Unconscionable. Shameful. Deplorable. Despicable. Those are just a few adjectives that come to mind to describe the New York State Legislature’s failure to pass commonsense education reforms that would have qualified New York for a share of the federal government’s $4.35 billion Race to the Top initiative. As a result, New York taxpayers have probably lost out on some $700 million in federal education funding, and the state has missed a golden opportunity to improve the educational prospects of its neediest schoolchildren.

When the Obama administration announced the criteria for its Race to the Top grants competition last summer, it seemed that the education-reform movement had reached a tipping point. Here was a Democratic administration backing cutting-edge reforms like rigorous academic standards, data-driven instruction, performance pay for teachers, and the takeover of struggling schools. Secretary of Education Arne Duncan made it clear that states that inhibited the growth of charter schools or prohibited the use of students’ test scores when evaluating teachers would be deemed ineligible for Race to the Top grants.

Most states responded by embracing the tenets of Race to the Top. Tennessee, Rhode Island, Louisiana, and Massachusetts passed charter-friendly laws that lifted caps on the number of charters and allowed public money to be used for their construction. California, Indiana, and Wisconsin scrapped laws that barred the use of student test scores in teacher assessments. Just two states still have such data firewalls: Nevada and New York.

And late last year, it looked as though New York would join the wave of Race to the Top–inspired reform sweeping the country. In December, Merryl Tisch, chancellor of the state’s Board of Regents, and David Steiner, the state’s education commissioner, proposed a broad framework for Race to the Top reforms. Then Governor David Paterson initiated the legislative action needed to put those reforms into place. Paterson’s proposed bill would have eliminated the state’s cap on charter schools, presently set at 200; let the state finance charter-school capital funding; encouraged the Board of Regents to take control of persistently low-performing schools; and immediately rescinded the law, already set to expire on July 1, that prohibits using student performance as a criterion for evaluating teachers before they receive lifetime tenure.

Just days before the January 19 Race to the Top application deadline, however, Assembly Speaker Sheldon Silver, doing the bidding of the state’s powerful teachers’ unions, submitted what must be one of the most cynical pieces of legislation in Albany’s long history of deceitful and corrupt politics. Silver’s bill, which mirrored proposals put forth earlier in the month by the New York State United Teachers and New York City’s United Federation of Teachers, would have raised the charter cap from 200 to 400. But several “poison pills” inserted into the legislation would effectively kill the state’s charter schools. The bill would have imposed some half a dozen onerous new restrictions on charter schools, including making it nearly impossible for them to share buildings with traditional public schools, as two-thirds of New York City’s charters do now. It would also have removed the power to grant charters from the New York City schools chancellor and the board of trustees of the State University of New York—which together granted 29 of last year’s 31 charters—and instead given controlling authority to approve any future charters to the Board of Regents, whose members are appointed by the Legislature. And the bill would have subjected charters to a restrictive new request-for-proposals process that predetermined the schools’ size and location. “This bill, masquerading as a charter cap lift, instead would have shackled chartering beyond recognition,” said Peter Murphy of the New York Charter Schools Association. “The teachers’ unions narrowly missed terminating charters, practically speaking.”

The state senate’s majority conference leader, John Sampson, introduced identical legislation there, and it looked as though this fraud of an education-reform bill might pass until two Democratic senators, Craig Johnson from Long Island and Ruben Diaz, Sr. from the Bronx, joined Senate Republicans led by Dean Skelos and blocked the bill from coming to the floor for a vote. In the end, Albany’s dysfunction prevailed and nothing was done. So while New York was among the 40 states to submit Race to the Top applications by the deadline this past Tuesday (another round of funding will take place later this year), it’s doubtful that the state will receive any funding. Indeed, it shouldn’t, if Race to the Top is to live up to its name.

While it’s clear that the teachers’ unions fear competition from the mostly nonunionized charters, it was stunning nonetheless to see such a brazen power play—especially since New York’s charters are unquestionably succeeding. A recent study by Stanford economist Carolyn Hoxby revealed that students in New York City’s charter schools outperformed their traditional public school counterparts by substantial margins. Indeed, charter schools like KIPP and Harlem Success outperform public schools in New York’s toniest suburbs. Tens of thousands of students are on waiting lists to enter the city’s 99 charters. Little relief is in sight for them, since this fall, the state and city will hit the Legislature’s cap of 200 charter schools.

New York’s Race to the Top debacle highlights a growing divide within the Democratic Party. On one side are anachronistic Tammany Hall–type pols like Silver, with their longtime obeisance to the reform-resistant teachers’ unions. On the other is a growing cadre of Democrats—at the national and local levels—who are championing an aggressive education-reform agenda. Democratic assemblyman Sam Hoyt from Buffalo, for example, introduced a comprehensive education-reform bill in November that could have catapulted New York to the head of the Race to the Top competition.

How can New York recover from this embarrassing episode and join other states in adopting commonsense education reforms? Joe Williams, director of Democrats for Education Reform, believes that voters must start paying attention to which politicians are on the side of the teachers’ unions and which are on the side of the children. As he puts it: “Right now, the only people holding elected officials accountable on education are the teachers’ unions—and the teachers’ unions are driving public education into the ground.” It’s time for New Yorkers to get angry and start holding officials accountable for obstructing real education reform.

Charles Sahm is a program officer at the Manhattan Institute.