The Duluth School Board is expected to vote Tuesday on changes to how compensatory education funds are allocated.

Each school generates a certain amount of compensatory education funds based on its population of students taking part in the federal free and reduced-price lunch program. State statute requires the district to keep half of the money allocated to each level - elementary, middle and high school - but can shift the rest around. It has done that to lower class sizes throughout the district.

For example, Denfeld High School generated $735,861 this school year, but the school was allocated $577,918. East High School generated $121,422, but was allocated $474,014.

Changes proposed by board member Nora Sandstad would allow each school to keep 80 percent of its generated compensatory funds, with 40 percent allocated to pay teachers and 40 percent used as discretionary funds, with spending decided by the school.

Superintendent Bill Gronseth said the money for teachers could be used to lower class sizes or individualized instruction, but each school can choose. Sandstad said she would like to see funds used for the latter.

"This isn't about class size issues, it's about compensatory education revenue which is intended for underperforming kids," she said. "It's not intended for class size. That's not what it's for, and that's a presumption that the district has operated under for a decade or more, but that's a false presumption."

The impact

If the board moves forward with this plan it could impact class sizes, district CFO Doug Hasler said.

"Based on this analysis, it shows there would be a reduction in the amount of money that is available to support class-size ratios around the district to the tune of $921,600," he said.

According to Hasler's calculations, it would be a difference of about nine and a half full-time employees. If the plan is approved, the board would be asked to approve an additional $921,600 in cuts during the budget process "to shore the staffing support that is necessary to maintain our current ratios" or allow ratios to increase throughout the district.

During last week's budget update meeting for next year, Hasler included the $921,600 as a deficit in the preliminary budget, which Sandstad and other board members took issue with, saying the money is being moved around, not lost.

"I think that this discussion is important as we frame our budget discussion," Sandstad said. "I think to say before we sit down with the budget that our value is putting an emphasis on students who are underachieving is the best way to approach it. We are going to keep that money with them and we'll figure out how the rest of the budget is going to support that."

Many schools will see a drastic change in allocated compensatory funds. For example, this year Congdon Park Elementary was allocated $460,285. Under the proposed plan, the school would only be allocated $137,792. Lester Park Elementary will also see a cut of nearly $300,000.

School that will see an increase in allocated funds include Laura MacArthur, Myers-Wilkins, Piedmont and Stowe elementaries. Lincoln Park Middle School and Denfeld will see an increase, while Ordean East Middle School and East High School will see a decrease.

A community group came to the board last year with concerns regarding equity issues in the schools, sparking the compensatory education debate.

"I'm ready to vote for an amendment with the anticipation should that cause a significant financial burden on us, we do have a chance to tweak it during our budget process," said board member Alanna Oswald. "I think the community deserves to see us make a commitment, because achievement matters for everyone. What we do know is that there are some schools that achieve less and some achieve more."