A decision by Mayor Bloomberg not to cut some schools’ budgets has meant that 693 schools are not receiving a full funding allotment, according to a report the Independent Budget Office is releasing today.

Instead, the city is paying $237 million to keep schools it has designated as “over-funded” above their fair share, while under-funded schools, or those that poor students are more likely to attend, are down $122 million, the report says.

The discrepancies come after the city rolled out a plan called Fair Student Funding, which aimed to adjust for historic inequities between schools by designing a formula to base funding solely on factors such as poverty and poor academic achievement.

Fully implementing the plan would have meant cutting back from the 661 schools whose budgets were above the amount called for by the new formula. But those schools were “held harmless,” or left alone, following protests by a coalition including the president of the teachers union, Randi Weingarten, who had threatened to support a large parent rally if those schools’ budgets were cut.

One school would have lost $2.5 million in the redistribution. The average loss would have been $358,332, according to the report.

At the time, Mr. Bloomberg said implementing the formula gradually had always been the plan, following the example of school systems across the country.

A spokeswoman for the Department of Education, Debra Wexler, said the city did not cut over-funded schools’ budgets in order to preserve “the stability of schools citywide, thanks to support and input from parents, educators, and community leaders.” The city plans to bring under-funded schools to their full allotment by next fall, she said.
Schools designated under-funded have received $110 million in extra funds so far, an average of $217 a student, the IBO report found.

Joseph Williams, the executive director of a political action committee, Democrats for Education Reform, said the remaining gap highlights the “pathetic” consequences of a political compromise.

“We not only intentionally designed a system that disproportionately hurts disadvantaged kids, but we intentionally put the brakes on a plan to fix it,” he said.

Leonie Haimson, the executive director of a nonprofit organization that pushes for smaller class sizes, Class Size Matters, criticized the notion of cutting funds from so-called over-funded schools. Though those schools have lower poverty rates on average, the rates are still high, she pointed out.

In under-funded schools, 68% of students were “in poverty” in 2006, compared to 60.5% in over-funded schools, the report said.