Small schools will take less of a financial hit under the latest version of the per-pupil funding formula approved last night by the state Board of Education.

The board voted 8-2 to support the so-called "sliding scale" formula, which will go into effect next year. Though small schools will still have to make do with less under the formula, their budget losses will be capped at 4 percent in any given year. Other schools will gain 14 percent or more.

Proponents of the new formula say it strikes a balance between getting much-needed funding to schools with bigger populations of students who have learning barriers and making sure smaller schools are not penalized solely because of their size.

Under the old formula, which was being slowly phased in to soften the blow for schools with shrinking budgets, "the biggest losers were small schools," board member Garrett Toguchi said. "Under this proposal, no school will be left behind."

But board member Breene Harimoto, who opposed the measure, said the new funding method misses the point of the weighted student formula, which is meant to resolve past funding inequities and get money to students who need it most.

"I am concerned about the heavy emphasis on preserving funding for small schools," he said at the meeting, held at Kailua Intermediate School. "I cannot in good conscience vote yes."

There are hundreds of schools set to lose under the sliding scale formula. Dozens of schools, including Central Middle and McKinley High, will lose the maximum 4 percent.

Many other schools will gain funding. Fern Elementary's budget is set to jump by 10 percent, or about $248,000. Solomon Elementary will get an extra $564,000, an increase of 15 percent.

Roger Takabayashi, president of the Hawaii State Teachers Association, told the board last night that the new formula does not have enough flexibility to meet the diverse needs at schools.

"One size does not fit all," he said, adding the formula does not address differences in facilities or other operating concerns.

But Schools Superintendent Pat Hamamoto said the new formula is fair. Putting a cap on losses, she added, ensures small schools especially don't suffer under the new funding rules.

"Four percent is minimal because some of the schools were going to be losing as much as 12 percent," Hamamoto said.

The board has been struggling with how to implement a funding formula that increases money to schools that have more students with special needs, such as English-language learners, low-income students or those with disabilities.

The old formula met those demands by giving substantially more funding to large schools in lower-income communities, but forced some small schools to cut staff, programs and services.

Rather than devastate small schools, the board has slowly phased in the weighted student formula and tweaked it each year to try to get it right before it's fully implemented next year.

The sliding scale based on enrollment will provide some relief to the smallest schools, such as 90-student Wailupe Valley School, which has lost resources, even with a subsidy from the Legislature and the slow phase-in of the funding formula.

But the school will lose $44,000 next year under the new formula.

"We'll provide for the kids no matter what it takes," said Wailupe principal Jean Hartmann. "In one sense, it's been very good because we've had to find the best in all of us to be creative and find ways to provide services to the students."

The sliding scale formula was approved by the Board of Education Budget and Fiscal committee on Wednesday before going before the full board last night. The alternative approach would be to assume that allocating funds based on individual students needs would account for school size, said Robert Campbell, director of the state Department of Education program support and development office.

Part of the Reinventing Education Act of 2004, the weighted student formula assigns a dollar amount per student, then adds more money to students with greater challenges.

The formula is meant to give principals more flexibility in how they use their budgets, including deciding which support staff positions are necessary and perhaps where more teaching posts can be added. It accounts for the bulk of the money principals have to pay for salaries and to buy textbooks and other supplies.

While DOE at one point considered shifting $33 million among schools, the latest proposal would lead to less money changing hands.

"A shift of $20 million has less negative impact on small schools, while still giving substantially more money for big schools," Campbell said.

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com and Treena Shapiro at tshapiro@honoluluadvertiser.com.