New York’s Sky-High Public School Spending

It doesn’t even get much of a mention in the NYC press anymore, but the education finance data collected by the U.S. Census Bureau and released each year shows that New York State’s public school spending per student is sky high, one of the biggest reasons why New York has the highest state and local tax burden on residents and most businesses in the U.S. The Bureau’s report mostly includes data at the state level, but it releases far more detailed data in spreadsheets. In my compilation of the detailed data for FY 2012, FY 2002, and FY 1992 (which includes data for every school district in New York and New Jersey, and which you can find here),

https://larrylittlefield.wordpress.com/2014/05/28/census-of-governments-public-school-finance-data-fy-2012-2002-and-1992/

I show that New York State’s public school spending is sky high even when it is marked down in Downstate New York to adjust for the higher average private sector wage and cost of living here. It is sky high not only compared with the U.S. average and states like California, North Carolina and Colorado (let alone Tennessee and Oklahoma), but also compared with adjacent Northeastern states such as New Jersey, Connecticut, and Massachusetts, states reputed to have good schools. And it is sky high not only in the Downstate Suburbs, but also in Upstate New York and, in a change from the past, New York City.

Public school spending has soared in New York City, coming off the lows when the city’s schools were underfunded in part because the state aid formula discriminated against its children. The current level of spending seems almost unimaginable for those who have followed the data in the past and still do so today. Just on instructional (mostly teachers) wages, salaries, and benefits, in FY 2012 New York City spent $13,627 per student – or $272,536 per 20 students – even though for most of the city’s children class sizes were far higher. And in reality the cost of the city’s teachers was even higher, because the city was underfunding its teacher pension plan, which is deep in the hole as a result of all of the retroactive pension increases over the years, and deferring costs to the future. Despite that sky-high level of spending, however, for a substantial minority of teachers egged on by the United Federation of Teachers (and thanks the way the union has maneuvered to have it distributed), all it bought was an attitude of resentment at how little they were paid. In the late 1990s, when spending levels were far, far lower, the courts had found (in the Campaign for Fiscal Equity lawsuit) that the city’s schools were so bad they violated the state constitution. But in the most recent Mayoral campaign, despite this massive increase in spending every candidate but one asserted that the city’s schools were no better than they were in the 1990s. Spending has soared with nothing in return, and this is so out of hand as to represent a social injustice. We’ve been robbed. A series of charts and commentary of public school finance over the years may be found below.

Let me stress again that while I am providing charts and commentary, what I’d really like is for people to click on the link above, download the spreadsheets, and look at the tables. This is going to be a long post with 15 or so charts, but there is more information in the tables than I could ever chart and write about in my spare time. In fact with a little more investigation there is enough information for a book, not a post. In particular, if the reader is from a part of New York State or New Jersey outside New York City, know that data for your school district – adjusted for the cost of living in your area – is available in those spreadsheets. The analysis you will see here could be repeated for other areas. Let’s start that analysis with public school spending per student by category in the U.S., different areas of NY State and New Jersey in FY 2012.

One difference between my compilation of the data the Census Bureau’s report is that I adjust per-student spending downward, relative to the U.S. average, in high cost Downstate New York, New Jersey, and elsewhere in the Northeast, based on average private sector wages (excluding the overpaid finance sector). In theory I could similarly adjust the per student spending in Upstate New York upward, since the average private sector worker there gets paid less than the average private sector worker in the U.S. and housing costs are commensurately below average, but I choose not to do so. So do not believe that I exaggerate how high public school spending has become in New York. In the chart below the unadjusted data is on the right, with the adjusted data on the left.

While I provide spreadsheets with data for all school districts, for charts I aggregate the data for New York State into four regions: New York City, the Downstate Suburbs [Nassau, Suffolk, Westchester, Rockland, Putnam], the Upstate Urban Counties [Albany, Broome (Binghamton), Duchess, Erie (Buffalo), Monroe (Rochester), Niagara, Oneida Utica), Onondaga (Syracuse), Orange, Rensselaer (Troy), Saratoga and Schenectady] and the “Rest of New York State,” a mostly rural and small town area that also includes small cities such as Elmira, Jamestown, Cortland, Oneonta, Amsterdam, etc.

Chart 1

Even with an adjustment for the cost of living, New York’s school spending per student is sky high. In FY 2012 public school spending per student averaged $12,023 in the U.S. as a whole, compared with $22,846 in New York City, $23,642 in the Downstate suburbs, $18,171 in the Upstate Urban Counties, and $19,262 in the Rest of New York State. With the downward adjustment for the cost of living New York City’s spending falls to $17,835 per student, less than in Upstate New York but still 48.3% higher than the U.S. average. The figure for the Downstate Suburbs is reduced to $18,456. From here on the analysis will generally use the adjusted figures.

Chart 2

It is perhaps not a surprise that New York’s spending is higher than the U.S. average, because the U.S. average includes states where the quality of education is far lower than would be acceptable in the portion of New York State outside New York City. Yet New York’s public school spending is also sky-high relative to other parts of the high-tax, education-oriented Northeast. The $18,171 per student spent in the Upstate Urban Counties, $19,262 in the Rest of New York State, $17,835 in New York City (adjusted) and $18,456 in the Downstate Suburbs (adjusted) compares with just $15,554 in New Jersey (adjusted), $15,188 in Connecticut (adjusted), and $12,809 in Massachusetts (adjusted). These states have schools that are, or average, far better than those of New York City and as good as those in other parts of New York State.

Spending per student by category varies by individual school district, but there were no districts in New York State that were below the U.S. average. The lowest spending in the state was once again in the Victor Central school district upstate at $12,424 per student. There were some districts in New Jersey below the U.S. average after adjustment, but most were in South Jersey, and were I do a more specific markdown of spending based on the cost of living for different parts of that state, the markdown would be lower there. And as a result most of those districts would probably be above U.S. average as well.

Going back to Chart 2, the level of New York City’s total instructional (mostly teacher) wages, salaries and benefits is shown by the black horizontal line. Even adjusted downward for the cost of living it still totals $10,638 per student, which means that in the aggregate the city’s teachers were paid 87.6% more per student than the $5,672 per student for all teachers in the U.S. And far more than the $7,111 per student for New Jersey teachers, the $7,160 for Connecticut, and the $6,049 for Massachusetts.

Instructional wages and benefits were below New York City’s level in Upstate New York, at $10,302 per student in the urban counties and $10,547 for the rest, and slightly higher than in New York City in the Downstate Suburbs, at $11,069 per student.  Looking at wages and salaries alone New York City’s instructional spending per student is much higher than the U.S. average, but much lower than the average for the Downstate Suburbs and lower than in Upstate New York. But New York City spends far more on per student on instructional benefits, mostly for the retired, due to political deals cut over the years by the United Federation of Teachers.

Including those retirement benefits New York City’s teacher compensation per student had actually been higher than the average for the Downstate Suburbs in several previous years, but was lower in FY 2012 since NYC’s teachers (like most private sector workers) had not seen raises in cash pay (other than step increases) for a few years. Under the labor contract now up for ratification the amount NYC teachers were paid for FY 2012 and other past years will be retroactively increased. But that increase will show up in future years in Census Bureau data as the money is actually paid.

Speaking of retroactive, one could argue that New Jersey’s spending on teachers was, in reality, much higher in FY 2012 because the teachers were earning pension rights that were not being paid for at the time, but would be paid for in spades later. But the recent refusal by Governor Christie to start paying for those, pensions under a deal he himself had previously agreed to, shows that New Jersey’s total teacher compensation, like New Jersey’s state and local taxes, really was that much lower than teacher compensation in New York. Because New Jersey teachers will likely face additional cuts in their retirement benefits, with many of those currently working perhaps losing their pensions entirely as the pension fund goes into a death spiral. That’s yet another social injustice, with a different victim and victimizer.

Let’s move onto non-instructional costs, with more detail.

Chart 3

New York City’s non-instructional costs per student have always been below the U.S. average if the cost of living was adjusted for, but the gap has closed in recent years. That is because in FY 2012 NYC was spending far more per student than the U.S. average, but about the same amount as other parts of New York State and New Jersey, in two categories: Operation and Maintenance of Plant (custodians) and Student Transportation (in NYC contracts with school bus companies). Even adjusted downward for the cost of living, and despite the fact that the city’s children are packed in to less square footage, the city’s spending on Operation and Maintenance of Plant, at $1,482 per student, far exceeded the U.S. average of $989. Other parts of the state were also relatively high in this category.

In addition, despite falling enrollment (but still with overcrowding) the city was also spending more capital dollars per student than average in FY 2012, at $1,665 compared with the U.S. average of $1,040.  Some of that is a catch up from the years when the city’s schools were underfunded.

New York City’s children are far more likely to walk to school, and far less likely to ride a school bus, than children elsewhere in the U.S. Despite this, however, the city’s spending on Student Transportation was $878 per student (adjusted) in FY 2012, far above the U.S. average of $473. We’ll see if Mayor Bloomberg’s confrontation with the school bus industry before he left office yields any savings. Spending in the Operation and Maintenance of Plant and Student Transportation categories was also sky-high compared with the U.S. average in other parts of New York State. Spending on Food Services was closer to the U.S. average in New York, with a cost of living adjustment included, and similar to the U.S. average in other parts of New York State.

New York City is very different from other parts of New York State – and far below the U.S. average – with regard to per student spending in the other non-instructional categories: Pupil Support, Instructional Staff Support, General Administration (ie. the central, Office of the Superintendent staff) and School Administration. In Chart 3 these are shown above the dotted line. For these services combined the U.S average was $1,824 spent per student in FY 2012. New York City (adjusted) spent just $625, or about one third as much. Spending on these categories was much higher than the U.S. average elsewhere in New York State, at $2,651 in the Downstate Suburbs, $2,547 in the Upstate Urban Counties, and $2,783 in the Rest of New York State. New Jersey was also very high at $2,783 per student. Such spending was above the U.S. average, but not excessively so, in Connecticut and Massachusetts at $2,184 and $2,103 per student respectively.

These differences in spending may represent differences in actual education. The city’s low spending in the category may also be the result of work done by New York City’s highly compensated (in retirement benefits, unless they were hired recently) teachers, but done by support staff elsewhere. The high spending elsewhere in New York State may be nothing but a soft form of graft, getting friends, relatives and others onto the payroll and into the pension system. One thing for sure: the money NYC parents are pushed to donate to the PTA so their kid’s high school can afford to hire guidance counselors shows up in the Bureau’s data, and is not extra.

New York City’s school spending is now sky-high because it has gone up a great deal in the past decade, a period that corresponds roughly with the Bloomberg Administration.

Chart 4

Despite “No Child Left Behind,” despite an emphasis during the 2000s on paying teachers better and spending more on schools (allegedly in return for better outcomes and more accountability), despite declining enrollment (which should have made higher spending per student affordable), and despite rising retirement costs pushing education spending up uncontrollably, total U.S. public school spending per student increased just 4.2% from FY 2002 to FY 2012, after adjustment for inflation. The increases early in that period were nearly offset by cuts during the Great Recession. And even as the economy recovers and tax revenues rise in states such as California, most of the increase will have to be used to pay for retirement benefits that underfunded and/or retroactively increased in the past, not to restore services in the classroom. Many school districts, from Chicago to Philadelphia to Los Angeles, face the kind of educational disaster New York City faced in the 1970s rather than the bright hopes of the early 2000s. The situation being faced by teachers and schools in the rest of the country is much different that those of New York’s teachers and schools.

New York City hasn’t experienced a repeat of the 1970s disaster – yet. It’s total spending per student soared 36.9% from FY 2002 to FY 2012. The already large spending gap between New York State and the rest of the U.S grew larger in general. The increases were 21.3% for the Downstate Suburbs, 22.7% for the Upstate Urban Counties, 12.0% for the Rest of New York State, 16.8% for New Jersey, 27.2% for Connecticut, and 7.6% for Massachusetts, a state with a property tax cap that limited the ability of school districts to cash in on the housing bubble.

The large increases in New York State took place despite the fact that public school spending was not low in New York City, and was already sky high in the rest of New York State, in FY 2002 (note that in the next chart the same scale and color scheme is used as in Chart 2, and the figures for FY 2002 have been adjusted upward into $2012).

Chart 5

Focusing in on instructional wages and benefits New York City, once again shown by the horizontal black line, these averaged $7,448 per student in $2012 adjusted for the cost of living. That was lower than the already sky-high averages of $8,354 in the Downstate Suburbs, $8,208 in the Upstate Urban Counties, and $8,397 in the Rest of New York State. But NYC was already 39.0% higher than the U.S. average of $5,359 (compared with 87.5% above the U.S. average in FY 2012), and well above the $5,979 in New Jersey, the $5,888 in Connecticut, and the $5,316 in Massachusetts.

Chart 6

With regard to non-instructional, one finds that New York City was lower relative to the U.S. average in FY 2002 – under the infamous Board of Education at 110 Livingston Street — than it was in FY 2012 under Bloomberg’s Mayoral Control. NYC Pupil Support, Instructional Support, General Administration and School Administration spending per student was already really low. NYC’s spending on Operation and Maintenance of Plant and Student Transportation was only slightly higher per student than the U.S. average back then, rather than far higher. Of course back then NYC school custodians didn’t actually clean and maintain the buildings and now perhaps they do, so there is that. Non-instructional spending was already high across the board in other parts of New York State in FY 2002.

Now lets examine the inflation-adjusted change in spending by category from FY 2002 to FY 2012, to see how priorities have shifted. Note that the color scheme is the same.

Chart 8

Despite all the emphasis on education and teachers during the 2000s, adjusted for inflation U.S. instructional wages and salaries per student ended up $64 lower in FY 2012 than they had been in FY 2002. Which is not surprising, given that the income of most Americans fell during that time period, even though 2002 (like 2012) was a recession year. New York City’s teachers, however, got $1,009 more per student in wages and salaries FY 2012 than in FY 2002, or $20,180 per 20 students. The increase in the Downstate Suburbs was even higher at $1,121 per student. The increases were $419 per student in the Upstate Urban Counties, $386 in the Rest of New York State, $594 in New Jersey, $702 in Connecticut, and $233 in Massachusetts.

The category in which New York City really increased its spending, however, is the very category on which it had already been spending more to begin with: benefits in general, and retirement benefits in particular. As I chronicled in this post,

https://larrylittlefield.wordpress.com/2013/12/08/teacher-pensions-the-road-to-ruin-in-new-jersey-and-new-york-city-but-not-yet-the-rest-of-new-york-state/

which will be updated soon with additional data, New York City’s teachers unions scored a series of extremely expensive retroactive pension increases, each of which increased payouts by the city’s teacher retirement pension fund by about 30.0% more than inflation – both in year of enactment and for every year thereafter into the future. The cost of these increases has multiplied by each other.

For the purposes of public school spending data, however, payments into the pension fund, not payments out by the pension fund, are counted as “spending.” The unions and politicians colluded to fraudulently pretend all those pension increases “cost nothing” even as the NYC teacher pension fund (and other pension funds) got deep in the hole. Pension costs are now exploding, in New York City where not all of them are yet being paid, and elsewhere where very little of money required is being paid.

Mayor Bloomberg called costs like these “uncontrollable costs.” Because he himself did one more massive pension increased deal with the United Federation of Teachers in 2008, however, one has to conclude that what the data shows is not something his administration was stuck with, but also indicative of HIS priorities, and his values, along with the values and priorities unions and the rest of the politicians. NYC’s inflation-adjusted instructional benefits per student increased by $2,181 per student from FY 2002 to FY 2012, or $26,172 per 20 students. That is a massive increase in teacher compensation that the working teachers (as opposed to the retired teachers) do not see, and younger teachers (put into a lower pension tier) will not get. Which is just the way the UFT likes it. I put these costs in the royal purple to remind the serfs who the overlords are.

Moreover, spending in this category will have to go up a lot more if the NYC teacher pension fund is to get out of the hole. Particularly since the new bonus pools for teachers in the new contract the UFT just scored will presumably be used by teachers close to retirement to spike their pensions. An increase of $5,000 for a couple years, allegedly in return for more work, would mean $2,500 more per year for another 25 or 30 years in retirement for those in Tier IV, with nothing having been put aside in the past to pay for it. Don’t expect the City and State Comptrollers and the Independent Budget Office to track this to make sure it doesn’t happen. It seems inevitable.

Retroactive pension increases for teachers in other parts of New York State were not as frequent or as costly, but pension costs are increasing there as well. And in Upstate New York enrollments are dropping even as pension costs are increasing. The result was an inflation-adjusted increase in instructional benefits of $1,594 per student in the Downstate Suburbs, $1,675 in the Upstate Urban Counties, and $1,763 in the Rest of New York State from FY 2002 to FY 2012. The U.S. increase was just $83, and the increases were $539 for New Jersey, $571 for Connecticut, and $501 for Massachusetts, but that may be because other states are underfunding their teacher pension plans even more than New York. Unlike the New York City teacher pension fund, the pension fund for teachers in the other parts of New York State is relatively well funded.

In New York City there was also a significant increase in Instructional Spending other than teacher compensation, at about $500 per student from FY 2002 to FY 2012. One wonders what that was. Information technology? Teacher training contracts? New teaching materials for the Common Core?

One possibility is a mistake. If a charter school is chartered by a private company, the Census Bureau excludes its enrollment from the public school count, and puts its funding in a separate “Charter School Payments” field that I have excluded from this per student spending tabulation. But for public charter schools, the vast majority in New York City, the enrollment is included and the spending is supposed to be broken out into all the detailed categories. If public charter school spending wasn’t correctly broken down into categories for NYC, and instead was just lumped into “Other Instructional,” then in the regular district schools NYC’s per student spending in all of the other categories was in reality higher than it appears in this data. Because (for example) teacher wages and salaries for the district schools alone is being divided by fall enrollment including those attending the public charter schools.

What about non-instructional?

Chart 9

The data shows that New York City’s per-student spending on Operation and Maintenance of Plant and on Student Transportation soared during the Bloomberg Administration.   As in the case of instructional spending, the cost of pensions played a leading role: total NYC non-instructional spending increased by $204 per student for wages and salaries, $368 per student for employee benefits, and $396 per student otherwise. Recall that the custodial services at some schools were contracted out during the Bloomberg years.

Meanwhile, NYC’s per student spending on Pupil Support and Instructional Staff Support, very low in FY 2002, changed little from that year to FY 2012. With the community school districts dissolved, some administrative services outsourced, and others centralized, NYC’s per student spending on General Administration – never as high as it was reputed to be – was cut by more than half. There has been some complaint in the education blogosphere about the level of support provided to schools by central staff under the Bloomberg Administration’s reorganization. Given that spending on that central staff is a fraction of the U.S. average per student and was cut in half over a decade, the complaints seem unreasonable.

Some administrative tasks were turned over to individual schools, and with the subdivision of large schools into small schools there are now more schools with more principals’ offices in New York City. Because of that, and because even if the number of people working in the “School Administration” category was unchanged one would have expected per-student spending to soar due to falling enrollment and soaring costs for retired administrators, I might have expected an increase here. Instead NYC spending per student in the School Administration category was unchanged, adjusted for inflation, from FY 2002 to FY 2012. That means the number of in-school administrators must have fallen sharply as well. The accusation by the UFT during the past few years that in-school services were being cut due to soaring NYC administrative costs (rather than soaring pension costs) is just dishonest disinformation.

On the other hand, administrative and support spending per student did in fact soar in other parts of New York State, where they had been high to begin. The increase was in part a very expensive “job program” extending through the Pataki years, funded by rising state aid via the STAR program. And in part the consequence of a static number of school districts and administrative and support staff despite plunging student enrollment in Upstate New York. Both these trends may have ended recently and gone into reverse, as I noted here.

https://larrylittlefield.wordpress.com/2014/03/18/bls-local-government-employment-data-1990-to-2013/

So how was New York’s surge of per student spending in general, and that of New York City in particular, paid for?

Chart 10

Despite the Campaign for Fiscal Equity Lawsuit, the answer is not a large percentage increase in state funding for NYC schools. Although the New York State legislature passes the pension increases that have caused spending on teacher pensions to soar, the state only provides school aid for actual education. Public education revenues from New York State increased 15.6% per student for New York City and 13.5% statewide from FY 2002 to FY 2012, a substantial increase but well below the increase in spending. The increases were 10.3% for the Downstate Suburbs, about the same as the 10.8% in New Jersey, 18.0% in the Upstate Urban Counties and 13.5% for the Rest of New York State. School districts got much less support from state governments outside the Northeast. State funding per student fell over the decade for the U.S. as a whole, adjusted for inflation. Which means bigger decreases outside the Northeast.

In general, however, New York’s local governments, including New York City, had to cover the cost of the pension deals. As a result New York City’s taxpayers were kicking in more than twice as much in local taxes and other revenues per student in FY 2012 as the had been in FY 2002, an incredible increase of 126.6%. That is an amazing increase of $7,058 per student adjusted for inflation without and adjustment for the cost of living, and still an increase of $5,565 per student when marked downward for comparison with the U.S. average.   The increase in NYC local government-funded school spending from FY 2002 to FY 2012 was nearly as much as total spending per student on instructional wages and benefits in FY 2012 in the U.S. as a whole, at $5,672 per student. NYC was able to pay for this, at least so far, due to an 18.0% property taxes for schools, cuts in spending on other public services relative to education, a cutback in assistance on the poor, and (perhaps only temporarily) the re-inflation of stock market and local housing bubbles due to zero percent interest rates.

In other parts of New York there were also substantial inflation-adjusted per-student increases in local government revenues for education, substantial increases in property taxes at a time of stagnating income, and substantial outrage over those taxes, from FY 2002 to FY 2012. The percentage increases in local government public school revenues per student were 39.6% for the Downstate Suburbs, 38.9% for the Upstate Urban Counties, 47.7% for the Rest of New York State, and 28.3% for New Jersey. Still less than the increase in what New York City taxpayers were paying out for schools.

With “No Child Left Behind” federal public school spending increased substantially across the nation, but it still doesn’t amount to much per student, other than in the poorest places. State and local governments are responsible for most school funding.

Chart 11

As the chart shows, however, the assertion by some advocacy groups that New York State requires even more public school spending per student – because the State of New York isn’t kicking in enough money – did not correspond with the facts in FY 2012. As shown by the horizontal black line in the chart above, even in the mostly affluent Downstate Suburbs, and even adjusted downward for the higher cost of living there, state public school revenues per student ($5,551) nearly matched the U.S. average ($5,609). In other parts of New York State the state aid payments per student were higher at $6,819 in NYC, $9,431 in the Upstate Urban Counties, and $10,996 in the Rest of New York State. In fact by themselves local government public school revenues in NYC, and state revenues in Upstate New York, approximated TOTAL current per student expenditures (excluding capital and interest) in the U.S. as a whole. The average Upstate school district could nearly match the U.S. average in spending per student without a single dollar of local taxes.

The large and expensive increases in inflation-adjusted per student spending from FY 2002 to FY 2012, moreover, followed previous substantial increases from FY 1992 to FY 2002.

Chart 12

But wait a minute!, someone who has been following the data I have produced over the years might object. Aren’t I the same guy who said that NYC school spending was low, and its teachers underpaid, in the past? Didn’t just say it, but showed it? What was I talking about!?

Well for one thing, NYC’s adjusted public school spending per student was much lower than other in parts of New York State and New Jersey 20 years ago in FY 1992, during the Dinkins Administration.

Chart 13

Even then, however, New York City’s total spending per student was above the U.S. average even after adjustment for the cost of living, and its instructional pay and benefits were substantially above the U.S. average. Though mostly because of higher benefits, not higher cash pay. NYC’s cash pay per student was much lower than the rest of the state and New Jersey back in FY 1992.

Moreover with regard to money actually spent in the classroom, spending on teachers was probably much lower than it appears in the charts. As one teacher told me back then, the goal of every teacher was to get out of the classroom into a cushy seniority post. And with the political clout of the United Federation of Teachers unable to provide more money 20 years ago, it provided less work instead, with lots of teachers in out of classroom assignments.

And guess what? Now that the UFT has gotten more money — in exchange for all of its members suffering the indignity of actually teaching — the new labor contract now up for a vote will bring back all those out of classroom assignments for teachers coasting to retirement. Along with higher pay for a “career ladder” that leads to a higher pension. And once it is in the contract it can’t be taken out, except in exchange for even more money that the city does not have. Did Bill DeBlasio and Carmine Farina forget about what that meant for the city’s children, given that resources to replace those teachers in the classroom are not unlimited (despite the record of the past 20 years)? The UFT never forgets – and is always working to shift money to those who are not working and away from those who are, leaving the city to spend more money for less education.

Chart 14

Meanwhile, even back in FY 1992, in the pre-Giuliani days of the infamously corrupt community school districts, the massive bureaucracy at 110 Livingston Street, the mafia-like school custodians, etc., NYC’s non-instructional spending per student was below the U.S. average. Although in many cases very little work was done in exchange for less money.

The real NYC school underfunding was not something that happened in FY 1992 or FY 2002. It was something that happened between, for most of the years between FY 1992 to FY 2002. While NYC is currently benefitting from the cost savings of falling public school enrollment as the “Baby Boom Echo” generation and immigrant children exit the schools, back in the 1990s enrollment was surging nationwide as that large generation entered school. In New York City enrollment increased by 138,700 from the low in 1989 (when the “Baby Bust” generation was in school) to the peak in 1998; the statewide the increase was 313,155 from 1989 to 1999. At the time new teachers were scarce, because it was the smaller “Baby Bust” generation that was leaving school into the strongest job market of the past 40 years. And resources were scarce, because the Northeast had been hit very hard by the early 1990s recession, and New York City and New York State were broke.

So Governor Pataki, Assembly Speaker Sheldon Silver, State Senate Majority Leader Joe Bruno, and Mayor Giuliani decided to triage the independent agencies none of them could be held accountable for – the MTA and the New York City Board of Education – and the people who mattered least politically – New York City’s children. Giuliani and Pataki each cut funding for the city’s schools, with Pataki cutting the NYC’s share of state school aid and setting off the “employment” boom in the already overfunded schools in the rest of New York State.

Chart Long Term School Aid

In FY 1996 NYC accounted for 37.2% of the public school students, but received only 29.6% of the state school aid. The city’s share of state school had been low in the 1960s too, but at the time the city was richer relative to the rest of the state, as evidenced by its residents’ high share of state total state income tax payments. NYC was not as able to fund its own schools in the mid-1990s, when it had one million people on welfare, and its public school spending was cut – given rising enrollment its per student spending crashed.

This was about the time I was figuring out where my kids would attend school. There were 35 kids in the kindergarten down at the local elementary school, where one teacher decided to stop teaching math, and another had been made a “special subject teacher” to get him out of the classroom, and seldom showed up. So we sent our kids to Catholic school. Some of our peers spent the next few years desperately trying to get their kids into one of the “special deal” schools, where an actual education was on offer for those who were “gifted” or had connections. Many others left the city.

We got ripped off, but perhaps if we were willing to pay more in taxes the next generation of city school children would fare better? So I foolishly might have hoped some years ago.

Under pressure from the Campaign for Fiscal Equity Lawsuit New York City’s share of state school aid was eventually restored to something like parity with its share of the state’s public school children. The State of New York is still redistributing education resources away from New York City, but only because (as in the late 1960s and early 1970s) the city’s share of state income tax payments has risen with its economy. Moreover the city’s school spending, and its state aid, had already increased substantially from the mid-1990s lows, to the point where its spending was no longer that low by FY 2002, as the charts showed. Before Mayor Bloomberg even took office. Problem solved, I stopped updating the chart above after FY 2008.

And then NYC’s children were pillaged again, by one more retroactive pension increase in early 2008 that left the NYC teacher pension plan one of the most underfunded in the country, the one Bloomberg Administration public school policy that what will outlive his administration, a deal that will determine the fiscal future of the city’s education system for decades.

 

Chart 2

And with teacher pension costs (and other pension costs) soaring in a recession, once again in recent years there have been instances of more than 30 kids in a kindergarten class in New York City. Despite a level of per student spending on teachers that is so high it blows my mind. What did the city’s children get for all that money?

I guess one might say that other than public relations, there was never any chance that the city would get OK schools in exchange for the vast increase in spending. That increase was really just spreading the wealth among interest groups. Hasn’t the city boomed in the past few years? With fewer children in public schools, and another million people paying taxes, shouldn’t all this wealth be shared with the teachers? In reality, by hook and by crook, the UFT has worked the system to “share” more than the people who will pay for it actually have. Let’s compare the increase in NYC instructional wages and benefits per student from FY 2002 to FY 2012, two comparable (bad) economic years, with various measures of the income available to pay for it. Once again, the oligarchies are in the royal purple, with the serfs in black and the real losers in yellow (so as not to blot out the category titles).

Chart 15

In Downstate New York, according to employment and wages data from the Bureau of Labor Statistics, excluding the overpaid Finance and Insurance sector private sector payroll per employee increased 5.1% from 2002 to 2012 when adjusted for inflation. That increase and the 5.5% increase for the private sector in U.S. as a whole are not as good s they sound. Because employment levels dropped, and fewer low-paid private sector workers had jobs in 2012 compared with 2002, that pushed up the average pay for those who remained employed. Meanwhile payroll per worker in Downstate New York’s Finance and Insurance sector, already unjustifiably high in 2002, increased another 27.7% from that year to 2012. That sector didn’t provide everyone else with much of anything in exchange for all that extra money either. So who are New York City’s educators in solidarity with, the serfs or the pirates of Wall Street?

While Downstate New York cash pay per employee increased 5.1% in real dollars from 2002 to 2012, NYC instructional wages and salaries per student increased by 17.9%. Since teacher pay was increased by 20.0% instantly in Mayor Bloomberg’s first contract with the UFT, that increase was not enough to reduce class size, but this was consistent with Bloomberg’s emphasis on better-paid teachers rather than lower class sizes. And more cash pay for teachers is the increase in teacher compensation most New Yorkers wanted, even if it hurt them to pay for it. It is the increase I wanted, although subsequently starting pay has been increased less than the pay for those cashing in and moving out – limiting the city’s ability to recruit quality teachers even at higher pay levels.

What no one wanted, what we were lied to about, what was a fraud, was the 121.1% increase in inflation-adjusted instructional benefits per teacher, as a result of all the retroactive pension increases agreed to in secret deals and subsequently described as “costing nothing.” No one would have agreed to pay vastly more just so New York City’s teachers, who already had more generous retirement benefits that most of the taxpayers funding them, would have more generous retirement benefits still. Looking at total compensation, the increase per student for NYC teachers is 42.8% over a decade, more than Wall Street and vastly more than the increase for the in pay for the serfs.

Looking at other income measures, from 2002 to 2012 per capita income is up by 15.5% adjusted for inflation in Manhattan (to $119,347), up by 19.7% in the other boroughs (to $41,451), and up by 7.8% in the United States (to $43,735) according to the Bureau of Economic Analysis. Mostly because there are fewer non-earning young capitas (and school students) to bring the average down, given demographic trends. The BEA per capita income data includes a rough estimate of benefits well as cash wages and salaries. Most of the increases went to those at the top, but even including them these gains are far less than the increase in NYC instructional compensation per student during the same years.

The Census Bureau’s median household income data shows an inflation-adjusted gain of 17.3% in Brooklyn, 20.9% in Manhattan, and 12.5% in Queens, mostly because soaring real estate prices and a large increase in population relative to the housing stock have crowded multiple young wage earners into shared households. They may not earn much individually, but they earn more in total that the household that preceded them in the housing unit. In the Bronx and Staten Island, where the influx of young workers is less pronounced, median household income is down 3.3% and up 4.0% respectively. Without the huge influx of young workers seen in NYC median household income fell 5.1%, adjusted for inflation, from 2002 to 2012 in the U.S. as a whole and increased just 3.3% in New York State as a whole, all while that massive increase in public school spending had to be carried.

This is a remarkable tale. That the city’s schools are anything less than great top to bottom, given this huge level of spending, is a social injustice. Given the arrogance, entitlement and contempt shown by the leader of the United Federation of Teachers over the past 18 months toward the people of New York City and State, it’s an outrage.

Now, as been the case over and over again in the past, I’m sure there will be a big propaganda push for a few years to deceive New Yorkers into believing that everyone is working together and doing their best to provide a good education for the city’s children. But we heard the same thing from the Giuliani Administration after he got his hand-picked Chancellor Rudy Crew in, until the circumstances required an admission that the schools were awful. And from UFT head Randi Weingarten and Mayor Mike Bloomberg, up until the UFT got the massive pension increase it wanted in 2008, and then any idea that the city and its children deserved any better (or at least not worse) went out the window. And demands for even more in exchange for even less, now partially met, took its place.

Those of us who had advocated for more school spending in the past have an obligation to tell the truth. We’ve been robbed, over and over, it won’t change, and it’s time to face up to that reality. Until we do they’ll just take more and more, over and above what we are facing once what has been taken in the past can no longer be deferred and hidden until the further future.

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One thought on “New York’s Sky-High Public School Spending

  1. larrylittlefield Post author

    One thought: If the reader is interested in the income trend in the last chart above, they might want to read a series of posts I wrote a while back specifically on that subject. Search for “Has New York City Recovered From the 1970s,” my name, and “mean income,” median income,” and “poverty.”

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