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At the height of the pandemic, as enrollment in New York City’s public schools took a nosedive, officials kept school budgets steady.
City officials, who were flush with billions in one-time federal relief funding, didn’t want to take away resources from schools where students had experienced prolonged learning interruptions, even though budgets typically are tied to headcount.
But as the pandemic receded and federal funds dried up, officials continued to plow hundreds of millions of dollars into school budgets to protect them from cuts as enrollment losses deepened. This school year, the city is spending over $388 million to prop schools up — the largest annual sum since the pandemic hit.
Overall, officials have spent $1.6 billion to stave off enrollment-related cuts over the past six years, according to the Citizens Budget Commission, a watchdog group. Enrollment in the city’s public schools has dropped more than 8% during that time, to 884,000, and is projected to continue sliding.
Now, as Mayor Zohran Mamdani prepares to release his first budget proposal next week — and warns of a $7 billion gap — City Hall must decide whether to continue the so-called “hold harmless” policy. Some budget experts believe the mayor should wind it down, arguing that allowing school budgets to become increasingly detached from enrollment introduces inequities. Some schools may receive significantly more money per student because of enrollment losses rather than student need.
The issue is politically tricky for Mamdani, who vowed to prioritize funding for public education during the campaign. Some parent leaders worry that rolling back the policy would force some schools to cut key staff and programs. When former Mayor Eric Adams proposed bringing school spending in line with enrollment, he faced enormous backlash — prompting city officials to keep propping up school budgets throughout his term.
“Nobody gets points for taking money away,” said Amy Ellen Schwartz, a public policy professor at the University of Delaware who has studied the city’s policy of keeping budgets steady.
Roughly 450 of the city’s more than 1,500 schools received $127 million this year to help keep their budgets from dipping due to enrollment declines year over year. On top of that, city officials offered $262 million worth of mid-year budget relief to more than 1,000 schools because they welcomed fewer students than the city initially projected.
Schwartz said there were good reasons to keep school budgets steady during the pandemic. Schools may have otherwise been forced to cut teachers as their budgets shrank, making it more difficult to meet students’ mounting academic and social needs. But Schwartz said the city must begin to reckon with managing a smaller school system.
“I see no rationale for maintaining resources allocated to serve a population that isn’t there anymore,” she said.
Parent leaders raise concerns about cuts to school programs
Education Department officials have warned that the money may not last forever. Principals should “carefully program these resources while being mindful of long-term program sustainability,” officials said in a June budget memo. Yet on dozens of campuses, the funding represents more than 10% of the budgets they receive before the start of the school year, city data show.
Ana Champeny, the vice president for research at the Citizens Budget Commission, said the city should consider phasing the money out over multiple years. “The shock to some school budgets would be pretty severe” if the funding was yanked all at once. “Enrollment is decreasing and we need to think about what is the right way to manage the school system.”
School officials across the country are grappling with similar questions about how to reconcile enrollment declines in their budgeting decisions, said Jonathan Travers, the president of ERS, a nonprofit organization that advises district leaders.
The policy dilemma only gets more difficult to resolve the longer the hold harmless policy persists, he noted.
“The greater the divergence between a school’s funding and its enrollment, the more disruptive an eventual reconciliation is going to be,” Travers said.
Some parent leaders urged city officials to avoid making abrupt changes without educating school communities about the budget process or taking stock of how schools are using the money.
NeQuan McLean, the community education council president in Brooklyn’s District 16, said most schools in his district are struggling with low enrollment and use the money to help pay for essential programs, like music, art, and after-school. He worries that cuts could force campuses to slash those offerings, potentially making it even more difficult to attract families.
“We’re barely managing with what we have,” said McLean, whose district covers Bedford-Stuyvesant. “I just hope they don’t pull this money without real community engagement.”
He added that the city should consider rethinking the funding system more broadly to ensure schools can fund a range of staff and services regardless of how many students are enrolled.
Losing the hold harmless money could make those campuses more likely to be merged or closed, a strategy Chancellor Kamar Samuels has said may be necessary for campuses that struggle to afford basic programs.
Spokespeople for Mamdani and Samuels did not respond to questions about whether they intend to keep the hold harmless policy.
How Mamdani manages the public school system’s budget remains an open question. Experts expect his preliminary budget, due on Tuesday, to offer clues.
On the campaign trail, Mamdani singled out the Education Department as one area he hoped to find efficiencies and vowed to overhaul its procurement process.
The mayor has ordered each city agency to appoint a “chief savings officer” with an eye toward assessing programs and identifying wasteful spending. An Education Department spokesperson confirmed they have selected someone for the role. They declined to say who it is.
Alex Zimmerman is a reporter for Chalkbeat New York, covering NYC public schools. Contact Alex at azimmerman@chalkbeat.org.
