Reducing class sizes in the early grades to help improve student performance has become a goal for many school advocates and policy makers in recent years. New York City, which has the largest classes on average in the state, is no exception. The city has been anticipating funding from both the state and federal governments to help it begin to implement class size reduction, but recent events in both arenas have created some anxiety.

Last year, Congress approved funding for the first year of a Clinton Administration proposal to hire 100,000 teachers over seven years, with the goal of eventually reducing class size in grades one to three to an average of 18 nationwide. Although only the first year of the initiative was funded, an agreement was reached to provide a total of $12.4 billion over the seven-year period. For the first year, $1.2 billion was appropriated to pay for 30,000 teachers; those funds were to be made available in July of this year for the 1999/2000 school year. New York City was slated to receive $61 million of those federal funds.

Congress is negotiating a bill known as Ed-Flex, the main purpose of which is to expand pilot programs that offer states flexibility in how they spend some federal funds. Although there is no way of knowing which provisions the bill will ultimately contain, it is important to note that the Senate version of the bill includes an amendment that would allow states to use the existing $1.2 billion appropriation for special education instead of class size reduction.

Even if federal funds for class size reduction remain available in their current form, New York State may not qualify for the $105 million it had expected to receive for the coming school year. As reported in IBO's Analysis of the Mayor's Preliminary Budget for 2000, the Governor's executive budget proposes substituting an Educational Improvement Block Grant-$77 million of which would go to the city-in place of previously dedicated funding for universal prekindergarten, early class size reduction, and minor maintenance. New York City was slated to receive $140 million of those dedicated funds for the three programs.

If dedicated funding from the state is not restored for the class size reduction program, the federal government may conclude that New York State made its cut in anticipation of federal funding. Guidelines for the federal program clearly stipulate that federal funds may only be used to supplement state and local aid and not supplant them. The Governor's office could argue that the federal funds would not be supplanting state funds because the class size reduction program is not yet in existence.