Let the budget battle begin: New York style

New York's new governor, Andrew Cuomo, unveiled his proposed state budget yesterday and, as expected, it's not pretty. True to his no new taxes promise, to close the Empire State's $10 billion deficit, Cuomo proposed cutting ?the state's $135+ billion budget by almost 3 percent, with, as the Wall Street Journal said, ?the most dramatic cuts [falling] on education.?

If Cuomo has his way, aid to K?12 public schools would drop by $1.5 billion, a cut of some 7 percent (see here, here, and here). ?New York City schools, the largest district in the state ? and the nation ? with over a million students, would receive some $600 million less from the state than last year.? Some 60% of the state's public school revenues come from the state aid fund; most of the rest is raised locally, from property taxes.

There is some hope that the budget crisis will lead to systemic changes ? to the teacher tenure and seniority system, for example ? but?most districts?will no doubt be?lopping off the heads of the last-hired teachers.

?Mandate relief? is one of those proposed changes. Said the governor,

State Aid reductions are coupled with a mandate relief effort, undertaken by Executive Order, which will lower the system-wide cost of providing education services, thus mitigating the impact of decreases in aid.

Cuomo is also proposing ?competitive funding pools,? a la Race to the Top, that will distribute some of the school aid as rewards for improved district performance and budget efficiencies.

All this seems like small potatoes and there are still considerable blank spaces in the governor's plan, not to mention the bargaining with the legislature and special interests, especially the public service unions, that will no doubt be heated right up to ? and perhaps beyond ? the April first deadline for coming up with a final spending package.? School districts in New York, meanwhile, must develop their budgets in this uncertain environment ? the property tax, which districts often use to compensate for state aid fluctuations, may just be capped ? and present them to voters in mid-May.

?Peter Meyer, Bernard Lee Schwartz Policy Fellow

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