What Cuomo did to our schools

THE BUDGET recently enacted in New York state has been hailed as a triumph for newly inaugurated Democratic Gov. Andrew Cuomo, who is portrayed as having brought discipline into a dysfunctional governing process in order to deal with a financial emergency.

The reality is much different. With this budget, New York is continuing a trend of cutting taxes for its most affluent citizens while making education cuts that will be most devastating for the state's poorest students. This year's cuts will be damaging for students and teachers in the short term, but the budget also fits into a longer-term dynamic of increasing inequality in the education system, and eroding job security and working conditions for public school teachers.

The budget deal includes a cut of $1.33 billion in aid to education, down from the $1.5 billion that Cuomo originally proposed. What that will mean for specific school districts is hard to say. But New York City Mayor Michael Bloomberg, who has direct control of the system serving 36 percent of the state's public school enrollment, earlier stated that the Cuomo's proposed budget would require the city to lay off approximately 4,600 teachers, with an additional 1,500 positions to be eliminated through attrition. Bloomberg continues to claim the layoffs are necessary.

Yet even as they insist on the necessity for school aid cuts and teacher layoffs, Cuomo and New York City Mayor Michael Bloomberg have each gone on record as opposing retention of the "millionaire's tax," a surcharge on New Yorkers with taxable incomes over $1 million, which is scheduled to expire at the end of the year.

Although opinion polls consistently show public support for the retention of the tax, the cycle of tax cuts to benefit the state's wealthiest citizens is continuing, even as past tax reductions necessitate devastating cuts in the education budget and abandonment of the goal of equalization.

FOR THE first time in a generation, the Governor and legislative leadership reached a budget deal for the next fiscal year (beginning July 1) in time to meet the statutory "deadline" of April 1.

The way New York state government works has been described as "three men in a room," because agreement between the governor, assembly speaker and Senate majority leader is tantamount to passage, and rank-and-file lawmakers don't deliberate on, much less modify, the agreements made by the three. This is why a 2004 study by New York University's Brennan Center for Justice found New York's legislature to be a model of dysfunction unlike any other state.

Cuomo has been lavishly praised on editorial and news pages for his success in forcing legislative leaders to accept deep cuts. Though he campaigned on a promise to fix the broken process, Cuomo is being celebrated for simply being better than his predecessors at exploiting the system's weaknesses to dictate terms to the legislature.

Cuomo and many lawmakers dispute the Bloomberg's estimates of the impact of the state budget on New York City. In particular, Cuomo and the United Federation of Teachers in New York City insist there are alternatives to layoffs. That is a battle that will continue into the year.

The impact of the budget on the other 696 school systems in the state will vary. But even if school officials were laying out worst-case scenarios in response to the budget debate, the likelihood is that a $1.33 billion cut will produce teacher layoffs throughout the state. The damage and turmoil will be compounded by the fact that federal stimulus funding that softened the impact of prior years' cuts in school aid will not be a factor this year.

In addition to insisting that layoffs will be necessary, Bloomberg has demanded the end of seniority rights. So far, Cuomo hasn't indicated support for this position, but reports in the New York Times and other media outlets highlighted the "disruption" caused by seniority-based layoffs--meaning there is pressure in "liberal media" for limitations on, if not the elimination of, seniority rights. Media accounts present the problem as a choice between seniority and performance as the basis for layoffs, without questioning the system's capacity to assess teacher performance fairly and appropriately.

Because most of the cuts are to foundation aid--the payments made by the state to school districts under a formula intended to reduce revenue disparities between affluent and high poverty school districts--they are certain to have their heaviest impact in urban and rural school districts serving a high percentage of students growing up in poverty.

The formula used to allocate foundation aid is intended to ensure that high-need districts have adequate funding to meet the state constitution's mandate to provide each child with a "sound, basic education." The adoption of the current formula followed years of delay after the state's highest court ruled that the state's method of allocating aid shortchanged New York City students specifically, and students in high-poverty districts generally.

ELECTED OFFICIALS and the media repeatedly cited the state's fiscal emergency as a justification for shared sacrifice--with the lion's share of that sacrifice being visited on the poorest New Yorkers. However, the "emergency" follows a tax-cutting spree during boom years, when record profits and a bloated bonus pool on Wall Street resulted in state government surpluses.

These tax cuts, along with the decision to use surpluses in volatile income tax revenues to finance STAR (School Tax Relief), a permanent property tax relief program, built in structural deficits, which in turn created pressure to reduce direct "foundation aid."

Under STAR, all homeowners can apply for a tax reduction, with low- and moderate-income seniors eligible for a higher one. The state pays to school districts the portion of the tax liability that homeowners don't under STAR.

STAR was enacted in 1996, and as the Wall Street bubble generated surpluses for the state, the amount of relief available under STAR was increased. Because STAR is available only to homeowners, with no benefits to renters, who pay property tax indirectly, the tax relief program unfairly disadvantages districts with the highest percentage of students in poverty. According to a 2004 study for the Education Finance and Accountability Program at Syracuse University's Maxwell School, in one tax year studied, STAR acconted for $320 per pupil in aid in New York City, and $1,395 in the downstate suburbs.

Theoretically, STAR is just replacing money that would otherwise be paid by property owners, not increasing or decreasing school district revenue. But by building inequity into a popular tax relief program, STAR put the neediest school districts at risk when the bubble burst, and the state found itself short of cash for foundation aid.

According to the Maxwell School study, STAR also had the effect of encouraging suburban school districts to raise their tax rates, knowing that STAR would more than offset the impact for homeowners. By raising rates, they could increase the amount the state was obligated to pay under STAR. The extra money may have contributed to a series of scandals from 2006-2008 involving pension abuses and double-dipping by high-paid district administrators, consultants and outside professionals in affluent suburban districts. None involved rank-and-file teachers or other school personnel.

The downturn in the economy and the erosion of the value of homes, along with the scandals in suburban school spending, focused the attention of suburban homeowners on their property tax rates, and there is now pressure to enact property tax caps. Cuomo campaigned on a pledge to do just that, citing the abuses by administrators in affluent districts.

Opposition has come from downstate suburban school districts and the Republican Senate majority. They are willing to enact the caps, but insist that school districts receive "mandate relief" in return. The mandate relief package for which the School Boards Association is lobbying includes reducing pension and health insurance contributions, weakening collective bargaining requirements and implementing statewide salary freezes. Other areas mentioned by lawmakers as targets for savings include certain protections for students with disabilities, and some student transportation mandates.

The battle to restore Cuomo's cuts in the final budget legislation was largely unsuccessful, but should be viewed as part of an ongoing struggle to reverse a process that has gone on since the mid-1990s. The next battles are likely to be over extending the millionaire's tax and preventing a backroom deal that exchanges a property tax cap for expansive mandate relief.