When it comes to financial equity among the city’s public schools, the numbers speak for themselves. A Catalyst Chicago investigation into how the district distributed its funds to schools in the fiscal 2005 budget found 27 percent getting more than a fair share, and 19 percent getting less.

Disparities between individual schools were stark—at the bottom of the list, an elementary school where displaced students were a late addition to its rolls, was allocated just over $2,000 for each of its student; at the top, a high school in transition, was slated to get in excess of $16,000 per pupil. The differences are in part due to unique circumstances at these schools, but more telling, and disturbing, are patterns of funding disparities among schools with similar student bodies.

Most significant among our findings: Schools with fewer poor children are budgeted relatively more money. Likewise for schools with selective enrollment. Schools that are large and overcrowded—many of them predominantly Latino—are likely to be underfunded.

Presented with these figures, Chicago Public Schools budget officials concede that they knew such funding discrepancies exist, and explain they’re working on a new budgeting system that will correct many of them. Beginning next fall, all new schools opened under the Renaissance 2010 initiative will be funded on a per-pupil basis, receiving a base-level amount for each student, plus supplemental funds to offset expenses incurred by accommodating students with special needs, enrolling fewer students or leasing space.

Budget Director Pedro Martinez says he’s looking to expand the new system to all schools in a few years. “The simple reason is equity,” he says. He also envisions incentives that would motivate schools to improve their performance—a three-tiered system, where the best schools would get full authority over budgets and spending, and the worst would be heavily managed by central administrators. Schools in the middle would get limited control over their budgets and some central oversight, with a few incentives thrown in to nudge them to do better.

“We need different degrees of freedoms based on school performance and other criteria,” explains Martinez, who belongs to a team of CPS leaders participating in the Public Education Leadership Project, a three-year joint research effort with The Harvard Graduate School of Education, Harvard Business School and eight other urban districts.

Working with these experts and colleagues who are further along than Chicago is bound to help, the transition to a new funding system no doubt will be difficult. As Martinez notes, per-pupil funding has never been implemented in a district as large as CPS. Districts a fraction of Chicago’s size have struggled to overcome resistance from schools that stand to lose money, and to equitably carve an ever-shrinking pie of resources.

Still, the new system will be worth it in the long run. It will rid the district of shrouded budget practices and replace them with a system that spreads district dollars more fairly. Cautious supporters, rightly, are concerned about how CPS will foot the bill for the healthy new schools base funding—$5,000 for elementary schools; $6,000 for high schools—and whether it can afford to expand. (“We will take a small hit,” says Martinez.)

But the effort is a huge step toward giving schools the flexibility and freedom they need to better serve the educational needs of their students.

GRANT PICK 1947-2005 As many of you know, Grant Pick, a longtime Catalyst contributor and friend, died suddenly of a heart attack on Feb. 1. He was 57. Among the many stories he penned for this magazine were captivating profiles of the last two schools CEOs, Paul Vallas and Arne Duncan, and a prescient piece on an award-winning principal, Barbara Eason Watkins, who later ascended to the district’s No. 2 spot. Grant was a masterful journalist who treated all whom he interviewed with respect. We will miss him.

Veronica Anderson

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