Transcription of the episode “Savage inequalities: How school funding intentionally privileges white, wealthy communities “

Jon M: [00:00:15] Hi, I’m Jon Moscow.

Amy H-L: [00:00:17] And I’m Amy Halpern-Laff.  Welcome to Ethical Schools. Today we’ll continue to look at how inequities in our school systems impact Black lives and lives of Indigenous and other People of Color and low income whites, and what can be done  it. Today we’ll discuss school funding. Our guest is Zahava Stadler, Director of Policy at EdBuild,  a nonprofit that, until it just closed, studied school funding schemes, and fairness in the way states fund public schools. Welcome, Zahava.  .

Zahava S: [00:00:46] Thanks so much for having me. 

Jon M: [00:00:48] How are schools funded in most of the country?

Zahava S: [00:00:53] So I think a lot of people think that it has something to do with property taxes and something to do with the federal government. And that is kind of true, but also pretty incomplete. So I’ll give just a really quick sketch here, which is that… 

I’m just going to bracket the federal funding right off the top. There is a little bit of federal money in public schools, but actually less than 10% of school funding comes from the federal government. And it’s all just sort of icing on the cake. It’s not part of the core funding system in any state. So that’s something that I think people overestimate.

More importantly is the balance between state dollars and local dollars. So the way it works in pretty much every state is there is a formula that says here’s how much we think districts, each of our districts in the state, need to operate. Okay, well, the state’s going to figure that out and total it up. And then it’s going to say, okay, well, we expect you to kick in some money from local property taxes. How much do we think you can raise? And it’ll look at things like, okay, this is a really, uh, high home value area. This is a pretty low priced area.

It’ll factor that in, figure out how much money the place can be expected to kick in. And then the state will provide the balance between what it thinks you need and how much you’re expected to kick in. That doesn’t mean that that’s all the money there is. In fact, in most places, local school districts actually are raising extra money over and above that amount. And that’s all money that they get to keep no questions asked. So that’s the big overarching picture in terms of school funding in most states. Of course, there’s lots of fine print from state to state. 

Amy H-L: [00:02:26] How does reliance on local property taxes particularly shortchange Blacks and other communities of color?

Zahava S: [00:02:34] This is something for which we need to go digging in history, but unfortunately not very deep in history. And this is something that’s really important to understand. And I say this probably three times a week. In America, housing policy is education policy. So here’s what I mean by that. Because of the role that property taxes play in school funding, we have really tied our school funding system to the value of homes and to home buying in this country. But a long history of discrimination in housing policy and specifically in the realm of home buying has meant that Black families and communities have had a really hard time building wealth in the housing stock, in their communities. So policies going back to, for instance, soldiers coming back from World War II received mortgage help from the federal government. But only the white ones. Black soldiers returning from World War II didn’t get that kind of support to build wealth and housing for their families. There’s a long history of the federal government backing up mortgages, insuring mortgages so that banks are comfortable lending to people, but there’s a long history of something called redlining, which is something that your listeners may have heard of, where basically the federal government put out these maps and said, okay, well, these areas in red, these are too risky. We’re not going to insure those mortgages. We don’t recommend lending in those areas. And what made an area risky? Just a single Black family made an area risky. So there’s this long history of the federal government and state and local governments discriminating in how housing could happen in Black communities and white communities. And so what you see is that residential segregation has resulted in a map where white communities often have very high value properties and Black communities often have very low value properties. Even if these people make the same incomes, even if we’re talking about similarly middle income families. There’s lots of research showing that a middle income Black family is more likely to live in a poor, low value area than a white family making the exact same income. And so what that means is that going back over this long history of discrimination, we have set up Black communities to have less property tax revenue for their schools. And that is a huge driver of inequity and disparities in our communities and in our schools. 

Jon M: [00:05:02] What are some ways in which affluent communities gerrymander school districts to ensure that their schools receive the buk of the funds while schools in poor communities struggle? Can you give some examples?

Zahava S: [00:05:14] Sure. And I think that it’s important to note that nobody would say that this is what they’re doing, but ultimately this is the result of the incentives that we have baked into the system. So here are a couple of things that happen. One is that you have a school district border, let’s say it doesn’t move. Let’s say that school district border has been that way for 50 years. And on one side of the school district border, you have really high value homes. You’ve got a really property rich community, and they’re able to raise a lot of money for their schools and they’re doing really well. And their kids have an Olympic size pool and lots of field trips and things that are funded by a rich tax base.

Well, a family with means, you know, parents just starting their family, thinking my kids are about to enter the school system. Where do I want to be? They have a conversation and this is a conversation that takes place around kitchen tables everywhere. And we don’t even stop to think about how crazy this is.

They say, can we afford to live in a good school district? Think about how crazy that sentence is. We are talking about public schools. Can we afford to live within reach of good public schools? This is a conversation parents have constantly. And what happens is that the families with means move into higher value communities, places where they have to pay a little more to get a home, but those high home values power richer school budgets and feed into a perception that it’s a better school district, which attracts more families of means, which raises home values higher. And there’s a vicious cycle that makes those schools more and more inaccessible to families that don’t have that kind of money. So that’s one thing that happens is that even if the school district borders stay the same, the fact that the school district border defines where you raise the money for the school and where that money comes from and where it goes, that means that we’re incentivizing families to self-sort, to segregate themselves by wealth. So that’s one factor.

And then you get another factor where sometimes communities with means actively work to change school district borders in ways that help their kids and their schools. And when I say their kids, I mean a really narrow definition of their hyperlocal community children. So for instance, school district secession is something that EdBuild has chronicled over the last couple of decades. We’ve identified at least 124 instance where communities have seceded, pulled away from their school districts, drawn a new border and said, we’re not part of that big district anymore. We’re out. We have our very own micro district and we’re going to keep those tax dollars just for the kids in our super immediate neighborhood. And the school funding system is what makes it advantageous for them to do that. It creates a new tax border. Drawing that new school district says, okay, now this little wealthy area is what’s going to support the schools here, and it’s going to keep your property values high to draw that border here. And it’s going to advantage your school district borders to keep needier, more expensive- to-educate kids out on the other side of the border. And so those secessions are maybe the boldest example of the kind of gerrymandering you’re talking about, though of course there are more subtle ways as well. 

Jon M: [00:08:23] I know EdBuild  has talked about what happens, say, in a place like Indianapolis or in Columbus, Ohio in terms of school district borders. Could you elaborate on that a little bit? 

Zahava S: [00:08:36] Sure. This is going back to the second half of the 20th century. So going back to the late sixties, early seventies in Indianapolis, in the eighties in Columbus, and those aren’t the only two instances nationally. What happened was you have the sense probably, as somebody who hears the name Indianapolis public schools or Columbus city school district, that Indianapolis public schools serve the city of Indianapolis or that Columbus city schools serve the city of Columbus. You’d be forgiven for thinking that, but actually it’s not even close to true. And the reason for that is that these cities did not always have the borders they have today. So Indianapolis, for instance, used to be just the center of Marion County, Indiana, not the whole county, but in the late sixties, early seventies, there was a big push to merge those governments. And actually over time, the city expanded to encompass the entire county. Now the city and county, they’re are one and the same. But when the people pursuing this effort wanted to bring it about, they knew that the big barrier was going to be the schools, because if the city school district and the suburban school districts within the county all became one big school district, then they’d all be part of the same school finance system. And they’d all be part of the same desegregation plan. And everybody knew that was going to be a nonstarter for the largely white suburban communities around Indianapolis. So, what they did was they made a trade. The city officials that wanted this merger traded away the school district. And they actually got the state legislature to write into law that if they got this expansion for the city and they got to merge with the county and expand the city tax base and spur economic development in the city that they would trade away Indianapolis’s right to expand the school district along with it. So instead, Indianapolis public schools got frozen with its current borders. And the suburban school districts got to keep their suburban school districts, even though they were no longer suburbs, even though they were part of the city. So when it comes to their kids and only when it comes to kids, they got to keep their money separate, they got to keep their governance separate, and they did not have to be a part of the larger community effort to educate kids. So what happened was we now have the city of Indianapolis, which goes all the way to the edge of the county. But the County includes not only Indianapolis public schools, it also includes eight other quote unquote suburban school districts that are the last vestige of the old maps. So those suburbs held on to their borders and it kind of reverse gerrymandered to maintain the advantage they had. And it was a pretty similar story in Columbus, Ohio, a decade later. 

Amy H-L: [00:11:14] Zahava, what about these micro districts? Where are they located? How does that even happen? 

Zahava S: [00:11:21] You know, sometimes it’s the result of the kind of border changes we’re talking about, where a community secedes from a big school district to create a tiny little fragment district. But sometimes we have micro districts that have a really long history. So if you look at a US map with school districts overlaid on top of it, you’ll notice some trends. So you have places in the South that have big county school districts or in some places out West, but when you look in the Northeast and Midwest, the school district map looks pretty tiny and it’s very confusing as to why that should be. So something I like to point out. I’m  from New Jersey so I like to pick on New Jersey. So New Jersey, think about it in the in the span of the US map, has 600 school districts. The state of Maryland, which has about three quarters as many school kids as New Jersey, has 24 school districts. The difference between 6oo and 24 is kind of nuts. There’s no reason that New Jersey should need 600 separate school districts to effectively educate its kids. In fact, it’s probably doing a worse job because it has so many school districts. It’s duplicating services. It’s wasting a ton of money. You’ve got a separate superintendent and administration in every single tiny little fingernail size district, but there’s a long tradition that every single town in most of the Northeast gets its own school district.

And that means that while we might criticize some other parts of the country for secessions, we might say, “Oh, look at the South. There are these school districts, the secessions happening in so many parts of the South.”  You might look at the Northeast and say, actually those places are kind of pre-seceded. There’s nowhere else to go, because it’s as fragmented as it’s going to get and you have a serious problem already. 

And so thinking about that, I think people on the ground look around and, and they think, well, yeah, school districts look like this and they have since time immemorial and they look like this pretty much everywhere. And basically this is just, you know, set in stone. It’s like natural boundaries, like rivers or mountain ranges or something. And really none of those things are true. School district borders are constructions of policy. They can be changed. Sometimes they’re changed in ways that manipulate them to the advantage of people with lots of political influence and means. And sometimes changes are resisted by people with influence and means, often leaving kids worse off behind.

Amy H-L: [00:13:44] EdBuild  suggested that shifting funding from school districts to either the county or state level could eliminate some of the inequities. How would that work? 

Zahava S: [00:13:56] You know,  I think that we forget that not every tax is a local tax, you know, not every tax is a federal tax, right. So there are different things for which we have different systems. So people think, okay, schools happen at the local level, but I also pay my state income tax and that funds the highways and I pay my federal income tax and that takes care of national defense. There are different things that we have slotted in our heads, but there’s no law of nature that says, “Oh, the way you fund schools has to be local property taxes”. I mean that, there’s nothing that, you know, there’s no biblical commandment that says schools must be funded from local property taxes. There are other ways to think about it. And so one thing that EdBuild did was said, “what if we thought differently? Because when we draw these borders, we’re separating kids from resources they need because of the kind of residential segregation we were talking about .This district as high value homes and that district has low value homes and we just drew a line between them.” 

And then, “Oh, there’s nothing we can do. Maybe there is something we can do.” And so what we looked at was what if the local money that we collect for schools, instead of being collected just from the individual school district were collected and pooled at the county level or the state level, or even just from a district and its immediate neighbors. And we modeled all these things out for every school district and state in the country. And what we found is if you pick  he system that works for more kids in every state, either county pooling or state polling, if you say, okay, just which one would benefit more kids and you do that for every single state, that 70% of kids would get equal or greater funding from that kind of pooling. Nobody’s taxes go up. Not a single additional dollar gets spent, but 70% of kids get equal or greater funding, which tells you by the way, what a small number of kids are currently coming out ahead. And that what we’re talking about is really leveling the playing field for kids in each area. So that we’re not just thinking about money for kids in my backyard, but money for kids in my county, money for kids in my state, money for kids in my community, in a broader way. If we have a little bit more of an expansive notion of where we’re raising and spending that money, then we can benefit the vast majority of kids. And by the way, it’s, it’s higher than 70%  if you say, what percentage of low income students or what percentage of non white students that even higher numbers into the seventies are benefiting if  we can pool revenue at a higher level. 

Jon M: [00:16:23] So  going back to the property tax state formula issue, and other sources of funds, actually, I have a couple of questions and I’ll sort of break it up. So as you’ve mentioned, every state has a funding formula that seeks to somewhat equalize funding among districts, but EdBuild  has written about how other sources of funding that are not included in the formula can tremendously exacerbate inequities. What forms does this take, these extra sources of funding?

Zahava S: [00:16:51] There are a few different ways this happens. So if I say your school district needs a million dollars, and then I say, okay, reasonably based on your property tax base, I’m gonna measure that you can reasonably raise$200,000 from your local tax base. Well, I’m going to kick in the other $800,000. And if that was the entire picture, then we would have a pretty good system, where the state’s efforts to equalize things really did support districts across the board. And it really wouldn’t be a particularly problematic thing that we had the property taxes involved. But that’s not the end of the story.

So the biggest factor is that we don’t stop communities at that $200,000. So let’s say, I think, “Hey, that rich community should really be covering half its tab based on the numbers that I’m seeing on the ground. Okay.”  But if that wealthy community is able to raise its local taxes just a tiny, extra bit, given the high value homes, that could raise a lot of extra money and all of that extra money is something that they get to keep. The state doesn’t equalize that. It doesn’t offset it in almost any state because it’s just, it’s not part of the calculation. The state says here’s what I expect you to raise. I’m not going to look at what you actually do raise, that’s your business. And because that’s your business, high wealth districts have a much easier time raising extra money. And that raises the goalposts, that moves the goalposts for everybody. So those communities wind up raising lots of extra dollars in ways the poor communities can’t hope to match. So that’s one important thing. 

Another important thing is things like PTAs, community fundraisers. And I think this is something that people can look around and see in their communities. It doesn’t require a lot of policy expertise, but it really is true that in wealthier communities, you just have an easier time. Parents have the time and flexibility to run local fundraisers. They have the means to contribute and that, in wealthy communities, those extra dollars, that it’s a donation. It’s not public funding. All of that, that actually does do a lot to drive up budgets, especially for things like extracurricular activities, special facilities, things like that. And all of that is outside the funding formula. None of that is rebalanced in any way that looks out for low wealth communities. 

Another way this could work is the state might have its funding formula and then some other stuff. So the state has the core funding formula that calculates what districts need, but it might also have a lot of grant programs, special things that are like, well, we have our core funding formula, but if your state wants to Institute an innovative new program for such and such purpose, just apply for the funds. Fill out this very complicated process. Maybe you are lucky enough to be a district that can hire some special grant writers or you have a volunteer parent who has that kind of development experience or things like that, where communities with means might have an easier time accessing those grant funds.

Even if those grant funds are apportioned fairly without being distorted by things like grant writers and parent volunteers, even if it’s not dependent on that, all of that is still outside the formula that gets equalized and rebalanced. So anything that’s sort of extra over the top is going to drive inequity in a worse direction.

Jon M: [00:20:12] So the second part was about the formula itself. It sounds as though you’re saying that in most states, and correct me or add to it, that the core funding formula is more or less fair, that, you know, this is what you can afford. This is what we’ll supplement, but in this case, why are there so many suits and such, you know, outrage about property taxes being the the determining factor? Wouldn’t people just say well, we have a low wealth district, but it’s okay because the state is going to fill it in, leaving aside what you were just talking about, all the extra ways that people, you know, wealthier communities can find extra money, but just going down to sort of what’s built into the funding laws. What have you found about those?

Zahava S: [00:21:03] Well, I think it’s two things. So one is that I wouldn’t shelve that extra money. I wouldn’t put it aside because actually the state has the ability to put in funding laws that bring that into balance, right. The state has the ability to say if a district raises extra, we’re going to count that in the funding formula. We’re going to equalize that, too. We’re going to offset state aid and use the extra state money that’s freed up to support other communities. The state could do that. The state can also put in guardrails and say, okay, maybe districts can raise a little extra money, but not that much extra. We’re going to put in caps. Or we’re going to say, if you raise extra, then maybe you have to provide matching dollars to other districts. There are ways within the realm of state policy that they can handle those quote unquote extra dollars and bring the whole picture into a more equitable, more equitable balance. So that’s a real thing, and some states are doing a better job of that than others. Most states are not, and that does result in the kind of off kilter distribution that leads to the kind of school funding lawsuits you’re talking about, where communities say at the end, “Hey, maybe the state’s giving us extra money, but not extra enough to match the richer district next door.” So that is an important factor. 

The other thing I want to say is I may have been over-simplifying a little bit when I said that if the formula were all the money there was, things would be pretty okay. That’s true in some states, but, basically, if the formula were all there was, then things would look as fair and equitable as the formula itself. And so that puts the onus on the state. They have a really good formula, you have one that does a really good job of measuring how significant the needs are of students in that district, of measuring how significant the funding burden can be on any individual community, given their local wealth levels. So the formula basically, how good is the math? How good is that equation? If we’re not really measuring your local tax capacity, well, then maybe we’re putting an unfair burden on you, or maybe we’re not asking enough of wealthy communities. And at least as important, if not more so, does the formula do a good job of measuring that your students have additional needs that need more money, not just the same money as wealthier communities, but more money? Maybe you serve a lot of students with English language learning needs. Maybe you serve a lot of students that come from low income households that arrive in kindergarten less ready to learn, or come to school in the morning with empty stomachs. Does the, does the state do a good job of assessing how much money you really need before it does the rest of the equation?

Amy H-L: [00:23:42] Let’s talk a little bit about EdBuild, which closed its stores as of June 30th. I understand that the idea was to achieve certain objectives within five years, and then to wind down. What has EdBuild accomplished and what remains to be done? 

Zahava S: [00:24:02] You know, I’m a little bit of mourning right now because I’ve been with  EdBuild for the five years, pretty much the entire length of the organization. And  we’ve just closed our doors. So it’s a bittersweet time because I think that this is a valedictory moment for us, but it’s also a tough transition. Edbuild has been a really mission driven, really focused organization. We have been talking about school funding equity exclusively, from the beginning.

And we have always said three things; that the school funding system that we have is outdated, meaning  there are places where you haven’t updated school funding formulas since the eighties. In a couple of states, you haven’t updated them since the forties, that we’re not responding to the classrooms we have;, and we’re not responding to the needs of kids on the ground. 

We’ve  also said the school funding systems, as we have them, are arbitrary, meaning you can have two communities serving very different kids with the same money. You can have two communities serving very similar kids with very different money that we’re not matching. We’re not matching money to the needs of the students in the classroom.

And finally, that school funding systems incentivize segregation, that through the relationship with property taxes that we’ve been talking about, that you incentivize communities to sort themselves by wealth. And that, that has significant overlays with race because of the long history, the discrimination that we’ve been talking about. 

And so those are the three problems that Edbuild has really tried to call attention to over the course of its years as a school funding organization. And I flatter us that we’ve done a decent job of that. There’s been a fair amount of news coverage of this issue. And through Edbuild’s research that wouldn’t have existed before, that we had some pretty important findings that have cropped up and in everything from local school funding context, when we talk about local news stories in local press to being a question in a presidential debate this past year. And so we’ve been very proud to shape the conversation, to talk about the fact that sourcing school funding from local property taxes doesn’t make any sense, and it’s something that we should fundamentally question. And that’s something that I think EdBuild has really been instrumental in bringing about.

Something that’s a little less high profile that EdBuild has been doing is that we’ve also had engagements on the ground in a number of states where we work with anybody from local community advocates to the governor’s office to develop proposals for improving school funding in that state. And so that’s something that on a state by state basis we’ve been doing around the country, ranging from East Coast to Midwest to the South. And so that’s something that we’re proud of as well, that  this isn’t just something that we talk about in position papers, that it’s something where we’re there testifying in the State House, where the rubber meets the road, trying to make things better for kids. So that’s something that EdBuild has been working on throughout. And what we’re hoping to do at this stage is pass the baton, that we’ve done what we can to raise the profile of these issues, to educate some people on the ground to create a different conversation in state advocacy. But now when it comes to moving the needle for individual states, that that’s something that takes time and takes local connections and a long investment. And that’s something that we think that advocates on the ground at the state and community level are better positioned to carry forward. 

So we’ve released some parting gifts, some tools to help people on the ground access better data, to better understand their school funding laws, to understand how to better formulate school funding policies. So we’ve put all of those out on our website and I’m happy to share links that you can put in your show notes so that people can see the kinds of resources that we’re passing along to others in the field to continue this work. 

Jon M: [00:27:41] So I’m assuming that your website will continue to be accessible even though you’ve closed. Part of that was going to be just if there were some of the reports that you want to mention in specific, things that people might want to look at. 

Zahava S: [00:27:56] Sure. So we have kept and transformed our website. So instead of the website that you might’ve seen a few weeks ago, when EdBuild was still a going concern, we’ve now transformed it to a sort of, um, EdBuild was an organization that did these things, and here’s an archive of everything you might need to understand the problem and to bring solutions to bear. So you can find that at

And a couple of things that you might want to look for on the website. So the funding pooling research that we were talking about earlier, what would happen if we pulled local revenue at the county or state level. That report  is called Clean Slate, and it’s got a great interactive where you can look at your state or your individual district and see the impact of that kind of change in policy for kids in your area. 

We have a report called Frontier, which is a 50 state roundup of the school district border drawing laws in every state. And I’m hoping that after listening to this conversation, that doesn’t sound as dry to you as it might have an hour ago, that you understand that border drawing laws is something, are something that really matters for the experience of kids on the ground, and understanding those, using them for good or fighting to change them where they’re bad is something that can be really powerful. So that report is called Frontier. 

We have a release called Common Sense and Fairness, which is basically EdBuild’s dream funding formula. Here’s what it would look like. And here’s what it could look like, uh, in your state, with an interactive formula builder that you can use to create recommendations to present to lawmakers or people as part of your advocacy.

It’s a great interactive website that is really user-friendly. Kudos to EdBuild’s data and web team in general for the kind of accessible visual interactive sites that we have built. And when I say we, I mean, everybody who isn’t me, so I’m just bragging on them. So all of those things, I think are great resources as you think about how to identify the problem and fix it.

We also have a fantastic data dashboard. So Ed Build has hopefully been known for for data-driven analysis. And if you are interested in looking at data in your state or community. So for instance, what does revenue look like if you sort by percentage of students in poverty or percentage of students who are nonwhite, or what if, are we sending more money to districts that serve more low income or English language learners or students with disabilities? What does that look like on a map of districts? You know, how does revenue map onto home values in my state, all of that is super accessible, interactive for a lay person to do so that you can sort of have your own pocket data team to try and think about how to inform your advocacy with the kind of hard numbers that you need to power your conclusions. So I’m happy to share all of those links with your audience.

Amy H-L: [00:30:46] Do you expect the current Movement for Black Lives to catalyze a movement towards eliminating systemic inequality in schools? 

Zahava S: [00:30:58] You know, I, I think that I’ve already seen some of the conversations shift in that direction, which is exciting.

And I think this is one of those things where systemic racism in society touches every possible policy area. And everybody has their own pet area, and school funding is mine. And I don’t want to presume to say that this is the most important priority over and above things like policing or housing or healthcare equity. But I think it is definitely part of the picture. All of these things are interrelated. And as I said before, housing policy is education policy, and education policy is the future of citizenship. And these things really matter. And one thing that I’ve been really appreciating as I’ve been reading news coverage of the recent Black Lives Matter protests and reporters seeking to contextualize the protests and what the conditions are on the ground for people in communities, that I’ve been seeing citations to an EdBuild finding from last year, which is that predominantly non-white school districts and predominantly white school districts serve about the same number of kids in this country. But predominantly non-white school districts have a collective $23 billion less in school funding. And that’s something that, that we brought out last year. And I think that that finding was powerful. It struck a chord with some people, and I’m seeing it in all kinds of news coverage of the Black Lives Matter protests today, to understand why that matters for schools. And I hope that we have provided some tools to help support people that want to bring this activism.

Jon M: [00:32:39] Thank you , Zahava Stadler, and thank EdBuild, and as EdBuild has wound down, thank you for the work and the data and the analysis that you and your colleagues have provided over the last five years. 

Zahava S: [00:32:52] Thank you so much for having me. It’s a privilege to share this [inaudible]. 

Amy H-L: [00:32:55] And thank you listeners. If you liked this episode, please consider subscribing and giving us a rating or review. This helps other people to find the podcast. Check out our website,, for more episodes and articles, and subscribe to our monthly emails. We post annotated transcripts of our interviews to make them easy to use in workshops or classes. We work with consultants to offer customized SEL programs with a focus on ethics for schools and youth programs in the New York City area. Contact us at We’re on Facebook, Instagram, and Twitter @ethical chools. Our editor and social media manager is Amanda Denti. Till next time.

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