NY School Spending Well Above Inflation in 2008-09

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School districts across New York State will increase their per-pupil spending next year by nearly one and a half times the current rate of inflation — despite falling real estate values and clear signs of an economic slowdown — according to an analysis issued today by the Empire Center for Public Policy.

The Empire Center’s 2008-09 School Budget Spotlight focuses on proposed tax and spending changes measured on a per-pupil basis for the 634 school districts that have submitted data compiled for the State Education Department’s annual school property tax report cards. State law requires these reports to be issued at least 24 days before annual school board elections and budget votes, which will be held this year on Tuesday, May 20.

Preliminary data from the Education Department indicate that spending per-pupil will increase by an average of 5.8 percent, to a statewide average of $18,768, and per-pupil tax levies will increase by an average of 4.2 percent, to a statewide average of $10,796, under budgets proposed for the 2008-09 school year, the Empire Center found. Annual consumer price inflation is now estimated at just under 4 percent.

On a regional basis, the biggest school budget increases are in the Southern Tier, where the average per-pupil spending increase is 7.5 percent among the schools in the state sample. The Finger Lakes region has the lowest increases, with proposed per-pupil spending hikes of 5.2 percent. Only one-fifth of the districts statewide proposed spending increases at or below the inflation rate.

Average tax increases ranged from a low of 3.1 percent in the Finger Lakes region to a high of 5.1 in the Central New York region. However, a small number of reports were filed before the Legislature and Governor Paterson agreed to boost school aid by $1.8 billion, which may have reduced some tax proposals. Roughly half the districts have proposed per-pupil tax levy increases at or below the inflation rate.

Edmund J. McMahon, director of the Empire Center, said the latest school budget data highlighted the need for New York State to enact a cap on school property taxes. A gubernatorial commission chaired by Nassau County Executive Thomas Suozzi is due to issue recommendations on a cap by May 22.

“While New Yorkers are tightening their belts, too many school districts are expanding their spending commitments to levels they will not be able to sustain without larger tax increases in the future,” McMahon said.