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August 5, 2010


More heedless aid to capless schools

E.J. McMahon

**UPDATED**

Just when it looked like New York’s free-spending public schools were finally about to meaningfully tighten their belts, news came from Washington yesterday that the U.S. Senate had cleared the way for another $26 billion dose of “stimulus” that will earmark $600 million for K-12 education in the Empire State.  This is enough to restore a large chunk of the $1.4 billion school aid cut in the recently enacted 2010-11 state budget.   The aid package also includes **$800 million of an added** $1 billion in extra Medicaid reimbursements the state has been counting on.

Chuck Schumer and Kirsten Gillibrand now get to bask in the media afterglow. “DC coming to NY’s re$cue,” the New York Post headlined, next to a photo of Schumer (who is seeking a third term this year).

In fact, assuming the House follows suit in a couple of weeks next week, the added federal aid will translate into another year of spending at levels that the state cannot afford to sustain—and Washington cannot afford to continue subsidizing (in part with New Yorkers’ own taxes).   And then what? Concerning education in particular, keep in mind:

  • New York’s spending of $17,173 per pupil as of 2007-08 was the highest of any state, 67 percent above the national average, according to the latest data from the Census Bureau.
  • Between 2000-01 and 2008-09, New York schools added 14,746 teachers and 8,655 non-teaching professionals–even as enrollment was dropping by 121,280 pupils.
  • Confronted with an average 5 percent state aid cut, school districts tapped their (often sizable) reserves, trimmed programs and held down tax increases in their proposed 2010-11 budgets.  As a result, 92 percent of school budgets were approved by voters in May.  The bottom line: for the most part, schools and the public signalled they could live with the sort of aid reduction that stimulus fans have portrayed as destructive and intolerable.
  • Mayor Michael Bloomberg announced in June that he would avoid layoffs in New York City schools by withdrawing his offer of a pay hike for city teachers. A partial aid restoration, courtesy of Congress and the Obama administration, is likely to mean that members of the United Federation of Teachers will collect on at least a portion of the 4 percent raise they had been seeking, expanding the base of school expenditures that city taxpayers must fund in future ye ***But a partial aid restoration could find its way into teachers’ pockets.***[see note below]
  • Next year’s state budget gap of at least $7.5 billion cannot be closed without further cuts in education aid, which is one-third of state-funded expenditures.  In short, schools can’t put off the inevitable, even if Schumer & Co. would like to pretend they can.

Congressional Republicans who opposed the latest stimulus measure are right about this much: the new stimulus package, including funds which must be spent to rehire teachers or sustain current payrolls, is an enormous gift by congressional Democrats to their allies in public employee unions.   It will vindicate the recalcitrance of teacher unions in places like Yonkers, where the superintendent of schools this year offered union members one-year contract extension in exchange for a wage freeze that would save $16.5 million, enough to preserve hundreds of jobs slated for elimination.   The union president called the overture a “nonstarter.”  So the Yonkers teachers have pocketed their 3 percent base pay raises for 2010-11–on top of 12.5 percent in base pay increases over the last three years–and the district will use federal aid to restore, for one more year, some of teaching positions it still will not be able to pay for a year from now.

Lt. Gov. Richard Ravitch pointed out in a Wall Street Journal op-ed earlier this year that federal stimulus aid had come with strings attached that actually prevent states from economizing in areas such as education and health care.   “The federal stimulus has led states to increase overall spending in these core areas,” he wrote, “which in effect has only raised the height of the cliff from which state spending will fall if stimulus funds evaporate.”

The cliff just got raised a little higher.

Some “re$cue.”

** Bloomberg issued a statement Wednesday estimating the city’s share of added federal education aid at $200 million.  Combined with $400 million in projected additional Federal Medicaid Assistance (FMAP), he added, the total “is equal to the total funding assumed in the City’s budget based on the original FMAP extension legislation.”  In other words, treating the money as fungible, he is not immediately conceding its use for salary enhancements.   The United Federation of Teachers so far has had nothing to say on the subject.

P.S. — Elsewhere around the country, Education Intelligence Agency reports, school districts were already rescinding teacher layoff notices before the latest round of K-12 stimulus funding was resurrected by this week’s Senate vote.  For added political perspective on the issue, see The Foundry.

PPS — Here is the language of the “state fiscal relief and other provisions” cleared for approval in the Senate.  Note: education funds “may be used only for compensation and benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services,” and cannot be used by states to build up rainy-day reserves or retire debt.  They really want to make sure the dough goes directly to teachers.

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