class sizes or eliminate essential programming and supports for students."

An economic downturn could also mean less funding is available for city services, including education. “There’s a lot of uncertainty going forward,” said Sarita Subramanian, assistant director at the city’s Independent Budget Office.

Critics of the formula said urgent action is needed: Any cuts schools face are exacerbated by its flaws.

"The DOE’s rejection of recommendations to fund schools fairly just means that the schools with the greatest need will be hit the hardest,” McLean said.