If wishes were horses, the recent Albany news conference by the New York State Educational Conference Board could be restaged as the Charge of the Light Brigade — a doomed assault against budgetary reality.

The group, which includes school boards and administrators as well as New York State United Teachers, said school districts will need a state aid boost of $1.2 billion next year “just to maintain current services” while staying within the state property tax cap.

The Educational Conference Board also said schools need another $700 million “to move forward on critical initiatives,” including full-day pre-K. That’s a $1.9 billion increase in state aid, up nearly 9 percent over the $22 billion budgeted in the current school year.

The board’s “minimum” is $336 million higher than the $864 million school aid increase already built into Gov. Andrew M. Cuomo’s financial plan for the fiscal year that starts April 1. He would need to spend $1 billion more to hit the group’s preferred target.

Educational Conference Board members don’t think it should be too hard to find the money. They said in a research paper, “New York’s fiscal outlook has improved substantially” and “state budget surpluses are projected through 2018.”

In fact, based on spending trends, Albany still faces shortfalls. Surpluses will materialize only if Cuomo sticks by his pledge to hold spending growth to 2 percent a year, roughly the inflation rate.

Without touching K-12 school aid, Cuomo will need to reduce projected spending on everything else by $2 billion if he wants to meet his 2 percent growth goal next year. Holding the line will get harder, because Cuomo’s budget staff now estimates that state pension costs over the next few years will be billions higher than previously projected, based on revised actuarial tables that show retirees are living longer.

As another source of ready cash, school officials also pointed to an unprecedented $5.1-billion windfall the state will collect from New York-based banks that admitted to engaging in illegal transactions. Cuomo’s office appropriately labeled that idea “a non-starter.”

Cuomo’s press secretary said the governor was committed to using the windfall responsibly and not to “satisfy unsustainable and shortsighted special-interest demands now with no plan to pay for it in future years.”

The schools’ aid demands are driven primarily by rising pay and benefit costs, Educational Conference Board leaders acknowledged. They juxtaposed the impact of New York’s 2 percent property tax cap with a projected 3 percent average salary hike for school employees next year — a number they said was in line with projected 2015 salary growth for U.S. workers.

When it comes to compensation, however, public schools aren’t comparable to employers in the broader economy. A majority of organizations have some incentive pay plan, according to the same human resource experts whose salary projections the Educational Conference Board cited.

Most private firms also expect salaries to vary based on meeting goals for the year. Of course, pay linked to results and performance is virtually unheard of in the public sector — and is anathema to teachers unions.

The Great Recession showed that New York’s generous state school aid promises were unsustainable. Cuomo’s tax cap has prevented school districts from passing along an undiminished bill to property owners. Unfortunately, while schools have begun to tighten their belts, they are still too immersed in wishful thinking.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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