New York State budget deal may cause NYC, other districts to tighten their belts

New York lawmakers were poised Thursday to send $27.9 billion to school districts across the state, a slim uptick over last year, amid attempts to rein in spending during the coronavirus pandemic.

The 2020-2021 budget may force districts, including New York City’s, to make significant cuts. 

The Senate approved the plan Thursday. The Assembly was still casting final votes Thursday night, but state leaders said they are expected to follow suit.

In all, the state cut about $1 billion in education funding from districts but filled that hole with the same amount in federal stimulus dollars, which are meant to help schools deal with the effects of the virus. 

As a result, after six years of funding increases, New York City schools will receive $11.3 billion in state dollars, about 0.2% less than it received for the current school year. That includes $717 million in federal stimulus dollars, which can be used for a broad range of items, such as supplementing remote learning plans.

Gov. Andrew Cuomo said it was a “great” budget and praised lawmakers for pushing through in the middle of an unprecedented public health crisis. 

Other state leaders were less enthusiastic. Senate Majority Leader Andrea Stewart-Cousins said it’s “not the budget we had hoped to pass” even a month ago, but noted lawmakers were able to “hold the line” on education funding.

The plan was a deep disappointment to advocates who had pushed lawmakers to boost Foundation Aid, the formula that sends extra dollars to high-needs districts and makes up most state education dollars. Districts will not see an increase in that aid. Many, including state lawmakers, had also pressed the governor to tax ultra-wealthy individuals in order to fund budget increases.

Additionally, the $95 million year-over-year increase in state education funding appears to come from direct reimbursements for specific expenses, such as textbooks and transportation. 

“This immoral budget, failing our children, is the joint responsibility of Governor Cuomo, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins,” said Alliance For Quality Education, an education advocacy group that has pushed for foundation aid increases, in a statement. “They see the suffering in our communities, and they have chosen to ignore it.”

🔗Tightening belts

Cuomo, who had in January proposed increasing education funding by $826 million, more recently warned of education cuts as the state expects about $10 billion less in tax revenue while non-essential businesses remain closed as New Yorkers remain inside. 

While flat funding is better news than deep cuts for districts, school leaders may have to find big savings as they face costs that rise every year, such as educating a growing number of high-needs students and health care for employees, said Dave Albert, chief communications and marketing officer for the New York State School Boards Association. 

“I do think we’re gonna see districts tightening their belts and looking to see where they can make cuts in order to deal with the fact that there is not going to be an increase,” Albert said.

City officials were already worried that Cuomo’s original budget proposal from January was tens of millions of dollars short of what they needed for schools. 

On Wednesday, Mayor Bill de Blasio said the city will have to make “tough, tough budget decisions going forward,” but didn’t detail what that could mean for schools. The city finalizes its own budget in June.

De Blasio has already asked city agencies to find more than $1 billion in savings. But after speaking with federal officials including Speaker of the House Nancy Pelosi, Senate Minority Leader Chuck Schumer, and U.S. Treasury Secretary Steven Mnuchin, the mayor is hoping that another federal stimulus bill will stave off additional cuts.

“There’s a clear understanding there’s going to be another stimulus bill, and one of the elements of that bill will be aid to localities and states,” de Blasio said during a press conference. “I think that has to be money to make up for all the massive expenditures we are putting out to protect people from coronavirus, but also all the lost revenue, because we need that money back to keep basic services going in this city.”

After the last recession, about a decade ago, some 200 districts made changes to contracts with their teachers unions, such as freezing raises, Albert said. If there are layoffs, the typical next step is shuttering certain elective courses, extracurricular activities, and activities like field trips, he said. 

School systems such as New York City’s could also dip into “rainy day” funds, or reserves, to make up for losses. At the same time, the city could lose $6 billion in revenue by the end of June as businesses remain closed, according to an analysis from Comptroller Scott Stringer.

Michael Mulgrew, the president of the city teachers union, told members Wednesday that he spoke to Stringer and believes the city’s finances are in “really bad shape,” and was bracing for an estimated 30,000 to 40,000 teacher layoffs statewide – roughly 15% of the state’s public teachers — as of last Friday. But with federal stimulus dollars, he is hoping for the best. 

“What we have now is hopefully enough, that when we reopen schools and when we go back to schools in September, that we’re not looking at a decrease in our workforce,” Mulgrew told members on a conference call. “Because that would be the last thing we need because we all know that so much damage has been done because all of the different social and emotional and stress and fear and anger that everyone is feeling.”

🔗Other complications

School districts will also have to grapple with potential budget cuts during the school year. Lawmakers approved a plan that allows the budget director to check on tax revenue during three points of the fiscal year. If revenue is at least 1% off of the state’s projections, the director can cut aid to towns and cities across New York. Cuomo has suggested they can also boost dollars if more money comes in. (Officials would have to notify the legislature, and the legislature would have 10 days to approve an alternate plan.)

That was concerning to some education observers and state lawmakers, who worried it gave extraordinary power to the governor’s office. 

“I don’t think the state budget should be balanced from the outset on an expectation of making mid-year cuts,” said Dave Friedfel, director of state studies for the Citizens Budget Commission. 

That means that school districts may have to adjust their budgets in the middle of a school year. One of the check-in periods is between July and December. Schools could be targeted for cuts since they account for the largest part of the state’s budget, Friedfel said. 

“It depends on what happens with the markets, depends on what happens with personal income,” Friedfel said. “Certainly mid-year cuts will be hard on everything.”

Outside of budgeting, a proposal to make more room for charter schools in New York City was not included in the final plan. The proposal would have allowed more of the publicly funded, privately managed schools to launch as New York City has reached a legal limit on how many such charters can be issued.

In January, Cuomo had proposed allowing charter authorizers to re-issue leftover or abandoned charters as they became available. The Charter Center had estimated that 15 closed charters could have been reissued, had this proposal passed. 

“I’m sorry to see that we did not get to ‘yes’ on ensuring that more high quality public schools could open in New York City,” said James Merriman, CEO of the New York City Charter School Center. “It’s a shame.” 

Christina Veiga contributed to this report.