New York State’s school boards are patting themselves on the back for the relatively low levels of nominal spending growth in their proposed 2009-10 budgets, which will be submitted to local voters across the state next week.  But in real terms–adjusting for the annual inflation rate at the time of the budget vote–this year’s proposed per-pupil increases in spending and tax levies are considerably larger than last year’s.

In 2008-09, districts were proposing spending hikes of 5.8 percent per pupil and property tax hikes of 4.2 percent per pupil.  At the time, the Consumer Price Index (CPI) for all northeastern urban areas was running at 4 percent, which also turned out to be the average CPI growth for 2008.

This year, proposed school budgets call for spending hikes of 3 percent per pupil and tax levy increases of 2.75 percent per pupil.  However, the CPI for the latest 12-month period is a virtually flat 0.17 percent.

Thus, adjusting for current inflation, total per-pupil school spending will increase at almost twice last year’s average rate, and the total proposed tax levy increase is 13 times the rate of last year’s per-pupil increase.   (The good news: Roughly 100 school districts out of the 662 reporting data to the Education Department will hold their tax levy increases at or below zero next year.  But at the other extreme, about 140 districts have proposed tax levy increases of 5 percent or more.)

Inflation aside, consider the different economic circumstances in which the 2008-09 and 2009-10 school budgets were prepared.

Last year at this time, the state Budget Division was forecasting a relatively mild recession, with small continuing growth in personal income and employment.  But the economic downturn has been worse than anyone expected.  Since last August, New York has lost roughly 180,000 jobs.  Personal incomes and real estate values are down, and unemployment is rising.  Yet New York’s public education establishment keeps asking for more, on top of what is already the nation’s heaviest school tax burden.

To be sure, most school officials’ hands are tied to a great degree by long-term collective bargaining agreements with teachers’ unions.  While fuel and other operating costs are sinking in the recession’s deflationary environment, teacher salaries are rising an average of 5.6 percent, compounded by health insurance costs that generally are rising even faster.  For most districts, the only way to substantially reduce costs is by reducing staff.  Many districts are doing just that, since few unions have made any effort to save jobs through contract concessions.

Excuses aside, under the economic circumstances, the proposed 2009-10 school tax and spending hikes are nothing to boast about.  In fact, the data from the 2009-10 School Propert Tax Report Card underscore the failure (or inability) of too many school districts to control costs even in the most dire economic circumstances.

Property tax cap, anyone?


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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