A fuller comparison of school costs

by E.J. McMahon |  | NY Torch

School costsCharter schools sharing space in New York City public school buildings cost less to operate than traditional public schools, counter to the findings of a 2010 research memo from the Independent Budget Office (IBO), according to a white paper issued today by a research group affiliated with former state comptroller candidate and financial advisor Harry Wilson.  (Full disclosure: I was among those asked, before the report’s release, to comment on its methodology.)

The report by Wilson and his colleague Jonathan Trichter takes issue with an IBO Fiscal Briefconcluding that charter schools operating in public school buildings actually spent slightly more per pupil– $16,660 vs. $16,001 for traditional city public schools as of 2010.

IBO’s calculations “were incomplete, primarily because they did not take into account the full extent of long-term liabilities associated with district public schools, namely pension and post-retirement healthcare obligations,” or OPEB, said the report, issued by Wilson’s non-profit research organization, Save Our States.

A summary of the Wilson-Trichter findings:

* Taking into account the present value of just pension obligations for district public schools adds $5,181 to $5,642 in per-pupil costs, whereas the IBO only accounted for $2,132 of those costs. So the total per pupil support for district public schools would be between $19,060 and $19,521.

* Taking into account the present value of OPEBs adds an additional $762 per pupil for district public schools, resulting in total support per pupil of $19,822 to $20,283.

Wilson’s findings are especially timely, given mayoral candidate Bill de Blasio’s desire to collect rent from publicly funded charter schools “co-located” in public school buildings.

IBO’s response, as quoted in today’s New York Post:

“Our report reflected what the city actually paid. We don’t know what the city will owe down the line,” said IBO spokesman Doug Turetsky.

Yes, but … just because the city doesn’t correctly calculate a current cost for OPEB doesn’t mean the number is unknowable.  Since OPEB is contractually promised to the vast majority of city workers, the redoubtable number-crunchers at IBO really should to settle on a methodology for assessing the net present value of those benefits in future comparative cost analyses.



- E.J. McMahon is the Research Director at the Empire Center for Public Policy.