A Board of Education committee settled yesterday on a compromise on a controversial funding formula that will minimize schools' gains and losses during the first year of implementation.

The weighted student formula is aimed at making funding more equitable across the state and targeting money at the students who need it the most. As proposed, it would result in gains or losses of hundreds of thousands of dollars at some schools and would affect every regular public school in Hawai'i.

The committee decided to cap the changes at 10 percent for the upcoming school year while it continues to work on the formula to come up with something more palatable to board members. The Department of Education's proposal included a four-year phase-in that would implement the changes at 25 percent a year.

Randy Moore, the DOE program manager who has overseen the formula's development, saw no problems with the amended implementation schedule. "Anything is workable for us," he said.

The full BOE will consider the amended formula on Thursday after voting a prior version down last month, then reviving it for reconsideration by the committee.

The weighted student formula is an important piece of the Reinventing Education Act of 2004, and will give schools more discretion over how to spend their funds by giving them "lump sum" budgets based on student enrollment, rather than staff positions.

Through assigned "weights," extra money will be directed to students who need more help, such as those who are poor, just learning English, have special needs or change schools frequently.

However, the formula as proposed would have the largest effect on rural, remote, small and combination schools.

For instance, the biggest loss would be sustained by Laupahoehoe High and Elementary School on the Big Island, which would lose $884,948 if the current proposal is fully implemented. But under an amendment approved yesterday, it would lose only $88,495 in the first year, instead of $221,237.

The eight-member committee passed the proposal with six members voting in favor, one against and one abstaining.

Maui board member Mary Cochran, who said two-thirds of the schools she represents will lose significant money, was the member who voted against the change.

Board chairman Breene Harimoto emphasized that the BOE was really only making decisions for the first year, since it is required by law to revisit the formula annually. "We have a whole year to iron out these issues that are coming out at the eleventh-hour," he said.

O'ahu at-large member Karen Knudsen proposed the amendment with the understanding that the committee would revisit the formula before the 2007-2008 school year.

Cochran, however, was not convinced the formula will be altered once it has been put in place. "This Department of Education has a nasty habit of institutionalizing their practices," she said.

O'ahu at-large member Garrett Toguchi abstained from voting on the revised proposal. His suggested amendment, which was defeated, would have delayed losses or gains for another year. "I don't think the formula was responsibly done," he said.

But House Education Chairman Rep. Roy Takumi, one of the architects of the education reform law, recommended against postponing implementation, pointing out that the BOE backed the proposal when it was before the Legislature.

He also noted that a 10 percent reduction is "a very small amount" and the DOE has faced bigger budget cuts in prior years.

Takumi warned the board not to hope that the Legislature will step in and boost the DOE's budget to make up for the losses.

"I would be reluctant to do that," he said.

Reach Treena Shapiro at tshapiro@honoluluadvertiser.com.