The city’s Department of Education will likely lift the ceiling on class sizes this year, a department official said today.

DOE chief operating officer Photeine Anagnostopoulos told the City Council education committee this morning that it was realistic to expect the city to “adjust” its class size targets. How dramatic the increases will be is still unclear, she said.

“We have to go back and do some more homework,” Anagnostopoulos said.

Anagnostopoulous’ comments came during a hearing on the department’s use of state Contracts for Excellence funding. The funds are given to school districts that prove they will spend the funds in six key areas, one of which is class size reduction.

As part of the legal settlement that established the funds, the city was required to adopt a five-year plan for class size reduction. Under that agreement, which the state approved in 2007, the city planned to reduce class size to around 20 students in kindergarten through third grade, around 23 students in grades four through eight by the 2011-12 school year.

That plan was made under the assumption that the amount of state money would increase each year, Anagnostopolous said. This year, in the face of a severe budget deficit and looming cuts, the state froze the funds and planned to grant the city the same amount it received last year.

“Now we have two years with no new money,” Anagnostopolous said.

Anagnostopoulos said that though the total amount of Contracts for Excellence funding will remain constant this school year, how the money is spent will change.

A growing number of principals have decided to spend their funds not on reducing class size, but in one of the program’s other key areas, Agnostopolous said.

“It’s likely that the combination of budget cuts and rising costs created a situation where principals felt that other strategies would be more effective and achievable than class size reduction,” she said. She later pointed to an increase in funding for programs for English language learners as an example of where principals may be redirecting their spending.

Leonie Haimson, executive director of the non-profit Class Size Matters, disputed this claim in testimony later in the hearing. She pointed to responses to her organization’s survey of principals that suggests many principals believe their large class sizes prevent them from providing a quality education to their students.

Anagnostopoulos spent much of the rest of the hearing defending the department’s handling of the public comment process on how the funds should be spent. While most school districts in the state held their mandatory hearings on the funds over the summer, the city DOE delayed their hearings until after the school year began.

Anagnostopoulos defended the decision to hold the hearings later in the year, saying that it did not make sense to hold hearings on the funds until after the overall city budget was set.

She added that the move was intended to increase public participation in the hearings, though she said the department had not compiled numbers on how many people attended the hearings, which took place at the first meeting of each local district’s Community Education Council.

A representative of the group that brought the lawsuit which resulted in the state funds said that was no excuse for delaying the hearings. “The time line really makes a mockery of the process,” said Helaine Doran, deputy director of the Campaign for Fiscal Equity.

The hearing also resurrected a debate over whether the city is using the state funds to supplement its own budget, or using the state funds instead of allocating city money to areas like class size reduction. Under the state legislation establishing the fund, the city is required to use the funds “supplement, not supplant” its own spending, which Anagnostopolous said the city was doing.

Doran and Eric Weitman, the New York City advocacy director for the Alliance for Quality Education, charged that the city had cut more from the budgets of the highest needs schools. The result, they said, was that the Contracts for Excellence funds are being used to fill in the gaps.

“We think supplanting is still on the table here,” Doran said.

The Alliance for Quality Education made the same argument in a new report on how the city is using its Contracts for Excellence spending, timed to coincide with the hearing. The report is not available on the AQE website, but here it is in full: