School Finance

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...

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As Peter noted earlier, we're witnessing something rare in New York right now ? a Democratic governor cutting budgets, pushing for property tax caps, even targeting education spending for aggressive reductions. With a $10 billion budget deficit and all its Federal stimulus funding squandered, this may be just what the state needs.

What is perhaps most laudable in Andrew Cuomo's proposed budget is that he seems to be taking the crisis as a chance to bend the cost curve in government for good, taking on basic funding formulas in addition to proposing temporary cuts.?What's not clear, however, is that he, the legislature, public-sector unions, or other players in the state are thinking creatively enough about how to re-envision how government works.

On Monday, Lou Gerstner, former CEO of IBM, had an op-ed in the Wall Street Journal arguing for just this kind of restructuring, and one of his fundamental tenets is, ?Focus on programs, not costs.? In a previous life, when I was a management consultant, this was my dogma. If tasked with cutting 5% of a business unit's budget for a client, my first step was to think about how I would fulfill that unit's mission if I had to start from scratch. If I could succeed in reinventing a process or two more cost-effectively, I could usually make cuts while improving operations ? not making things worse.

At least when it comes to schools, the powers that be in...

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When Congress starts to debate education funding in coming weeks and months, keep the following headlines in mind. All of them refer to federal dollars that flowed from the $100 billion education stimulus.

At Avondale Elementary, 90 new iPads help students ?app'ly themselves

Florida Schools giving away $350,000 worth of ipods?using stimulus money

Detroit Public Schools: 40,000 kids to get laptops from stimulus funds

Senators criticize using stimulus money on iPods

Rather than get snarky, let me admit: These purchases probably did stimulate the economy.

-Mike Petrilli

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Reuters is reporting that Mayor Michael Bloomberg is set to lay off 15,000 teachers in New York City in anticipation of State deficit crunches.

Fifteen thousand teachers!? That is probably more teachers than employed in some of our states.

Granted, this is?only two twenty percent* of the 75,000 teacher workforce in Gotham's one-million student system, but the raw numbers are awe-inspiring. Fifteen thousand teachers laid off!? That's a whole city's worth of unemployed teachers.? I can see the tents now. ?Teachervilles?

The number came from a local?radio interview the Mayor gave.

The scuttlebutt is ? I don't know if it's true or not ? is that the education budget will be cut statewide and New York City's share of that would be a $1 billion cut.

One billion dollars. That's another awe-inspiring number. ?More than some country's GDP, I'm sure.

Much of this, of course, is posturing, with the Mayor painting as unrosy a picture as possible in order to win sympathy for schools in advance of the state's budget negotiations.

Okay, go for it Mayor Mike.? But still, 15,000 teachers? ?Does 10,000 sound better?? Five?

Is the Coney Island rollercoaster still working?

?Peter Meyer, Bernard Lee Schwartz Policy Fellow

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*Thanks to an astute reader, I have corrected my decimal point error!...

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This policy brief lists fifteen concrete ways that states can “stretch the school dollar” in these difficult financial times. Written by Marguerite Roza, senior data and economics advisor at the Bill & Melinda Gates Foundation, and Michael J. Petrilli, executive vice president at the Fordham Institute, it argues that budget cuts alone, without concurrent reforms, could set our schools back years. But by addressing state mandates around teacher tenure, “last hired, first fired” policies, minimum class sizes, and more, states can free local leaders’ hands to make smart, courageous cuts and do more with less. In other words, this challenging climate is an opportunity to make some real changes in education. Read on to find out more.

15 Ways that States Can Stretch the School Dollar

  1. End “last hired, first fired” practices.
  2. Remove class-size mandates.
  3. Eliminate mandatory salary schedules.
  4. Eliminate state mandates regarding work rules and terms of employment.
  5. Remove “seat time” requirements.
  6. Merge categorical programs and ease onerous reporting requirements.
  7. Create a rigorous teacher evaluation system.
  8. Pool health-care benefits.
  9. Tackle the fiscal viability of teacher pensions.
  10. Move toward weighted student funding.
  11. Eliminate excess spending on small schools and small districts.
  12. Allocate spending for learning-disabled students as a percent of population.
  13. Limit the length of time that students can be identified as English Language Learners.
  14. Offer waivers of non-productive state requirements.
  15. Create bankruptcy-like loan provisions.

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