FY27 investments direct more funding to Black and Latinx students and those from low-income backgrounds, but the class size law continues to tie funding to enrollment targets rather than student need. 

NEW YORK, NY — EdTrust-New York’s new analysis, “NYC Makes More Equitable Class Size Funding Decisions but Faces Long-Term Equity Risks,” finds that New York City improved the equity of its FY27 class size reduction funding by allocating more resources to schools with the greatest needs. At the same time, larger enrollments led the City to allocate higher average funding per school to schools with lower-poverty, creating ongoing equity challenges as New York City implements the state’s class size reduction law. During the 2025-26 school year, New York City brought approximately 64% of classes into compliance with the law. The Legislature extended the full-implementation deadline from 2028 to 2030, giving the City additional time to address workforce, facilities, and fiscal challenges. 

“This year’s funding decisions demonstrate what policymakers can achieve when they have the flexibility to prioritize students with the greatest needs,” said Arlen Benjamin-Gomez, Executive Director at EdTrust-New York.  “By slowing implementation, New York City was able to make more equitable investments. But unless lawmakers refine the law, the remaining path to full compliance will increasingly steer funding toward lower-need schools simply because those schools have farther to go to meet class size reduction requirements.” 

FY27 Funding Directs More Resources to Students with Greater Need 

EdTrust-New York’s analysis of the FY27 School Allocation Memorandum (SAM) shows that New York City significantly shifted its funding approach from last year. In FY26, the city allocated approximately $200 less per student to schools serving the highest concentrations of Black and Latinx students and approximately $150 less per student to the highest-poverty schools. 

In FY27, New York City’s funding formula now prioritizes student need: 

• Schools with poverty rates above 90% receive the largest share of class size reduction funding–more than $110 million of the $284 million total allocation.  

• Schools where Latinx students are the largest student group receive approximately $198.5 million–nearly 70% of the total allocation.  

• Schools where Black and Latinx students represent the largest student group receive approximately $1,560 per student, compared with $1,137 per student where Asian students are the largest group and $1,075 per student at schools where White students are the largest group. 

• The Bronx will receive the largest share, at nearly $106 million, followed by Brooklyn, $83 million–about two-thirds of the $284 million allocation compared with $54 million for Queens, $33 million for Manhattan and $8 million for Staten Island.  

Larger Schools Still Receive More Total Funding 

Although FY27 funding better reflects student need, both in dollars per student and in how much of the total funding each group receives, EdTrust-New York finds that total average allocations per school still favor larger schools with lower concentrated needs. This is because those schools historically maintain larger class sizes, due to high demand, and require the most funding to hire additional teachers or invest in more classroom space. 

FY27 allocations show: 

• Schools where White and Asian students represent the largest student group receive approximately $1.07 million per school on average, compared with approximately $755,000 per school for schools where Black and Latinx students represent the largest student group. 
• Schools with the lowest poverty rates receive more than $1.1 million per school on average, while schools with the highest poverty rates receive approximately $665,000 per school. 

This means a smaller school serving a higher concentration of Black and Latinx students, and those from low-income backgrounds, may receive less total funding than a larger school with less Black and Latinx students, and less concentrations of students from low-income backgrounds.  

Policymakers Must Protect Equity in the Next Phase of Implementation 

EdTrust-New York’s analysis finds that the Legislature’s decision to slow implementation gave New York City the flexibility to allocate FY27 class size funding more equitably to schools serving students with the greatest needs. However, EdTrust-New York warns that the law’s current design could undermine those gains over time. 

EdTrust-New York identifies several factors that could make this challenge more pronounced: 

• High school implementation: The City will need to make significant investments in high schools, where research shows class size reductions produce smaller academic benefits than in early grades. 

• Facilities—not just staffing: According to the City’s class size reduction plan released in June, they must address space constraints affecting more than 600 schools through long-term capital investments and strategic planning to site schools effectively. 

• Teacher hiring and classroom planning: The City must continue recruiting and retaining teachers to meet class size goals, while addressing classroom configurations and scheduling to achieve full compliance with the law. 

EdTrust-New York urges policymakers to use the extended timeline to prevent unintended inequities. They should direct future investments towards schools serving the highest concentrations of Black, Latinx, multilingual and students from low-income backgrounds rather than 100% compliance targets alone. Policymakers should align high school implementation with research by focusing on core academic needs and reassessing whether the grades 9-12 cap reflects the strongest evidence. They should also develop a capital facilities strategy that builds equity into classroom capacity planning, ensuring that new construction does not disproportionately benefit communities with the lowest need. Finally, EdTrust-New York urges state and city leaders to measure success by student outcomes and equity, not simply by the percentage of classes meeting compliance requirements.   

Read the complete analysis HERE 

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About EdTrust-New York 

EdTrust-New York is dedicated to eliminating equity and opportunity gaps that hinder students from reaching their full potential. We focus on ensuring that students of color, including Black, Latinx, Native American, and Asian American and Pacific Islander students, and those from low-income backgrounds achieve high levels of success from early childhood through college. For more information, visit EdTrustNY.org.