New York Views

Raymond Domanico
Does State Aid Reach the Schools
Summer 1991

One of the most common explanations for the inferior performance of New York City’s public schools is that the city school system receives less than its fair share of state aid to education, causing the city’s schools to be underfunded. According to this view, greedy suburban legislators, in return for supporting overall increases in state aid to education, demand a larger proportion of aid than their districts deserve. Given that the state now disburses more than $10 billion in aid to education, this is a high-stakes political game: The city’s Board of Education estimates that its “shortfall” in state aid is $380 million in the current fiscal year alone.

There is some truth to this: The New York City public school system now educates 36 percent of the state’s students, yet receives only 32 percent of the state aid to education, even though city schools serve a greater percentage of kids with severe needs than the rest of the state.

A closer look at the data, however, shows that the city’s own behavior undermines its claims: In effect, the city has been using a steadily increasing flow of state education aid not for the schools, but to prop up the rest of the city budget while reducing its own commitment to education. If the city’s schools are getting less than their fair share, the blame lies with the spending priorities of the city government, not those of the state or federal governments.

Over the last ten years, state aid to the city’s school system has increased by more than $1.9 billion, or 150 percent. And while the state has been increasing its support of city schools, the city government has been pulling back. The chart below, drawn from data in the chancellor’s 1991 budget request, compares the sources of the city school system’s revenues in 1982 and 1991 (all dollar amounts are in millions):

Had New York City’s contribution to the Board of Education grown by the same proportion as the state’s contribution, the city’s public school budget would have been $1.7 billion higher in 1991. Moreover, despite all the rhetoric about Washington’s abandonment of New York City, had city education expenditures grown only as much as the federal contribution to city schools, the budget would have been $700 million higher in 1991.

In 1983, 55 percent of the school system’s budget came from the city, 35 percent from the state, and 9 percent from the federal government. Today, however, the city picks up only 46 percent of the tab, while the state accounts for 45 percent and the federal government still picks up 9 percent.

The shift in percentages is due not only to rising state aid: In recent years, even as the city’s local revenues grew at an impressive rate an ever smaller percentage of those revenues has gone to the schools. Again the chancellor’s own budget shows the facts:

If the Board of Education were capturing the same share of locally raised revenues as it had been only five years ago, its budget would be $690 million higher than it is now.

Over the last ten years, the city government has effectively shifted a substantial share of the school system’s costs to the state’s taxpayers, while shifting its own resources to other areas. The behavior of the city over two mayoral administrations indicates that increases in state education aid will not even find their way into the school system, let alone the classroom.

Is it any wonder that Albany resists the city’s requests for a bigger piece of the pie? It is hardly reasonable to expect suburban legislators to increase what has effectively become a general support program for the city budget. Nor is it surprising that parents who value public education move to the suburbs when their children reach school age. Parents are quite willing to pay higher suburban taxes so their children can go to better schools. Education is the government service they care about most; New York City has other priorities.

The spending gap between city and suburban schools is largely of the city’s making. The city chooses to shortchange its schools in favor of other programs, and continues to drive away an important part of the school system’s constituency and of its own tax base.

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