This Tuesday and Wednesday we've had back-to-back presentations of the budget plans of the Mayor and the Governor. Both are optimistic documents, thus subject to change over the next few months. The Mayor is hopeful that the city will get more state and federal money, since the city has already done its part by substantially raising property taxes. The Governor is hopeful that the legislature will agree to his budget cuts, since he doesn't want to raise taxes. At this point in time, the Mayor is moving to the left and the Governor is moving to the right.

The Mayor's Executive Budget Proposal

City Bottom Line:
— This school year —
$200 million in cuts (as announced in the Mayor's November Plan); $21 million in new cuts in the January Executive Budget (really, adjustments in calculating additional revenue and additional fringe benefits that can be charged to federal and state categorical programs); $290 million in reoccurring cuts from the last school year; and $120 million in a self-imposed internal DOE savings plan to cover a shortfall in city funding.
— Next school year —
$200 million in cuts (as announced in the Mayor's November Plan) and $151 million in new cuts for a total of $351 million.

City Context:
If additional revenues from the state and federal government do not materialize, cuts to the Department of Education for the 03-04 school year will grow substantially. The City Council does not have a track record of restoring large cuts to public education. Funding for about half of the new teachers contract is not supported by reoccurring revenues. This "shortfall" is over $200 million.

The Governor's Executive Budget Proposal
State Bottom Line:
Education and health took the big cuts in the Governor's plan. Here is a summary of the Governor's proposals. State school aid for the 2003-04 school year will be reduced by 8.5 percent, or $1.24 billion. Interestingly, the $2.7 billion STAR (school property tax relief) program will not be cut, but tax relief will be capped at current levels for homeowners who are not senior citizens.

$406 million cut and proposed formula consolidation.
Once again, the Governor is attempting to create a huge block grant, called "Flex Aid" that would consolidate 9 formulas: Operating Aid; Extraordinary Needs Aid and Operating Standards Aid (both mostly going to high-need districts); Gifted & Talented; Educationally Related Services Aid; Limited English Proficiency Aid; Summer School Aid; Academic Support Aid; and Public Excess Cost Aid, which provides most of the funding for special education. The block grant, however, will be $406 million less than current totals for these nine formulas.

Pre-K, CSR to be eliminated.
Funding for class size reduction, pre-K programs, full-day kindergarten, and Minor Maintenance will be eliminated. Funding for Teacher Support Aid (a salary supplement for urban teachers) will be reduced by two thirds and Growth Aid by half, along with some other categorical programs.

Building Aid cut.
Building Aid will be cut by $144 million by limiting funding to districts with overcrowding or other problems that need to be addressed on a priority basis. (This is not a bad recommendation, in fact, EPP advocated this approach in Castles in the Sand. But the devil is in the details.)

Regional education services cut.
BOCES Aid (which does not affect the city) will be cut by $109 million.

The Board of Regents.
The Governor alsowants to restructure the educational governance structure at the state level by appointing 12 out of 18 Regents, leaving the legislature only 6 appointments. VESID would be moved to the Department of Labor. The Office of the Professions would be transferred to the Department of State. The State Museum, State Library, and State Archives would become part of a new public benefit corporation called the New York Institute for Cultural Education.

Budget Document LINKS
More information on proposed state cuts to education are available by clicking on this link: http://www.budget.state.ny.us/pubs/executive/fy0304littlebook/education.html
To get budget numbers go to this web site(http://www.budget.state.ny.us/pubs/executive/executive.html) and dowload Executive Budget Appendix I and read pages 17 to 30.

State Context:
For at least 20 years, Governors have taken a strong negotiating posture on school aid by always recommending less than the NYS Senate and NYS Assembly would want. Outside of the big five urban school districts, any decrease in state school aid triggers local property tax hikes. By forcing both houses to work hard to restore school aid, they are less likely to ask for other funding increases and more likely to agree to "trades." However, this is unlike any other year. The legislature might come up with different estimates, but so far they have not challenged the
Governor's assertion that there is at least a budget gap of $9.5 billion in the next fiscal year. This gap has to be closed, though the state's budget processes and standards are far more flexible than those in the city. We can expect gimmicks of one kind or the other. But if the economy and state tax revenues continue to decline, we could see a heated debate on raising taxes in the newspaper headlines and a far more quiet agreement in the backroom on curbing state expenditures. But where? Education is a big ticket item. Speaker Sheldon Silver has said that the Governor should not balance the budget on the backs of school children. If advocates and parents do not mobilize, this is exactly what will happen.