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But the tentative flourishing of innovation is at risk of being overwhelmed by a massive funding shortfall that has cast doubt on the superintendent's ability to safely open schools in September, let alone spread promising new models across the 131,000-student system.

In late May, at the superintendent's urging, the governing School Reform Commission refused to endorse a budget that called for steep class-size hikes and a fresh round of cuts.

Even when the money is there, those observers say, a thicket of problems—labor strife, dysfunctional bureaucracies, crazy politics, leadership churn—prevents sustained investments in the instructional expertise of teachers and principals.