Why The Powerful Will Never Allow New York State’s School Funding Equity Problem to be Solved

In 1997, according to education finance data from the U.S. Census Bureau, New York City spent $9,371 per student on public schools, which is $13,405 adjusted for inflation into $2012. The average for the downstate suburban counties, similarly adjusted, was much higher at $17,550, but there were differences within the suburbs. The wealthy Great Neck school district spent a stunning $24,510 per student while the less wealthy Elmont district spent just $11,468. “Level up” was the cry of the Campaign for Fiscal Equity Lawsuit at time. Even though New York’s overall school spending was high, any shift of resources from rich districts to poor ones would be a despised “Robin Hood” plan. The state’s schools, it was said, needed more money overall.

So what happened? In 2012 according to the same data source, New York City spent $22,884 per student, nearly as much as Great Neck had spent in 1997 (NYC is spending more, much more than that, now). The average for the downstate suburbs also increased, to $23,914 per student — only slightly more than New York City. Struggling Elmont was also spending more at $19,081 per student, less than the average for the suburbs in 2012 but more than the average for the suburbs in 1997, the spending amount advocates claimed needed to be “leveled up” too. But Great Neck’s spending had soared further, to $28,571 per student, or nearly $10,000 per student more than Elmont. Yet to the teacher’s union, the advocates, and the New York Times, it as if the huge increase in per student spending from 1997 to 2012 never occurred. Despite the fact that the average school spending per child was just $16,076 in Massachusetts in 2012, the Times recently claimed comparatively low spending in poorer districts is the “central crisis in New York State education.” But that is a crisis that the teacher’s union, the advocates, and the Times – and districts like Great Neck – don’t want solved.


One problem with the state’s school funding increase over the past 15 years is that, as part of the complex web of deals what were apparently cut, arrangements were made for all the additional money to go to richer retirements for teachers who were cashing in and moving out. With retirement costs soaring, there have been cuts the classroom – and to the lifetime compensation of new teachers – despite the nation’s highest tax burden. After the 2008 pension deal I pretty much gave up on proposing solutions to the state’s public policy problems, as I became convinced that no good can ever come from the New York State legislature. You want proof that there is no hope? I can show you in four words. Dean Skelos Sheldon Silver.

In this essay, however, I’m going to make an exception and describe a solution to school funding equity in New York.   Not because I believe anyone in Albany would dare to suggest it, let alone adopt it. But rather to show that the problem in politics today is not ideological division and unwillingness to compromise on practical solutions, which is what I keep hearing in the media. It is the capture of our public and private institutions by powerful special interests that expect to move ahead every time tax revenue starts rolling in, and then to be exempted from sacrifice every time the fiscal picture gets worse.

What happens today was explained recently by California Governor Jerry Brown. “There’s endless desires. The way I say it is, first, you have a desire, and then you make it a need, then you make it a right, and pretty soon you got a law. Then as soon as you got a law, you got a lawsuit.” “It’s fair to say people want a new spirit, but they don’t want to pay a lot of money for it!”


For some those endless desires involve interests that want more public spending on themselves. For other interests it is tax cuts, so they can have more money left to spend on themselves individually. But many desire both more spending on themselves and lower taxes for themselves.

That’s in California. Here in New York, based on our vastly higher tax burden, we ARE paying more than enough to fund “a new spirit,” but vested interests with endless desires aren’t giving it to us. Basically there are lots of people who have taken more than their share, and don’t want to give anything back. Some of those people have died off or left, leaving only their burdens behind. Those deals were bi-partisan. The apparent battles over allocating the pain are just for show. And words like “progressive” and “conservative” have been bastardized by the servants of special interests and Generation Greed.

The solution I propose would, in theory, thrill ideological “progressives” and “conservatives,” if they actually believed what they say they do. But not the special interests – the teacher’s unions, the rich, etc – that actually control politics. Thus ideology is NOT the problem.

Simply put, if the differences in local school property taxes between rich school districts and poor school districts are causing inequality, then get rid of local school property taxes. Fund the schools with countywide property taxes instead, with the county executives and legislatures deciding how much to tax, and the proceeds and allocated equally to all districts in the county, on a per student basis. Local school funding per student would be the same in Great Neck and Elmont, in Chappaqua and Mount Vernon, in Schenectady and Niskayuna. Etc.

With this funding scheme at the local level, the STAR program would be eliminated and the state funding formula simplified. A basic state formula would take into account the income of the residents of each county and, to an extent, the higher cost of living downstate, with the goal of each county being able to afford the same school funding with the same tax burden. State funding would make the counties (and New York City) equal, while county funding would make the districts within each county equal.

In addition, more state and federal funding would be directed to school districts and schools based on the number of disabled and disadvantaged students they have, and the additional services those student need.

Now consider what those with different ideologies would theoretically think about this plan.

Wouldn’t this be close to a “progressive” ideal world – based on what the word meant 100 years ago? Per student school funding would be equal within each county, except that the disadvantaged and disabled would get more! And in New York State that equal funding level, based on the current averages, would be sky-high relative to the U.S. average, and the relative to the average for surrounding high-spending states, as I showed here.


How about conservatives?

Right now those in the public education industry – the school districts and the teacher’s union — decide how much those in the public education industry need and deserve. Not someone else that is also concerned with everyone and everything else. And, not surprisingly, in New York they decide they need and deserve more, and more, and more, and more again. You don’t have anyone responsible for the overall tax burden at the local level that is capable of trading off one need against another, and considering the ability of people to pay.

The result is just like what happens when the top executives of corporations have their pay set by their cronies on the boards of directors, after hiring executive pay consultants to compare that pay only with other executives who are paid more, and then assert that they should be paid more still (actually today’s “conservatives” don’t seem to object to that non-free market phenomenon for some reason).

Under my proposal the county executives and legislators, not the school districts and unions, would decide what the fair and reasonable level of school funding is, considering other needs and the overall tax burden. Within a county, school districts would be left to try to make the best use of the equal money they all have. Instead of just trying to outspend each other, and using the 100 most wasteful, gold-plated school districts in the state as the benchmark for the rest, the way the de facto C-suite executives have with executive pay. And if county residents thought their tax burden was unfair, they would have someone to hold accountable. In short, conservatives should rejoice at this proposal.

There are other “progressive” benefits.

Throughout the Northeast and in California, localities use “exclusionary zoning” to keep out new housing that might be affordable to someone other than the wealthy. Because the new residents of those housing units might not pay enough in property taxes to cover the high cost of educating their children, thus leading to higher taxes or service cuts for existing homeowners. Exclusionary zoning is also called “fiscal zoning.”

These restrictions are the reason the affluent, middle class and working poor are so segregated by locality in the so-called “blue states,” and school spending is thus more unequal there than in the so-called “red states.” Why multifamily housing is excluded from so many localities, or highly restricted, unless it is age restricted housing for those age 55 plus (since the state and federal governments cover the huge costs of the seniors). Why those who work in low-wage jobs in affluent towns, and young people who grew up in them, cannot afford to live there.

Fiscal zoning is the reason for the extensive “Mount Laurel” litigation in New Jersey, and the state law 41B zoning over-rides for multifamily housing in Massachusetts. The New York State Court of Appeals allowed the practice to continue in the Village of Belle Terre vs. Boraas in 1974, which was targeted primarily at de facto student housing but had broad implications.

Countywide school funding wouldn’t change race and class attitudes, but it would change the fiscal impact of new housing on property taxes and schools. There would no longer be as much of a reason for Scarsdale and Great Neck to insist that housing affordable to the non-rich be built somewhere else. To the extent that any resulting housing liberalizations would be considered pro-free market, they could be considered “conservative” as well as progressive. In fact, there would be no reason for Great Neck and Scarsdale not to allow kids from other areas to attend their schools, if space were available. Perhaps because their parents worked in town.

So there you have it. School funding equity. A reduction in exclusionary zoning. Outside oversight of school spending and tax levels, with accountability. An incentive to use resources better than the next district, rather than just demanding more. More housing integration, and more free market development. Maybe even more school choice. And ideological win win win win win, right?

Wrong.  There are no NY Democrats who are actually in favor of fiscal equity, and no real conservatives at all.

What those demanding school funding equality actually want is even more school funding, not school funding equality.


“While the 100 wealthiest districts spent on average more than $28,000 in state and local funding per kid in 2012, the 100 poorest districts in the state spent closer to $20,000 per student,” according to the teacher’s union and the “Alliance for Quality Education.” What do they want?

Increase spending on the poorest districts to match the richest. Then increase spending in the richest districts, rather than impose a “Robin Hood” plan. Then increase pensions for those cashing in and moving out. Then demand more money again, because there are school funding inequity and classroom cuts. If “leveling up” was the real goal we’d have done it already.

(Back in the day, to anyone who was listening, I suggested the equivalent of the salary cap used in sports leagues. About a certain maximum, districts would lose one dollar of school aid for each extra dollar they spent, making it cost two dollars. As opposed to the STAR program which directs more money to those who spend more – more for those who have more, the national trend across all issues and institutions).

The interests who say NY schools are “underfunded” don’t want comparisons with other states, or the U.S. average. They don’t want any questions about what people got for huge increase in funding from 1997 to today. And the teacher’s union doesn’t even want its members paying taxes. Public employee pension income is exempt from NY State and NY City income taxes, no matter how high that income (or total income) is, no matter how young public employees get to stop working. And legislation has been repeatedly introduced to exclude that pension income from consideration with regard to determining if a retired public employee is a “poor senior” eligible for special property tax breaks under the STAR program. So they could pretend to be poor and not pay property taxes, in addition to not paying income taxes.

How about those in rich districts? Would they be pleased at the prospect of forcing their local schools to operate less extravagantly and more efficiently?

Hardly. There are very few honest conservatives in this state. Indeed there are very few in this country. Those you hear from are as likely to question the high level of spending in rich districts as the NY Post is to question the huge staffing levels of the NYPD, and the Tea Party is to question the federal old age benefits of today’s seniors. Only spending on the needy, and future generations, is considered wasteful spending. Even when I disagree with honest conservatives, I respect them. But I come across one once in a blue moon.

Returning to Nassau County, school spending levels are in fact more moderate on the Republican south shore than on the Democratic north shore. But Rockville Center, at $25,983 per student in 2012, is an exception, and that is where State Senate leader Dean Skelos is from. In Chappaqua, where the Clintons and the Cuomos live, it is $27,386 per student. Would politicians from those communities want equality with Mount Vernon and Elmont even at the sky-high average level of $23,914 per student for the downstate suburbs, 48.8% more than the average for Mass, ranked as one of the best states for schools? No.

You had the political realignment in the middle of the last century. Before the realignment the Republicans were the party of snobs, and the Democrats were the party of bigots. After the realignment the Republicans are the party of bigots and special interests, and the Democrats are the party of snobs and special interests. The snobs and special interests don’t want school funding equity. They just want more from them and less for everyone else, including most of the state’s schoolchildren. And that, and not funding adequacy, is the “central crisis.” There will never be good schools as long as bad schools are an excuse for more money, in the state where schools already get more money than anywhere else.

Up in Albany, and want to prove otherwise? Go on. I dare you, “progressives” and “conservatives” alike.