EdVANTAGE Blog

After an all-night session, the Assembly passed a deficit reduction plan and the Senate followed this morning.  Governor Paterson has said he will sign the legislation, even though does not think it goes far enough.

The bills do not include a mid-year reduction in School Aid as sought by the Governor.

The Legislature’s plan does include accelerating the use of $391 million in federal stimulus aid to allow the state to reduce its contribution to School Aid without reducing total aid payments received by school districts.  As with the Deficit Reduction Assessment included in the state budget enacted in April, districts will experience a reduction in state funding and a corresponding restoration from federal stimulus aid.

Using more of the stimulus money this year adds to a future state budget deficit.

As we reported yesterday, the Governor intends to unilaterally withhold some scheduled local aid payments, including School Aid payments in December (see Deal or no deal?  Governor threatening to withhold School Aid payments). Read the rest of this entry »

Legislation accompanying Governor Paterson’s revised Deficit Reduction Plan would require school districts to use any unappropriated, unreserved fund balance to mitigate the impact of his proposed mid-year School Aid cuts.

Given the late point in the school year in which the cuts would be inflicted, it can be expected that many districts would choose to use reserves to offset state aid cuts.

But some districts might be able to accommodate cuts without exhausting reserves and literally forcing them to do so now would ensure tougher budget choices — more layoffs, bigger tax increases — in the budgets they assemble for next year, closer to when State Legislators are running for re-election.

Last year, for example, some districts said unanticipated retirements would have helped them manage proposed mid-year cuts.

The Governor’s proposal also directs that,

In addition, any programmatic reductions undertaken by school districts after any unappropriated unreserved fund balance is fully allocated, as a result of the enactment of the gap elimination adjustment shall, to the extent possible, not impact educational services to children.

School districts would be required to report to the Education Commissioner all budgetary actions they take to accommodate the Governor’s cuts.

In a positive move, the Governor proposes to allow schools to withdraw excess funds from Employee Benefits Accrued Liability Reserve Accounts to help offset proposed mid-year cuts.

He would also expand a tool approved with the 1990 mid-year cuts which allows districts to count an amount of future Lottery Aid equivalent to his proposed cut as revenue received in the current year.

There have been  several news reports over the past day suggesting that a potential state deficit reduction plan was likely to include some actions affecting school districts.

The Albany Times Union Capitol Confidential Blog reported that Legislators were asking to see district-by-district “runs” of possible School Aid cuts.

Today’s Times Union reports, “Many observers suggested a final vote on a deficit reduction plan would come no earlier than Thursday — although one legislative source said it will happen by then or not at all. The main sticking point, said this individual, was between $200 million and $300 million of cuts, mostly to school aid.”

There were other reports that some School Aid payments might be delayed to help the state manage through expected cash flow problems in December.

Today’s Buffalo News reports, “the Legislature’s most powerful Democrat said Tuesday he agreed with Paterson that some school districts can afford to take a hit in their state aid funding in the middle of the year.”

“I think that schools can absorb some cuts,” said Assembly Speaker Sheldon Silver. He would not say how deeply he might be willing to reduce school aid to help trim the state’s $3.2 billion deficit, but said poorer school districts would need to be held harmless.

Senate Democrats have continued to speak out against proposed cuts to education and health care.

Today’s Buffalo News includes a story the state leaders meeting on deficit reduction which was conducted yesterday by conference call.

It includes this passage:

The governor also maintains that nearly three-quarters of school budgets are administrative, and that many districts have money in reserves to cover funding cuts from Albany.

Robert Lowry, deputy director of a state association for school superintendents, noted that the most recent U. S. Census data from 2006 found administrative costs for schools amount to about 5.5 percent of a district’s budget.

Lowry said Paterson’s assertion that “administration” and “administrative” costs account for most of school district budgets is “just not true.”

We endured similar claims by the Governor a year ago.  I first noticed this new one in an online story and called the reporter to try to set the record straight.  I said there was no way administrative expenses  could be calculated to comprise so high a share of total school spending.

I also suggested thinking about a typical elementary school — 20 to 30 teachers, maybe some specialists, a nurse, a librarian, custodians, food service workers and one administrator — the principal.

I followed-up with an email message explaining the quirks in computing administrative spending (depending on how districts or  compiling agencies assign positions and costs) but said Census Bureau data indicates that 5.5 percent of 2006-07 spending in New York State went for administration, including both building-level and central office costs.

I added that the State Education Department reported central administration spending to be 2 percent of total expenditures in 2006-07.  SED does not publish data on building-level administration. SED calculated instructional expenses to be 75.5% of total expenses.

In testimony at an Assembly Ways and Means Committee hearing, I said, “We will not minimize the hardship you face in balancing the state’s finances. Please don’t minimize the challenges confronting school leaders.”

That is my concern with outlandish assertions of administrative spending.  It invites the conclusion that schools can manage cuts without hurting instruction.

In some structures, all employee benefits have been deemed an “administrative” expense.  Counting them as such for schools still wouldn’t get close to the 75 percent figure.  But in any event, those benefits for teachers are part of the cost of delivering instruction.  A district cannot reduce pension costs for teachers on its own, for example, except by eliminating teachers’ jobs.

As to the outcome of that leaders’ meeting, the Buffalo News said “The Legislature’s top Democrat and Republican on Thursday squared off in a new format — a telephone conference call — that featured name calling and motive questioning amid stalled efforts to erase the state’s $3.2 billion deficit.”

The Pine Plains School District in Dutchess County experienced a terrifying incident this morning which thankfully ended without injury. Read the rest of this entry »

Speaking at Hunter College last week, Board of Regents Chancellor Merryl Tisch outlined thoughts on charter school policy that resemble positions taken by the Council.

For example, she called for more charter schools at the high school level and resisted calls to eliminate the state’s cap on the number of charter schools that may be authorized. Read the rest of this entry »

Saturday’s New York Times ran an article titled, “Schools Are Where Stimulus Saved Jobs, New Data Show.”

The Times reported,

On Friday, the Obama administration released the most detailed information yet on the jobs created by the stimulus. Of the 640,239 jobs recipients claimed to have created or saved so far, officials said, more than half — 325,000 — were in education. Most were teachers’ jobs that states said were saved when stimulus money averted a need for layoffs.

Of the 40,620 jobs reported to have been created or saved by the stimulus in New York State, 29,212 were credited to funds channeled through the U.S. Education Department, chiefly jobs in school districts.

But many of those jobs could disappear, with the threat of new state budget cuts, to close either an estimated $3.2 billion deficit this year, or projected gaps in future years. Read the rest of this entry »

The Governor’s Budget Division has now released proposed district-by-district mid-year School Aid reductions.

Available here:  http://www.budget.state.ny.us/budgetFP/0910deficitReductionPlan/SchoolAidReductions.pdf

Or go to www.budget.state.ny.us, then click on “School Aid Reductions”

For more information, see our prior post, directly below.

Reportedly, Governor Paterson will release proposals for mid-year budget reductions tomorrow (Thursday).  Read more here.

Meawhile, State Comptroller Thomas DiNapoli warns that current year budget gap could be larger than the $3 billion figure the Governor has been citing, perhaps as high as $4.1 billion.

More on Thursday.

The Albany Times Union reports on discussions over how to eliminate the deficit in the state’s current year budget.  The gap is estimated at between $2.1 billion and $3 billion.  The TU described the activity as “political football.”

Ping pong seems a more apt analogy.

As authorized by law, the Governor is unilaterally implementing $500 million in cuts to state agencies for supplies, equipment, travel and contractual services (see my Wednesday post, “Update on state budget woes”).

His Budget Division asked has asked legislative counterparts to share plans to close the remaining gap, but Legislative Leaders have responded by calling on the Governor to “go first.”

More Read the rest of this entry »