Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods i

Student Based Budgeting

Concentrates Low Budget
Schools in Chicago’s Black
Neighborhoods

September 23, 2019

Stephanie Farmer, PhD
Associate Professor
Sociology
Roosevelt University

Ashley Baber
PhD Candidate
Loyola University Chicago

PROJECT FOR MIDDLE CLASS RENEWAL

Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods ii

ABOUT THE PROJECT FOR MIDDLE CLASS RENEWAL

The Project for Middle Class Renewal’s mission is to investigate the working conditions of workers in
today’s economy and elevate public discourse on issues affecting workers with research, analysis and
education in order to develop and propose public policies that will reduce poverty, provide forms of
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PROJECT FOR MIDDLE CLASS RENEWAL

Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods iii

EXECUTIVE SUMMARY

This report examines how Chicago Public Schools (CPS) school funding system, Student Based Budgeting,
contributes to racial inequality by concentrating the most resource starved schools almost exclusively in
Chicago’s Black neighborhoods.
Our findings show:
• Low budget schools are concentrated on the South and West Sides of the city while high budget
schools are clustered on the North and Southwest Sides.
• Areas with low and high budget school clusters have a similar percentage of school-age population.
• Charter schools overlap where low budget schools are clustered.
• Low budget schools are clustered in Black neighborhoods experiencing distress from low incomes
and unaffordable housing.
In order to deliver a high-quality education for all of Chicago’s children, CPS should end Student Based
Budgeting. CPS central office should fully staff schools and provide wrap-around services.
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 1

In 2014, Chicago Public Schools (CPS) adopted a Under the new Student Based Budgeting model,
system-wide Student Based Budgeting model for CBOE ended the automatic allocation. Instead,
determining individual school budgets. Our schools would receive a stipend based on per
report examines the impact of Student Based student headcounts. Central office would continue
Budgeting. Our findings show that CPS’ to cover the cost of the principal, one clerk and
putatively color-blind Student Based Budgeting one counselor but automatic funding for eight
reproduces racial inequality by concentrating low school positions was eliminated. Principals had to
budget public schools almost exclusively in use individual school stipends to pay for teacher
Chicago’s Black neighborhoods. The clustering salaries, educational professionals, and staff
of low budget schools in low-income Black positions.
neighborhoods adds another layer of hardship in
SBB fundamentally remade the approach to
neighborhoods experiencing distress from
funding public schools. SBB is akin to a business
depopulation, low incomes, and unaffordable
model of financing public schools because funds
housing.
are based on student-consumer demand and travel
BACKGROUND with the student-consumer to the school of their
choice. In contrast to the old public good approach
Since the 1990s, the Chicago Board of Education to financing public schools that ensured a baseline
(CBOE) has adopted various reforms to make of education professionals in each school.
Chicago Public Schools (CPS) work more like a
business than a public good. CBOE’s school Advocates of SBB claim it is the most equitable
choice reform of the early 2000s created a way to fund schools. Each child receives the same
marketplace of schools by closing neighborhood amount of money regardless of which school
public schools to make way for new types of she/he attended within CPS. Advocates of SBB
schools, many of which were privatized charter claim that it is a more efficient way to fund
schools. Between 2000 and 2015, CPS closed 125 schools because the central office will no longer
schools, turned-around 42 schools, and opened waste money on low performing schools that
108 new charter schools and 41 new public children no longer want to attend. Finally,
schools. 1 Nearly 90% of disruptive school actions decentralizing budgeting responsibilities down to
during this period impacted Black principals gives school administrators who are
neighborhoods. 2 closest to the ground more autonomy to determine
the staffing and programmatic priorities (arts,
Under its next business-mimicking reform, the music, foreign language, etc) of individual
Chicago Board of Education changed the way schools. 4
individual schools would be funded from an
automatic allocation to a Student Based Critics of SBB are concerned that it treats every
Budgeting (SBB) model in 2014. The previous kid the same, regardless of income level. Low-
model of school funding functioned more like a income students have greater needs than their
quota system, where CPS central office provided more affluent counterparts, and SBB provides
each school an automatic allocation of teachers, inadequate resources to meet those needs. Critics
school professionals, and staff positions. 3 The are also concerned that SBB forces low enrolled
cost of these professionals was covered by the schools to cut their programs, enriching classes,
central office, and not individual school budgets. teachers and support staff (like counselors, clerks,
This guaranteed that every school would have a and assistant principals) to compensate for the
baseline of education professionals needed to loss of monetary support. The diminished
operate the school. learning environment pushes parents to seek out
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 2

other school options, and thereby is a backdoor budget schools, or vice versa (Low outlier and
way to eliminate public schools from the High outlier). 8
competitive school market. 5
Out of the four possible significant outcomes
Our research shows that SBB ignores the (High-high, Low-low, High outlier and Low
unevenness of neighborhood distress, which outlier), our research focuses on 1) Low-low
contributes to declining enrollments. Declining clusters, where schools with low budgets are
school enrollments are not just a result of student- surrounded by other schools with low budgets;
consumers choosing the best school-product. and 2) High-high clusters, where schools with
Instead, neighborhood factors external to what high budgets are surrounded by other schools with
happens inside schools can also lead to low high budgets. We then compare Low and High
enrollments that go on to impact school budgets. clusters with census tract data on common
indicators of neighborhood distress: median
Many lower-income and predominantly Black
income and rent-cost burden.
neighborhoods are experiencing distress caused
by: a low wage labor market and poverty; cuts to
the public sector (i.e. public housing and school FINDING 1: LOW BUDGET SCHOOLS ARE
closures); displacement caused by gentrification CLUSTERED ON THE SOUTH AND WEST
and growing housing unaffordability; and crime SIDES. HIGH BUDGET SCHOOLS ARE
coupled with racially motivated policing. These CLUSTERED ON THE NORTH AND
factors form the context in which approximately SOUTHWEST SIDES
250,000 Black people have moved out of Chicago
between 2000 and 2016, according to U.S. Census
data.

RESEARCH METHODS

Using Chicago Public Schools we mapped the

location of low budget schools and high budget
schools across Chicago for the 2016 school year. 6
We use the Local Moran’s I statistic to identify
the locations of high and low Student Based
Budget values across Chicago. The Local
Moran’s I statistic takes all the values in the study,
in this case all CPS school Student Based Budgets
compared to the mean budget amount for all CPS
schools (mean = $2,827,040). 7 Then, the Local
Moran’s I compares each individual school value
to all the schools in the surrounding geographic
location to determine if there is a cluster of high
budget schools which are above the mean (High-
high) or a cluster of low budget schools which are
below the mean (Low-low), or if there are outliers Figure 1 shows the statistically significant clusters
such as low budgets schools surrounded by high of SBB across Chicago. High budget clusters are
indicated by black dots and are evident on the
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 3

north side and south-west side of the city. Low The concentration of high budget schools in
budget clusters are indicated in white and are Latinx communities makes sense in light of the
evident on the south and west sides of the city. growth in student population in these
These spatial clustering of points indicate schools neighborhoods (see Figure 3). However, as our
which are located near other schools with similar next map reveals, student growth is not as robust
budgets, either high or low, compared to the in White neighborhoods.
distribution of budgets across Chicago.

FINDING 2: AREAS WITH LOW AND

HIGH BUDGET CLUSTERS HAVE
SIMILAR PERCENTAGE OF SCHOOL-
AGE POPULATION.

Since Student Based Budgets are

necessarily associated with school-aged
population, Figure 3 shows the clusters of Student
Based Budgets against the percentage of school-
aged children by census tract. The dark grey areas
show census tracts that have a higher percentage
of school-aged children, medium grey shows
tracts that have an average percentage of school-
aged children and the lightest grey shows lower
than average school aged children compared to
the city of Chicago. The dispersion of school-aged
children reveals that there are fewer children

Figure 2 shows the spatial distribution of children

under 15 population 9 by race and ethnicity. Each
dot represents 50 children aged 15 and under.
Dark grey, black and light grey dots represent
Black, White, and Latinx children, respectively.
Black school aged populations are concentrated
on the south and west sides of the city.
Concentrations of Latinx school aged population
occur on the northwest and southwest sides of the
city. Concentrations of White school aged
children are in the central and north areas of
Chicago. When comparing Figure 1 and Figure 2,
the clusters of low budgets overlap with
concentrations of Black school aged population.
Comparatively, the clusters of high budgets
overlap with the concentrations of White and
Latinx neighborhoods.
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 4

under 18 in the central area, and in the north and to the proliferation of charter schools in Black
south sides of the city, where White and Black neighborhoods.
residents live, respectively.
Figure 4 shows the location of charter schools
There is no clear overlap between where children from 2000 to 2015 compared with where high and
live and where high and low budget schools are low budget schools cluster. The concentration of
clustered. The school-aged percentage for high schools with low budgets is more likely to overlap
budget census tracts is just under 7 percent. Low with the concentration of charter schools on the
budget tracts have a similar school-aged south side. Figure 4 demonstrates how charter
percentage of about 5.8 percent. Therefore, the school proliferation interacts with Student Based
unevenness of SBB across the city cannot be Budgeting to concentrate low funded schools in
simply attributed to changes in school-age Black neighborhoods.
population.

FINDING 4: LOW BUDGET SCHOOLS ARE

FINDING 3: CHARTER SCHOOL CLUSTERED IN BLACK NEIGHBORHOODS
LOCATIONS SOMEWHAT OVERLAP EXPERIENCING DISTRESS.
WITH LOW BUDGET CLUSTERS.
Across Chicago, racial segregation overlaps with
One of the key factors that explain how it is that indicators of neighborhood distress. To examine
relatively affluent areas with declining student levels of neighborhood distress compared to
populations do not have as strong of a SBBs we map median household income and
concentration of low budget schools as we find in percent rent cost burdened by census tract and
lower-income Black neighborhoods is in part due compared to racial segregation. Figure 5 shows
the percentage Black population mapped with
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 5

budget clusters. The cluster of schools with low Taken together, figures 5, 6 and 7 findings suggest
budgets are located in census tracts with a median that the areas that have clustering of low school
of 95% Black population. Whereas the census budgets more likely occur in Chicago’s
tracts with clusters of high budget schools has a disadvantaged neighborhoods. In sum,
median of 2% black population. neighborhoods with clusters of high budget
schools have a higher median income of about
Figure 6 shows the median household income by
$55,000, a lower RCB of about 46% and a low
census tract. The lighter the grey, the lower the
Black population (about 2%). In contrast,
median household income for the area. The
neighborhoods with a concentration of low school
median household income for census tracts where
budgets have a much higher rent cost burden
low budgets are clustered is $35,089 compared to
percentage of 57%, a lower median household
just over $55,000 where high budgets are
income of about $35,000 and are over 95% Black.
clustered.
Finally, figure 7 shows the percentage rent cost
CONCLUSION
burden (RCB) – households that pay more than
30% of their income toward rent - by census tract. Starved school budgets due to enrollment based
Darker areas show higher rent cost burden, budgeting forces schools in distressed
whereas lighter areas show a lower percentage neighborhoods to make hard choices. Instead of
RCB. The pattern here is similar across all three giving schools the “freedom to flourish” SBB sets
maps showing how neighborhood distress up schools for the “freedom to fail”. Austerity
interacts with racial segregation. Low school budgets have serious consequences for the daily
budgets are clustered in areas with a higher operation of schools. Classrooms are
percentage of RCB compared to the high school overcrowded, where there are over 40 students in
budget clusters. elementary classrooms, because there is not
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 6

enough money in the budget to reduce class size children. This approach calls for CPS central
by hiring additional teachers. 10 Small schools are office to fully staff, provide wrap-around services
also forced to pare down their curriculum to the and hire enough teachers for all schools.
bare bones and cut enriching programs like in the
.
arts, foreign languages, and training in
professional trades.
Many low budget schools are concentrated in the
neighborhoods that also have the highest levels of
student mobility rates, where students move from
one school to another due to factors like evictions
or homelessness. 11 Schools with starved budgets
are unable to provide institutional supports for
these students.
Small schools have more teaching and staff
vacancies and high staff turnover, as budgets cuts
and disruptions can make schools difficult places
to work. 12 Without a teacher in the room, some
students are forced to sit idle until their next class
period. 13 Small schools also have a higher
percentage of inexperienced teachers, because
teachers with more experience receive higher
salaries, and are more expensive for low budget
schools to hire. Under the previous funding
system, teacher salaries were covered by the
central office which more evenly distributed
experienced teachers across CPS schools relative
to the SBB model.
Rather than introducing more funding equity into
CPS by treating all students the same without
regard to the concrete details in which they live,
CPS’ putatively color-blind Student Based
Budgeting reproduces racial inequality by
concentrating the most resource starved schools
almost exclusively in Chicago’s Black
neighborhoods. Making Black families choose
between one underfunded school and another
underfunded school in their neighborhoods is not
a choice. It is the way that racial inequality is
reproduced.
SBB is unable to deliver a high-quality education
for all of Chicago’s children. A public good
approach to education is the best way to
accomplish education equity for all Chicago’s
Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods 8

1
Stephanie Farmer, Ashley Baber and Chris Poulos (2019) “Challenging the Market Logic of School Choice: A
Spatial Analysis of Charter School Expansion in Chicago, IL.” Journal of Urban Affairs.
2
Rachel Weber, Stephanie Farmer, and Mary Donoghue. (2018). “Predicting School Closures in an Era of
Austerity: The Case of Chicago.” Urban Affairs Review.
3
Teaching positions were allocated based on one teacher for every 28 students.
4
See for example: Roza, Marguerite and Suzanne Simburg. (2013) “Student-Based Allocation to Enable School
Choice.” Center on Reinventing Public Education. University of Washington. Seattle, WA.; Koteskey, Tyler.
(2015, Sept 18). “Student-Based Budgeting has helped Chicago; CPS budget bungling is the real problem.”
Reason Foundation.
5
Lewis, Karen. 2017. “Chicago Teachers Union to school board: Emanuel-approved budget sets stage for mass
closings of Black and Latinx schools.” October 10. Chicago Teachers Union.
6
Of CPS’ 661 schools in the 2016, 48 schools were excluded from analysis. 26 of those are alternative schools
that have a different budgeting process. The remaining 22 schools were missing data. While we acknowledge
that this is a limitation of the data, the school locations were dispersed throughout the city and therefore did not
impact the analysis.
7
Anselin, Luc. 1995. “Local indicators of spatial association-LISA.” Geographical Analysis, 27: 93-115.
8
Clusters of high-high and low-low budgets are statistically significant with a p value < 0.05
9
This data comes from the LTDB database and only has age data by race for 15 and under.
10
Parents 4 Teachers. Analysis of CPS class size 2018-2019;
https://d3n8a8pro7vhmx.cloudfront.net/parents4teachersnet/mailings/1162/attachments/original/Class_size_repo
rt_2018_-_2019.pdf?1548209957
11
. Matt Masterson. Sept 5, 2019. “Aldermen, Advocates Want City Tax to Support Homeless Students,
Families.” WTTW. https://news.wttw.com/2019/09/05/aldermen-advocates-want-city-tax-support-homeless-
students-families
12
Adeshina Emmanuel. July 30, 2019. “Teacher turnover hits high-poverty schools particularly hard.”
Chalkbeat. https://chalkbeat.org/posts/chicago/2019/07/30/teacher-turnover-hits-high-poverty-schools-
particularly-hard-heres-how-chicago-plans-to-keep-more-educators/
13
Sarah Karp and Paula Friedrich. Aug 4, 2019. “Does Your CPS School Have Trouble Finding Teachers And
Subs?” WBEZ. https://www.wbez.org/shows/wbez-news/does-your-cps-school-have-trouble-finding-teachers-
and-subs/a86b8b8d-e156-4ff9-bdb1-2c777b86b565