After years of failed attempts, Rhode Island finally has a statewide school-financing formula, its first in two decades.

The complex formula, which was developed by the state Department of Education and researchers at Brown University, goes into effect for the 2011-12 school year and is intended to redistribute about $705 million a year in direct aid to school districts, charter and state-operated schools — without adding a lot of new money to the system.

Critics have been quick to point out that the formula creates a new system of winners and losers, giving more state aid to districts where student enrollments have increased or that serve high numbers of low-income students, while cutting districts that have lost students or serve fewer poor students.

Most urban districts benefit from the new formula. But so do Barrington and East Greenwich, two of the state’s wealthiest communities, largely because of increases in enrollments.

Education Commissioner Deborah A. Gist has dismissed complaints that the new approach unfairly penalizes some districts.

“The fact is, right now in our current approach, there are already winners and losers,” Gist said when the formula was first introduced. “Having a formula actually gives us equity, transparency and consistency in the ways our funds are distributed and the resources we give to our schools.”

Gist concedes it’s not perfect. But, supporters say it’s the first time since the mid-1990s that Rhode Island has a fair method for doling out education aid.

Since the old method was abandoned in 1995, some districts have lost hundreds of students. At the same time, the ability of various communities to pay for their schools has changed. The new formula links state aid to the current number of students enrolled and adds money for low-income students, many of whom have additional educational needs that the additional aid is intended to address.

An estimated 71 percent of the state’s 145,000 public school students will benefit as their school systems receive more state aid.

The General Assembly passed a bill on the last night of the session and Governor Carcieri is expected to sign it into law by the end of June. The effects of the new formula will roll out over 10 years.

As the new formula takes effect, the state also has agreed to assume a greater proportion of other educational spending, including sharing the cost of high-need special-education students and regional transportation, and taking over a bigger chunk of school construction costs.

The state will invest more in pre-kindergarten programs and provide some additional money to career and vocational technical programs. Because the state pays for Central Falls schools, the state will also contribute at least $530,000 a year to that district to help blunt the impact of estimated cuts.

Statewide, Rhode Island pays for an average of 37 percent of local school costs, among the lowest state contributions in the country. The formula requires the state to pay between $13 million and $15 million more a year, starting in fiscal 2012, in an effort to gradually move the average state share up to 52.5 percent over the 10-year period.

Charter schools and vocational schools will lose some state aid as the new law changes the way those schools are financed.

Regional school districts are particularly hard hit, as the new formula does away with hefty bonuses enacted years ago to encourage the merger of services among towns — bonuses that were always intended to be temporary but became frozen in place. “I don’t think we should continue to pay a bonus when the whole point of regionalization is to achieve efficiencies,” Gist said when she testified before the General Assembly this spring.

Lawmakers representing the districts on the losing end of the scale were not swayed.

“These cuts will annihilate the Bristol-Warren school district,” said Rep. Raymond E. Gallison Jr., D-Bristol, before he cast his “nay” vote last week. At the 11th hour, lawmakers extended a small “bonus” to regional districts to help them adjust to the cuts, which phases out over two years.

Other critics of the formula say it’s too complex and may be unfair in the way it estimates how much a community can pay for its schools.

A failed proposal from Rep. Edith H. Ajello, D-Providence, used similar factors as the state Department of Education’s formula, but calculated them differently. Ajello’s version produced bigger winners — Providence would have received close to $50 million more in state aid compared with $29 million, but also much bigger losers. Newport, for example, would have lost $11 million in aid over the 10 years instead of $1.4 million, an indication that according to Ajello’s analysis, Newport could be kicking in more local money to run its schools.

Kenneth Wong, chairman of the Education Department at Brown University and a principal in the development of the formula, said there are countless ways the numbers could have been crunched, but he thinks the new law represents “the most optimal, feasible and fair way to actually use the numbers.”

“In the end,” Wong said, “we found that [this approach] allowed us to have the most optimum number of winners and fewer losers.”

Perhaps most importantly, supporters say, the formula dedicates scarce state resources to the students who need it most.

“I really do empathize with the communities that will be seeing reductions in state aid over time as a result of this formula,” Gist said. “But I am completely confident that this formula does distribute aid equitably.”

It calculates the "core" costs to educate a student: $8,295 per year. This includes the salaries of all personnel — teachers, special-education teachers, principals, librarians, speech pathologists, school nurses, etc.; fringe benefits such as health care and sick days; books and instructional materials; training for teachers; some costs associated with educating English-language learners; and some career and technical costs.

It adjusts for the needs of poor and special-education students: Districts with students eligible for free and reduced lunch receive a 40-percent bonus, resulting in a cost of $11,600 per low-income student. Poverty is used as a proxy for other needs such as special education and students learning English, as studies show those students often are low-income.

It is tied to enrollment: State gives districts, state-operated and charter schools money based on the number of students they serve.

It considers a community’s ability to pay: The formula includes the equalized property value and the median family income of each city and town, as well as the poverty concentration of students, and gives greater weight to whichever factor is dominant in a particular community — municipal capacity to pay for schools or student need.

jjordan@projo.com