New York

Charter School Space Costs

A recent report by the Independent Budget Office found that New York City charter schools that don't use public space receive around $3,000 less per pupil than traditional public schools. This post reviews how much charter schools actually spend on their space. We created a database using financial information from the 2008-2009 annual financial audits and school siting statistics from the 2008-2009 Blue Book report produced by the School Construction Authority to catalog school space. We found that the 26 schools not housed in Department of Education-provided space spent around $2,100 per pupil on occupancy costs, which includes rent, utilities, safety, and maintenance. You can see the full spreadsheet here. This database lists every charter school and whether or not it is in DOE space. As an added feature, for those in DOE space, it lists the schools with which they share space and their respective progress report scores. This $2,100 number only tells part of the story. According to a source who helps charter schools find private space, the market average for a charter school to lease space is between $2,400 and $3,500 per pupil. If the rental costs are less than $2,000 per pupil, this probably indicates that the school negotiated a great rental deal, bought the building a long time ago and paid off most of the mortgage, or has some sort of philanthropic money subsidizing part of the cost. This is certainly the case for many of the schools in our spreadsheet, such as the Carl C. Icahn Charter School or Bronx Preparatory Academy — both schools that have some sort of philanthropic entity helping them with their rental and/or purchase needs.
New York

Teacher pension fund lost $9 billion last year while costs rose

In Albany this week, UFT President Michael Mulgrew floated a plan to save the city money by letting teachers retire earlier. But a new report on the health of the city's teachers pension fund suggests that Mulgrew's proposal would only compound the fund's potentially crippling budget crunch. The fund's annual report, released last week, shows that it lost 29 percent of its value, more than $9 billion, last school year, even as the portion the city is required to pay reached unprecedented heights. The mix of rising costs and declining value raises serious questions about how the city will be able to afford to pay the pensions it has promised in the future without major concessions by the teachers union. The fund, called the Teachers Retirement System (TRS), is a collection of investments paid for with a combination of taxpayer dollars and teacher salaries. Every year a chunk of it is used to pay retired teachers and principals the pensions state law says they are owed. Last year's financial crisis sunk the fund to its lowest level in more than 15 years, effectively erasing all of the gains made in the past decade's bull market, according to a database of TRS's financial reports. Over that time span, the fund's value, adjusted for inflation, has shrunk by more than $11 billion. This leaves a $15 billion gap between what the fund expects to pay out in the next 30 or so years and what it will have saved by that time, according to the TRS's preferred accounting method. Another way of calculating these "unfunded liabilities" used in the private sector puts the number even higher, at $27 billion. "It's not a crisis. It's a long-run big problem: The pension system is far more costly than it ought to be," said Charles Brecher of the Citizens Budget Commission, an independent group that advocates for changes in city and state finances.
New York

Charter School Expenses 2009

Like we did last year, Ken Hirsh and I used the 2008-2009 financial audits to calculate charter school expenses per pupil for the 77 charter schools operating during the year. This provides a sense of how much charter schools are spending, using funds from philanthropy and other sources, above the $12,432 per pupil provided by the city Department of Education. We've found this number is often elusive or non-existent, so we've tried to rectify that situation here. Our main findings were that while total charter school expenses increased over the past year by 8 percent per pupil, the average amount spent by each charter school above the base level provided by the DOE was 13 percent less than in 2007-08. This could be partly be due to the decline in per pupil philanthropy, a trend we detailed in an earlier post, but we can't be sure. The workbook with all our calculations is available here. The total expenses for the 77 schools were $342,825,475 compared to $236,230,149 in 2007-2008 — a 45% increase, largely reflecting the significant increase in the number of charter school students. The per-pupil expenses for 2008-2009 were $14,456 — $1,095, or 8 percent more, than in 2007-2008. For the 2008-09 school year, the “base funding” per pupil, i.e. the fixed amount per pupil received from the DOE regardless of demographics, was $12,432. So spending on the average student was $2,024 above the base amount. This is $314 less than the $2,338 spent above the base in 2007-2008. Thus, while the base funding amount increased by 13 percent, from $11,023 to $12,432, the amount charter schools spent above these numbers was actually 13 percent less in 2008-09.
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