As I have described in as many ways as I can, an inevitably rising share of public spending will be going to debts run up by past generations, rich pension and other retiree benefits for those cashing in and moving out, workers with seniority who are no longer required to work, and those in places like New York’s suburbs and upstate New York who need a “job” to be able to live the way they “deserve.” At the federal level, thoughtful people of all political views understand that the “debt” implied by having younger generations provided with the same health care and Social Security benefits that older generations have handed themselves (but were unwilling to pay for when working) is so high that it can never be paid. The financial debts are on top of that. If you live in New York State, the situation is actually much worse, because it is necessary to anticipate future increases in benefits for those who are already in on the deals, on top of those deals that have already occurred. At the same time, more and more potential tax revenues are lost to special tax deals and breaks. And as a result of similar self-dealing and future-selling in the private and personal sectors, people are about to get a whole lot worse off, reducing tax revenues overall. Actual public services, benefits, and infrastructure will be crushed between these two pincers.
Once this accepted as inevitable, because the people who benefit from current trends and conditions have unchecked power and no conscience, the question is “what will life in New York City be like twenty years from now.” What will it be like for your children if they stay here? I’ve written about transportation — how they’d better learn to get around by bike and telecommute because the bus system will melt away through a series of budget crises, the subway system will become increasingly unreliable due to disinvestment (with entire lines shut down for years when a critical component fails until the money is scrounged for a temporary fix), driving expensive, parking impossible, and the only other choice illegal but tolerated uninsured private vans operated by drivers of questionable ability. This post is about education — I’ll get to health care later.
Update: This is another reprise of a post from 2008. Before I get to education, a brief word about the overall trend. As predicted, soaring debt and retirement costs and falling tax revenues have led to decreases in public services throughout the country. Everywhere state and local government employment is falling relative to population, and in many places public services have been cut back severely. In some they have nearly collapsed. Some localities have gone bankrupt, others are bankrupt in all but name, and still others will follow. It would be worse except that states and localities from New Jersey to California and Illinois to Texas have postponed, but increased, some of the pain by going ever deeper into the hole.
This is not just a cyclical problem, not just the usual temporary result of a typical recession. Even with another stock market bubble, and in an economy that is about as good as it gets in our post-debt bubble, post labor force participation peak (as the Baby Boom retires) economy, fiscal crises are ongoing in many parts of the country. With the kind of downward spiral of tax increases and service cuts experienced by older central cities in the 1970s now taking place in some of the suburbs and even entire states. The two pinchers are in operation – public services aren’t being cut to reduce taxes. In many places public services cuts are coming despite tax increases, as the money is sucked out by special interests and pulled away by the past.
Here in New York City, we have thus far been spared the worst by a few countervailing trends. First an asset price boom, created not by underlying value but rather by zero interest rates, has pumped up the capital gains of the rich, the profits of Wall Street firms, and the value of New York City property, leading to another temporary boom in New York’s city and state real estate transfer tax, corporate and personal income revenues. I wouldn’t count on this continuing. But additional permanent, irrevocable increases in compensation for NYC public employees are taking plans on the assumption that it will continue.
Second, the city has seen an influx of young people educated elsewhere (in places that have, or at least had, decent schools). They pay taxes, don’t commit crimes, generally don’t have kids in the public schools, require very little in social services, and are a fiscal cash cow for the city and state governments.
Third, while the ratio of public employment to population has fallen here as well, that is mostly due to higher population rather than falling public employment. Thus NYC services are thus far declining mostly due to increased crowding – larger class sizes, more crowded trains and buses, etc. — as services are reduced slightly, and certainly not increased, despite population growth. Rather than a wholesale collapse. In this fiscal environment, a stagnant, aging population exacerbates the problem. Today that is an issue for many suburbs, not New York City.
Given our high tax burden, some many have expected public services to be magically upgraded once the “progressives” took City Hall, but of course that hasn’t happened, and won’t happen. In fact with public employees and contractors continuing to get richer and richer relative to most New Yorkers, and with unmet needs in organizations such as the NYC Housing Authority and Health and Hospitals Corporation festering in the background, a much faster pace of public services deterioration is only an asset price correction away here.
Now back to the post from six years ago.
I have described the future of public services and benefits as “privatization” and “placardization.”
By placardization, I mean that to the extent that public sector has anything worthwhile to offer, it will not be able to afford to offer it universally, and it will be allocated instead to insiders and those with connections by a variety of means. The way scarce public on-street parking is allocated to those with the connections to get placards, legal and illegal.
By “privatization” I do not mean that the government will provide universal, equal benefits by hiring private contractors rather than public employees, as it does in the Medicare program or under a school voucher program. I mean that those who have the resources to provide what were once public services for themselves will be permitted to do so (as long as they are grateful for that permission), while those who lack such resources will be left to do without. In other words, we’re heading for a pre-Progressive era level of public services and benefits, at a Swedish tax rate (because those who matter have received Swedish-plus benefits while paying Reaganite taxes or less).
In education, the signposts to the future are clear in the present — and the past. New York City’s public schools have historically been placardized, with islands of adequacy and even excellence amidst seas of awfulness. As resources once again become scarce expect the recent emphasis on “fair” school funding by school and “equitable” admissions to “special” programs, opposed by both the Teacher’s Union and by well-connected parents, to be quietly reversed. The union will then be able to continue to offer its increasingly underpaid younger members a choice of schools with higher expectations, if they insist on working, and schools with virtually no expectations, where they can collect a paycheck before collecting a pension.
If some of those union members choose to live in the city, expect them to send their own children to the high expectations schools, along with those elected officials who do not choose private schools for their own children. In the high-expectation schools, limited public funding will be supplemented by “voluntary” contributions by parents, of their time and expertise. There has been some attempt to rein that in during the current (Bloomberg) administration, to limit the disparity between schools where parents have more money and schools where parents have less. That will end.
In the low expectations schools, meanwhile, “corporate” pressure on teachers to actually provide a reasonable foundation in life for disadvantaged children will ebb away, backed by a convenient bi-partisan ideological consensus that it is hopeless to try in any event. Expect social promotion, which is really fiscal promotion, to re-emerge. Also expected to re-emerge, in exchange for diminished pay for new hires in a fiscal crisis driven by higher pension spending — fewer hours worked for teachers, and a rule that principals are not allowed to “disrespect” them by asking to see their teaching materials, view their classroom performance, or demand that they give and review homework assignments. Can you say $25,000 per year staring salaries for teachers? Adjust for inflation since similar contracts were signed for police and fire (and, by the way, in case you haven’t noticed at the current pace that would be quite an adjustment), that’s what you are going to get. As for principals, that position will be what it used to be — an office for well-connected time-servers to hide for a year or two at a higher salary to boost their pension.
“High stakes testing” will diminish, and programs such as “credit recovery” will expand. Under that program, according to the New York Times, just completing a few essays is enough to earn a high school credit for those who are behind. Today they are behind because they skip school. Tomorrow they may be behind because their school only provides a series of uncertified low-wage teachers, rather than one good one, as in many New York City schools at the end of the last millennium. “Throughout the city, an ad hoc system of helping students like Mr. Bunyan over the hump is taking root in public high schools, sometimes over the protests of teachers, who call credit recovery programs a poor substitute for classroom learning and say they ultimately devalue the diploma. In interviews, teachers or principals at more than a dozen schools said the programs ranged from five-day crunch sessions over school breaks, to interactive computer programs culminating in an online test, to independent study packets — and varied in quality.”
What I have described is merely a return to the past — to the last time New York City’s teachers were allowed to retire at age 55 after just 25 years of work leaving much less money for the classroom, in the 1970s. There are, however, a couple of things that have changed. First, back when the conditions and expectations I have just described were common and accepted, New York City’s public schools were under-funded, but now they are richly funded as I described here. http://www.r8ny.com/blog/larry_littlefield/what_the_campaign_for_fiscal_equity_accomplished.html
I expect the current level of funding will continue, so we will be getting “The Bronx is Burning” schools for “Luxury City” taxes, as money is diverted to the retired. The high spending, and higher taxes that will be necessary to support it in years when Wall Street isn’t massively fleecing the whole world, will be the only remnant of the Bloomberg era. He, in effect, reversed everything else by agreeing to shift money out of the classroom and into a longer retirement.
It is entirely possible if not likely, moreover, that the current generation of state legislators (including the Governor), all of whom are getting on in years, will add another massive pension enhancement (a three-quarter’s pension, say, or retirement at age 50) to the current burden, so if the public school system will not be destroyed by what has already been agreed that just means they are not yet finished. The New York State legislature could vote at 4 am tomorrow to give everyone born before 1958 a pension of $2 million per year and then have all its members retire. That pension would, then, take absolute priority over everything else no matter what — even if every public service and benefit would be eliminated and taxes raised so high that people would have nothing left — and could never, ever be reversed by any subsequent public official or legislature. It would be idiotic not to expect at least some of this to occur, given how much of it already has.
But school spending will not rise further. The recent pension deal was apparently predicated on a UFT assumption it could hold actual education hostage, and that as much money was taken off the top for the retired, some other public service would have to be sacrificed or taxes increased to make up the difference. What the UFT chose not to consider is the possibility that all three levels of government would be so broke that they would have no choice but to allow the gun it has pointed at the children’s head to fire.
The second difference between the future and the 1970s is that more middle-class families without connections and special deals, as a result of other social trends, might choose to live in New York City rather than flee to the suburbs, and the collapsing parochial school system, which was a lifeboat for the past 40 years, will not be there to serve them at anything like the current tuition levels. Here the “privatization” half of the projected future comes in. Of course those who are sufficiently affluent will be able to afford expensive private schools, but there is likely to be a shortage of positions in such schools in addition to, for most families, a shortage of cash to pay for them. For the middle class, the only option — one I thought about myself back in the previous semi-institutional collapse of the mid-1990s when my children were denied the public school education we had paid for — is assisted home schooling.
As I described previously, if New York City’s current instructional spending per child of $11,400 in FY 2006 was used to hire home-based teachers who lived in their neighborhood and taught children in their homes, the way people hire music teachers and tutors, those teachers could be given $136,800 to teach 12 children — for their wages, health insurance, IRA contribution, and teaching materials. If the parents were willing to pay for after-school and summer care, and the teachers were willing to provide it, they could earn additional money over and above the $136,800 just to sit in the park while the kids played or be around as the did their homework or played games. And they would have a class size of 12.
Update: according to the latest Census Bureau data, instructional spending per student in New York City was $15,310 in FY 2012. That is $183,720 per 12 students, and $306,200 per 20 students. Instructional wages and benefits alone equaled $272,500 per 20 students. That was before the recent contract that provided a 20.0% increase in teacher wages, and without the additional increases in pension funding that will be necessary in the future.
There will be no such public funds for homeschoolers in the future, however, because the public retirement, er, school system will drain all the money off. Instead, in addition to facing a much higher tax burden, tomorrow’s parents will have to fund such arrangements themselves.
The Village Voice had a recent article on urban Afro-Americans with decent family lives home schooling their children to get them out of the public schools the powers that be intend for them: “In the 2006–2007 school year, the city’s Department of Education says that 3,654 students in New York were home-schooled. Most are white, but a growing number are African-American. Black parents tend to take their children out of the schools for other than religious reasons, and home schooling groups say black children taught at home are nearly always boys. Like Robinson, some of New York’s parents have concluded that the school system is failing the city’s black boys, and have elected to teach them at home as an alternative.”
At a cost of $1,200 for a full-year curriculum including textbooks and lesson plans from a company called Calvert Education Services, according to the article, one parent mentioned in the article had schooled her children at home, merely having them take quarterly and year-end tests provided by the city’s Department of Education. Grading those tests and tracking the children’s progress is presumably cheaper for the city than actually educating those children itself. As funding for the classroom shrinks, I would expect assisted home schooling to be promoted by the city as a wonderful alternative for families — rather than generally tolerated but frowned upon as is the case today. Employers will also be supportive, given they will need skilled workers in a place where the schools provide a disincentive to live. Expect the NYC public schools to eventually provide their own textbooks and lesson plans to willing parents, with a far more demanding schedule of student assignments than its teachers will be required to assign.
The support of employers for flexible schedules will be critical, because having one parent stay home to educate their children, like a “Gossip Girl” private school, is a luxury few middle class parents will be able to afford — especially at tomorrow’s tax levels. Instead, expect parents to band together in groups of eight to ten, with one parent from each family working a four-day week or nine days in two weeks. These parents could educate the children as a group, they way supplemental child care was provided by the babysitting co-op we were in during our children’s pres-school days. In addition to supervising the children’s education on their non-work days, the parents would each pay perhaps $3,000 per year (in today’s money) for a professional teacher — who wouldn’t get anything like the $136,800 per year described above — to provide assistance. Assisting 25 such children in this way, such a teacher could earn $75,000 per year, with some perhaps under the table in cash or handed over as “gifts.”
Note that I expect tax fraud to be rampant in an era of institutional collapse, and the cash demanded may not be dollars. These arrangements would also be illegal under state laws that make it illegal to provide “child care” for school-age children during school hours, but like NYC’ zoning laws, expect such rules to be un-enforced against organized groups of parents who are supportive of incumbents and the UFT.
The internet and computers will make a decent education outside of a school far more possible in the future than it had been in the past. Yet obviously parents with a college education would be better able to provide a quality assisted home schooling education for their children. For the children of high school dropouts, it’s what would be left of the city’s public schools, which will return to being what they always have been — a ticket to the social landfill. But yuppies, even yuppies with moderate incomes, will continue to be able to raise children in the city as long as they understand the realities and plan accordingly.
There will be no announcement that this is taking place. In fact, there will be a bi-partisan (since the beneficiaries of the institutional collapse are bi-partisan) attempt to gradually rationalize it, as a series of non-decisions allows what is left of the existing system to ebb away, past conditions to return, and present trends to expand. Those who can will adapt. The left can extol these arrangements as a more communal and less corporate and rigid educational system, the right as a more private and less political one — ignoring the fact that those without massive special tax deals would in fact be paying taxes for a public education their children would not receive. (Similarly, the left could extol the future transportation arrangements, which would require a big shrinkage of the city and regional economy from what the transit system supports, as a return to the social virtues of the communal village, while the right could celebrate the decrease in reliance on the socialistic unionized transit system.) Life will be better, those who do not rely on public services and benefits (because they can afford the Gossip Girl schools) or with special access to what is left of them, will tell the rest of us.
In short, I’m declaring total victory for the United Federation of Teachers, retired teachers and those with seniority, older generations, and current members of the New York State legislature — over the city’s children, future teachers (who will be forced to pay dues out of their $25K salaries like it or not), and the future of the city at large. That future will be much diminished but it will not disappear, just as it didn’t disappear in the 1970s. People can and will adapt, and they will be less likely to flee because other parts of the country will be facing similar problems, often for the first time, and without the assets a place like New York City has to adapt to them. But otherwise the game is over, and we might was well move on.
Update: In New York City and elsewhere in New York State, the recession saw class sizes increase, required courses become unavailable, after school activities cut back, and a huge reduction in retirement benefits for future teachers – to less than what Generation Greed had been promised to begin with and in exchange for a higher contribution out of their paychecks. Why?
The UFT and its propaganda arm the Alliance for Quality Education are putting out propaganda that New York’s schools are “underfunded” (and thus New Yorkers are undertaxed, retired public employees who pay nothing aside). But the data says otherwise. Spending is higher in New York State, including New York City, than anywhere else, and taxes are higher relative to income as well. School spending has soared here, mostly for retirement benefits. People may not know the whole story (I assume someone reading this does, having read my data-based posts, so I won’t repeat it) but they are fed up. And that’s why Governor Cuomo is going to be re-elected, even without bothering to go nuclear by providing people with the whole story.
Most of the service cuts NYC’s schools received in the recession have not been reversed. The incoming DeBlasio Administration prioritized universal pre-K – more on that in the next post. And those that have been reversed are likely to be reinstated in the next asset price correction.
What remains in its infancy, however, is the alternative – having the whole so-called “Common Core” along with lesson plans, assignments, tests, etc. up on the internet at an affordable cost. So parents can make sure their children learn what members of the United Federation of Teachers have no obligation to teach them.
To the extent that the so-called education reform movement has a focus, I suggest that it should admit defeat and stop trying to improve the existing public school system. And instead focus on creating alternatives.
And Charter Schools should stop pursuing “co-location” and start going for “no location,” with the teacher living in the neighborhood and teaching 12 students in their own home, with help from the parents, and meeting up with other similar teachers and students in the parks and libraries for socializing. To the extent that the city continues to have parks and libraries available. Perhaps, as conditions deteriorate and as part of their education, the Charter School students could staff the libraries that would otherwise be open fewer hours, and pick up garbage in the parks that would otherwise be left there.
Of course the new city administration has made one big educational improvement. That’s the subject of the next post.