What Is in the Overall Budget?

For the school year 2008–09, the Department of Education’s total budget is $21.05 billion, including $3.45 billion to pay pensions and interest on Capital Plan debt. The Department will spend $17.6 billion on the day-to-day operations of the school system.

The Department’s $17.6 billion Operating Budget includes funding for principals, teachers, textbooks and supplies. It covers the cost of standardized tests, after-school programs, school buses, heating and cooling for school buildings, safety, and school lunches. The Operating Budget pays for non-DOE costs, such as $1 billion for special education services provided at non-DOE “contract” schools; another $61 million for non-public schools, such as yeshivas and parochial schools; and $305 million for charter schools. Finally, the Operating Budget pays for central administration and field support offices, which work with schools to provide support and help improve student achievement.

Beyond day-to-day operations, New York City pays annual debt of about $1.35 billion to support the Department’s five-year Capital Plan. The current five year plan includes $13 billion to cover costs associated with building new schools, renovating existing buildings, and investing in other new assets within school buildings. The City also pays $2.1 billion annually for pension costs for DOE employees.

How Are School Budgets Funded?

In the 2008–09 school year, more than $9.4 billion of funding, not including most fringe and pension, will reside on school budgets. Below is a listing of major categories of school allocations. Each allocation is explained more fully in the School Allocation Memoranda (SAM).

Fair Student Funding

This is the allocation methodology for almost $6 billion of schools’ money and makes up approximately 64% of school budgets. This funding covers basic instructional needs and is allocated to each school based on the number and need-level of students at the school. All money allocated through FSF can be used at the principals’ discretion. See Chapter 3 and 4 for additional details.

Note: Schools in District 75 and programs in District 79 will not receive a Fair Student Funding allocation because of their differentiated models. They will continue to be funded under the same approach as previously.

Categorical Allocations:

• State and Federal Categorical programs are restricted by the State or Federal governments on how they can be distributed and, in many cases, how they can be used by schools. They total approximately $2 billion. Examples include Title I – which is almost$700 million– other Title programs, IDEA, UpreK and Attendance Improvement/Dropout Prevention. These programs are listed as Externally Restricted Programs among the SAMs.
• Contracts for Excellence Funds come from the State as a result of their commitment to increase funding to New York City. These funds total approximately $385 million and must be allocated according to the State’s indexing methodology. The funds must also be spent by schools according to the City’s Contract for Excellence with the State.

Programmatic Allocations:

• Programs Not Consolidated includes City initiatives that remain outside of Fair Student Funding because of their unique structure or priority, like the parent coordinator initiative or new school start-up funds. The way these funds can be spent is often restricted. These programs are listed as Internally Resticted Programs among the SAMs.
• Other Special Education Funds pay for mandated special education support that supplements core classroom instruction services. These dollars are in addition to the funds special education students will receive as part of the Fair Student Funding allocation.

Information on Other Funding Streams

Detailed information on each funding stream’s purpose, allocation methodology and spending restriction can be found online on the Department of Budget Operations and Review (DBOR) website under the School Allocation Memorandum (SAM) section.