United Federation of Teachers President Michael Mulgrew said the mayor should not have to lay off teachers given that Wall Street rebounded this year.

CORRECTION: An earlier version of this story mischaracterized the size of the rally. Thousands of people attended this afternoon’s rally, according to multiple people who attended and other press accounts. Protesters came from multiple locations and then converged near Wall Street.

Thousands of teachers joined elected officials in a symbolic march from City Hall to Wall Street this afternoon to protest Mayor Bloomberg’s proposed budget cuts.

“You took the money from us, now we’re going to where you sent the money,” said Rev. Al Sharpton, who helped lead the march along with national teachers union president Randi Weingarten and half a dozen City Council members.

The march was designed to dramatize the argument that opponents of Bloomberg are making in response to his budget, which calls for laying off more than 4,000 teachers. In a year when Wall Street’s recovery contributed to a citywide surplus, they ask, why are teachers being laid off?

“I never expected to come home to see New York act like Wisconsin,” Weingarten told the screaming crowd.

Bloomberg has blamed the draconian budget on state cuts and pointed out that the surplus this year is not large enough to plug projected gaps next year — an assessment the Independent Budget Office seconded in a recent analysis.

At least half a dozen of the City Council’s 51 members also joined the rally, vowing not to approve Bloomberg’s budget. “We pass the budget, not Bloomberg,” Council Member Charles Barron said. Council members Margaret Chin, Melissa Mark-Viverito, Robert Jackson and Julissa Ferreras were among those who cheered him on.

Council members and the mayor must come to an agreement on a budget for the city by July 1.

The three elected officials who often oppose Bloomberg, and who are all possible mayoral hopefuls — Manhattan Borough President Scott Stringer, Public Advocate Bill de Blasio, and Comptroller John Liu — also attended the rally.

Sharpton’s appearance alongside Weingarten was notable in demonstrating how far the activist reverend has come from the days, not so long ago, when he supported the mayor’s education policies. Lately, Sharpton and Weingarten have been speaking together, revising the “odd couple” duo Sharpton once formed with former schools chancellor Joel Klein.

In November of last year, city officials estimated that they would need to increase earlier seat construction projections in the face of overcrowding in schools. At the time, they planned for 50,074 new seats to be built by 2014, many of them in elementary and middle schools where demand had ballooned.

Then came a proposal from Governor Andrew Cuomo to cap state spending on school construction aid. The plan would have significantly reduced the state’s contribution. To absorb the cut, city officials said they wouldn’t be able to build thousands of the seats they had planned on — a decision that would have affected schools in Williamsburg, Brooklyn and Riverdale, Bronx, the most.

But now that Cuomo’s proposal has not been included in the budget agreement, the numbers have changed again. With $1.7 billion more to spend on school construction, the city can now afford to build about 26,500 seats, instead of the roughly 14,000 it had planned on.

City officials said that more information about which neighborhoods would benefit from the seat construction increase, and which would not feel any effect, would be released tomorrow.

CHANCELLOR-DESIGNEE WALCOTT ANNOUNCES 12,000 SCHOOL SEATS AND $1.75 BILLION RESTORED TO DEPARTMENT’S CAPITAL PLAN

Meeting with Assembly and Senate Education Committees in Albany, Chancellor-Designee Walcott Says Swift Action by Legislature Helps City Restore Nearly 12,000 School Seats for Construction

Chancellor-Designee Dennis M. Walcott today announced a new proposed amendment to the Department of Education’s Five-Year Capital Plan, which restores 11,979 school seats for construction and $1.75 billion in total funding for the plan. The amendment to the Fiscal Year 2010 – 2014 Five-Year Capital Plan now proposes funding for 28,866 new school seats citywide and a total investment of $11.1 billion over five years.  The Chancellor-Designee was in Albany to meet with the State’s Assembly and Senate Education Committees.

“For months now, we have faced the prospect of big cuts in aid from Albany that would have meant fewer new school seats and more overcrowding,” said Chancellor-Designee Walcott. “Today, I’m pleased to announce that the Legislature has come through for New York City, putting us back on track to add over 28,000 seats in neighborhoods with the most need. We’re also investing in critical technology and infrastructure for our schools and moving forward with a plan to improve energy use and environmental quality of our buildings. I’d like to thank the Legislature, and particularly Assembly Education Chair Cathy Nolan and Senate Education Chair John Flanagan, for their leadership in protecting State support for school construction.”

The new April amendment to the capital plan restores funding by $1.75 billion, bringing the total to $11.1 billion over five years. The portion of that total dedicated to capacity is now $4.6 billion, a $1.7 billion restoration, which funds a total of 28,866 seats for construction or design. The new amendment also brings capital investment to $6.5 billion in order to fund critical upgrades to school infrastructure, including an additional $141 million for the City’s comprehensive plan to increase energy efficiency and environmental quality in public schools.

In February, the Department proposed an amendment to the capital plan based on the Governor’s original proposed cap on building aid, which would have cut the State’s commitment to the City by 48% and forced the delay of 17,000 new seats. The Governor’s proposal was not included in the State’s adopted budget. With State funding restored, the Department is now able to fund 26,552 seats for construction and an additional 2,314 seats for design. The 26,552 seats fully funded for design and construction is a nearly 12,000 seat increase over the February amendment.

The new April amendment will be reviewed and voted on by the Panel for Educational Policy. It will then be forwarded to the City Council for review and approval as part of the City’s annual budget adoption process.

The School Construction Authority manages new school construction and renovation of the City’s existing school buildings for the Department of Education. Over the last seven years, the City has improved construction efficiency and implemented a comprehensive capital planning process that ensures school construction keeps pace with student demand. Through these efforts, more than 100,000 school seats have been constructed since 2003, including 24,995 in the Bronx, 24,463 in Brooklyn, 12,987 in Manhattan, 32,524 in Queens, and 5,619 in Staten Island.

Spending going directly to schools would decrease along with the number of teachers in the city, while spending on instructional administration, transportation, and school food would all increase if Mayor Bloomberg’s proposed 2012 budget is passed.

Those are among the findings of an analysis of the mayor’s proposed 2012 budget released by the Independent Budget Office today.

The budget also calls for cutting spending on general education and special education instruction by between 1 and 2 percent and making large cuts to funds for school facilities and safety. The cuts to classroom spending include the loss of more than 6,000 teaching positions, with more than 4,600 of those positions lost through layoffs.

Meanwhile, spending on the DOE’s central administration would grow by 10 percent from this school year, though it would still be lower than it was between 2005 and 2010.

The IBO analysis also predicts that the city will have a slightly smaller surplus to roll over into next year than the Bloomberg administration has estimated, $2.9 billion compared to the mayor’s estimate of $258 million more. The surplus has attracted attention from the teachers union, which points to its existence to argue that the mayor shouldn’t have to lay off teachers.

But the analysis shows that neither surplus would be enough to use to plug the projected 2012 shortfall.

The IBO actually estimates that the city will actually still have a small shortfall of roughly $200 million in 2012 even if the city makes the dramatic cuts proposed in Bloomberg’s budget and even if the state sends the city the extra $600 million in funds it is requesting.

Although spending on services to schools is declining by $207 million, both the overall Department of Education spending and the city’s contribution to it are increasing.

That’s because the city has seen a shift in the distribution between two sets of education spending — funding that goes to district schools, on one hand, and funding that goes to charter and nonpublic schools, on the other. For the first time since at least 2007, the first pot, to district schools, is actually decreasing, but the amount sent to charter schools and nonpublic schools is rising.

The increase is driven in part by an increase in enrollment at charter schools, which the city funds based on a state formula. Other programs under this bucket include special education pre-kindergarten programs, contract schools, foster care programs and so-called “Carter Cases,” which require the city to reimburse parents for private tuition for students with special needs that public programs do not serve.

The amount of money that the Department of Education has spent on charter schools has tripled in the last four years, the report says, with funds for next year set to increase 30 percent from this year. The funding has increased because enrollment at charter schools has grown as more schools are opened and older schools grow to serve more grades.

While the number of students enrolled at city charter schools has been growing and will almost certainly continue to grow as the schools expand and more open, the report notes that the city has not seen a decline in the number of students enrolled in traditional public schools.

“Regardless of how many charter school students would otherwise have attended public schools, the fact remains that — at least for now — the public schools are being asked to educate roughly the same number of students with a reduced budget available for services to schools,” the report says.

Today’s report focuses on explaining how the mayor’s budget distributes funds and presents the office’s revenue predictions. In several weeks, the IBO will release another report offering alternate budget options that could be adopted.

Read the IBO’s full report (PDF) here .

It’s still unclear whether state budget cuts to education will necessitate layoffs at the scale Klein described — a total of 8,500 teachers in the most draconian scenario. The state legislature is working towards an April 1 deadline to pass a budget, and while the Senate and governor’s proposed budget would cost the city schools more than $400 million at a minimum, the Assembly is reportedly planning far less severe cuts.

But at the City Council today Klein stuck to his doomsday predictions, outlining how the 8,500 layoffs would hit each school district. Under the state’s current “last in, first out” method of cutting the most recently hired teachers first, neighborhoods from the South Bronx to the Upper East Side — which have the highest density population of younger teachers, due mainly to either high turnover rates or enrollment spikes — would lose nearly a fifth of their teachers immediately next year, Klein said.

Eight other districts in those areas, mainly in Manhattan and the Bronx, would all lose more than 15 percent of their teachers to layoffs. (The Department of Education’s full list of how each district would be affected by layoffs is below the jump.)

Testifying after Klein, teachers union president Michael Mulgrew argued that mass firings are unnecessary, even under severe budget cuts. He accused the chancellor of exploiting the city’s dire financial situation to achieve the political end of changing the city’s hiring and firing practices, a strategy he called “distressing.”

But Klein characterized the DOE’s fiscal situation as so dismal that officials have no choice but to fire teachers. Half of the DOE’s $22 billion budget is comprised of costs the department cannot control, like pensions and debt obligations. Central administrative costs have been reduced to three percent of the DOE’s budget, Klein said, and cannot be reduced much more without hurting schools — an argument critics will no doubt contest. The remaining $8 billion is controlled by principals, who spend most of that money paying teachers.

Klein and Mayor Michael Bloomberg are aggressively lobbying Albany to change the last-in first-out policy. Today Klein argued that the requirement forces schools not only to fire outstanding younger teachers, but also to make layoff decisions without regard to teachers’ expertise and individual schools’ needs.

He forecast a huge shuffling of teachers from school to school, as teachers at schools that are not eliminating teacher positions but who are the most junior in their districts are fired and replaced by older teachers. ”What you get is this bumping musical chairs effect which is chaotic across the board,” Klein said.

Klein also argued that the firing regulations will lead to increased class sizes because the city will be forced to fire more teachers for the same savings. (For the same amount of savings, the system could either fire a single, expensive senior teacher or several less expensive junior teachers.)

Council Member Lewis Fiddler countered that Klein’s line of thinking creates an incentive to fire older teachers. “Aren’t you putting undue pressure on principals to lay off the most senior teachers?” Fiddler asked.

Klein replied that a better system of teacher evaluations would prevent outstanding senior teachers from losing their jobs.

“Schools are held accountable, so they’re not going to lay off their best senior teacher,” Klein said.

Here are the city’s estimates for the percentages of teachers each district could lose, based on how principals have chosen to excess teachers in the past. Note that although the column says “percent positions lost,” the chart actually tracks the number of current teachers in each district who would risk losing their jobs. If layoffs do happen, it hasn’t yet been determined exactly how schools would lose their most junior teachers, DOE spokeswoman Ann Forte said today. But in any layoff scenario, districts that have hired more teachers in recent years — hard-to-staff districts with lots of turnover and the districts that have seen large spikes in enrollment — would be most disrupted.

Source: NYS Division of the Budget; NYC DOE

The budget plan that the Senate passed yesterday essentially preserves the $1.1 billion in cuts to school aid statewide that Governor David Paterson proposed in January. That would mean a cut of over $400 million to the New York City schools for the next fiscal year, according to the state’s Division of the Budget. And that figure doesn’t even include cuts from the city that are likely to soar above $300 million.

Under the plan, state funding to the city schools would drop to $7.95 billion, below the level of the 2007-2008 school year, when the historic funding increases triggered by the Campaign for Fiscal Equity lawsuit began. (See the chart above.)

The cuts are even more challenging considering that costs beyond the city’s control like teacher pensions and salaries have skyrocketed in the last several years.

No state cuts will be final until the Assembly signs off on a similar bill. Even if the Assembly eases the blow, though, big cuts in city spending will likely come next. Earlier today, city Budget Director Mark Page sent a letter to city agency heads asking them to prepare for further cuts in anticipation of Albany’s eventual budget — on top of cuts that have been planned since Bloomberg laid out a draconian budget (PDF) in January.

The first budget laid out $317 million in cuts to the Department of Education, a 4 percent cut. Now, Page is asking school officials to prepare for an additional 2.7 percent cut.

When they testified in Albany earlier this year, Bloomberg and Chancellor Joel Klein argued that the real cost of the budget cuts to the city school system would be even worse than the governor’s budget proposal suggests. In his testimony, Klein estimated that the cuts to city schools would hit closer to $600 million, because of changes in costs and a freeze in the foundation aid that the city receives.

Another detail to note: the Senate’s plan has preserved the total amount of the governor’s proposed cuts but changed how the cuts would be distributed statewide, but I have yet to see exactly how the Senate’s distribution would hit New York City.

That question is essential for the counterintuitive reason that positions cut at schools actually don’t save the system any money. If a principal can’t pay for a teacher, the teacher goes into a pool of “excessed” teachers whose salaries are paid by the department. That pool already contains more than 1,700 people and has been criticized as a burden on the city’s budget. If the size of the pool swells because of the budget cuts, the department could end up shouldering thousands of teachers’ salaries — all while the teachers aren’t officially on a school’s staff.

Department of Education staff are still crunching the budget numbers, officials say. The department’s chief operating officer, Photeine Anagnastopoulos, told me on Tuesday that the excess situation was shaping up to be “not as bad” as she and others had anticipated, particularly considering that principals haven’t yet launched the bulk of their hiring for the fall.

But a source familiar with the budget process says the numbers have been delayed because the department is “scrambling” to check principals’ math about whether they need to cut positions. Staff at the department’s service centers are “going over budgets in high-excess schools trying to negotiate fewer excesses,” the source said.

An added complication, the source said, is that a reorganization within the department means that the service centers are short-staffed right now.

The teachers union is also reviewing cuts that union representatives at each school flag as being unnecessary, vice president Michael Mulgrew told me. “They’re reviewing every school and we’ve been investigating and will continue to monitor very closely,” he said.

Whatever number of excessed teachers is announced in the coming days, it is certain to decrease over the summer, Anagnastopoulos said. “The hiring hasn’t started yet, only the excessing,” she said. Hiring restrictions currently in place mean that principals will have to turn to the pool of excessed teachers first when filling most open positions.

“Right now I’m pretty confident that we’ll be able to manage it,” she said. 

Principals are reporting having to excess large numbers of teachers because of the budget cuts, according to GothamSchools’ interactive budget map and other sources. In addition to the teachers whose jobs are budget cut casualties, some teachers are winding up in the pool because the department is closing or phasing out their schools. At PS 27 in Brooklyn, which is shedding 10 grades, 72 teachers are slated to join the excess pool, for example.

Education-related budget adjustments proposed by the City Council.

As the City Council hunkers down to vote on the city’s budget today, it appears that schools aren’t going to get a big last-minute budget boost.

The council included about $25 million for the city schools in a list of budget adjustments (pdf) released last night. That’s about a fifth of what the council added into last year’s budget at the last minute, when it restored more than $120 million in budget cuts in addition to making sure council members’ pet projects got funded.

One restoration that looks like it will happen this year is for Teacher’s Choice, the program that gives classroom teachers discretionary funds to use for supplies. The council is allocating $13 million for the program next year, the same amount that was spent on it this year. The amount for 2009 came out to $150 per teacher, down from $220 in 2008.

Another adjustment that could relieve pressure on the city schools is for childcare centers currently operated by the Administration for Children’s Services. The city proposed eliminating many of the centers and diverting their students into public school kindergartens. Elected officials had been lobbying to reverse the cuts, which would increase class sizes in some kindergartens to 25. The restoration is for $8 million, which the council says will allow “a portion” of the 31 childcare centers currently at risk to stay open.

Other school-related budget adjustments include money for custodial services, funding for a group that is lobbying the state for more school aid, and aid to help schools keep state-funded half-day prekindergarten classes open longer.

When he first got his new budget from the Department of Education, the Brooklyn principal, who asked to remain anonymous, saw a cut of almost 5 percent, as Klein had warned. That amount was significant, but he could handle it. Things looked much worse when he saw that his expenses were also rising, by nearly the same amount that was being cut. In total, he said, his effective budget is set to drop by 8.5 percent, a size that means he will probably have to let go at least one teacher.

The second surprise came when he realized what was driving the rising costs: The arguably good news that staff members at his school, from teachers to school secretaries to administrators, are sticking around. That means they have more years of experience than they have in the past — and therefore must be paid more, thanks to the salary structure in schools gives teachers and other employees, including the principal himself, more money every year they stay in the system.

Klein explained the phenomenon at a recent City Council hearing on the Department of Education’s proposed budget.In the past few years, the city’s average teacher salary has been edging upward, a result of better teacher retention, Klein said. That wasn’t a problem in the past because the system’s budget was expanding faster than the salaries were increasing. But this year, Klein said, the department’s overall budget is staying flat, turning salary increases into what is effectively a system-wide budget cut.

The same phenomenon is happening at the school level. Holding onto teachers helps schools maintain stability, but it also means their budgets are locked into annual increases. The recession could inflate costs even more, since fewer teachers are expected to leave their jobs in the tough economy. That means teachers who in other years would have exited the system and been replaced by younger, lower-paid teachers are instead staying in the system and racking up salary increases.

The principal I spoke to said his 8.5 percent budget cut is going to force some tough choices. Even before he realized that was his number, he considered cutting down on payments for teachers who work extra hours, buying fewer supplies, and forgoing substitutes when teachers are absent. Now, he says he’ll talk to teachers at the school to brainstorm ideas about what to cut before the June 18 deadline to submit his budget. (What is your school cutting?)

Yet even as he struggles with the cuts, the principal said he is glad things aren’t worse, which they could have been. “Thank God — and Obama’s election — for ARRA,” the principal said, referring to the American Recovery and Reinvestment Act, the official name for the federal stimulus package. Without the hundreds of thousands of dollars that the stimulus put back into his school’s budget, the school would have been down more than 15 percent of its budget, he said.

“Could we function without it?” the principal asked. “Probably not.”

Hundreds of parents, children, and day care workers protested proposed cuts to early childhood programs today at City Hall. (GothamSchools’ Flickr)

With the deadline for next year’s city budget looming, elected officials are eyeing early-childhood centers slated to be cut under Mayor Bloomberg’s proposed budget as a key reduction to reverse. More than a dozen officials, including two mayoral candidates and three out of five borough presidents, decried the possible cuts today at a City Hall rally alongside hundreds of parents and workers associated with the centers.

The proposal would cut the budgets of early-childhood programs and replace kindergarten programs currently operated outside of the school system with Department of Education kindergarten classes. The city says that moving the kindergartens is necessary in order to save the Administration for Children’s Services $15 million.

But parents today said that the current programs cover the burden of child-care in a way that schools, which end at 3 p.m. and are shuttered on holidays, cannot. The programs at risk of being shut are operated out of ACS, the city’s social services arm for children, as part of larger daycare operations. Head Start, the early childhood program, is also slated to see its budget slashed by 3 percent.

Desiree Jean-Mary said she is upset that her son, Joshua, who attends a Head Start program in the Bedford-Stuyvesant section of Brooklyn, might not be able to continue there next year when he enters kindergarten. Right now, Jean-Mary, who has two other children, picks Joshua up at 5 p.m. after her job as a home health aide is over for the day. “It would be really hard if I had to find somewhere else for him to go — I don’t want that,” she said.

Other parents said that they worry that programs for younger children will be forced to extend for a shorter period of time, forcing them to find alternate child care that would last through the end of their work days.

Elected officials used the rally, which was organized by the AFSCME public-employees union, which represents ACS workers, to criticize Bloomberg. “If you keep getting on our last nerve, we’re going to turn Gracie Mansion into a daycare,” Councilman Charles Barron, a staunch Bloomberg antagonist, said as the crowd cheered.

Tony Avella, a council member who is running for mayor, made a plug for his campaign while condemning the childcare cuts: “In a Tony Avella administration you won’t have this problem,” he said. Thompson, who’s also running, was more subtle. “The mayor is putting money before children,” he said, echoing a theme of the rally.

“We can’t balance the budget on your backs,” the council’s finance committee chair David Weprin said to the crowd.

There is some argument about exactly how much money the plan will save the city. The New York Daily News reported that moving the kindergarten programs would actually cost taxpayers an extra $7 million as the cost of education would simply shift to other agencies, not disappear. School officials are disputing that. In order to absorb the new students, the Department of Education said it will need to lift a limit on kindergarten class sizes to 25 from 20.5 to accommodate extra students.

Individual schools will still be able to use their budgets to add new teachers if they are able, but the DOE is planning to cut school budgets so far that many schools will have to shed teachers, DOE officials revealed. And any new hires, to replace teachers who leave, will have to come from teachers who are already in the system, according to new rules the department is implementing.

Klein informed principals about the hiring restrictions, which the department says should allow it to avoid actually laying off teachers, this morning during a Webcast and just now in a memo, which is included at the end of this post. The department is planning to give principals more detailed information about their schools’ budgets during the week of May 18.

Speaking to reporters today, a top DOE official, Photeine Anagnostopoulos, said she could not predict how many schools would need to eliminate teachers but said that a “high percentage” might be able to cut their budgets sufficiently by reducing non-teaching staff and axing programs. She said “the goal” for the department is for all schools to make the same percentage cut to their budgets. That size of that cut has not yet been finalized, she said, adding that principals would ultimately have discretion about how to cut their own budgets.

The new restrictions require principals to fill vacancies created by attrition by picking up current teachers who are either in a classroom elsewhere in the city or in the existing pool of excessed teachers, which already includes about 1,100 teachers. The size of the excessed teacher pool is likely to grow as principals determine that they must reduce their teaching staffs for next year because of the budget cuts.

Schools that must cut teachers will have to do so according to strict rules that include a requirement that the newest hires in each credential area go first, Larry Becker, the DOE’s head human resources executive, said today. Excessed teachers will not stay on the school’s payroll, as they have in the past, he said.

Also affected will be people who have been accepted by Teach for America or the city’s Teaching Fellows program. Becker said he anticipated that those people, who typically teach in shortage areas such as special education, would ultimately be hired by schools. But until they are, he said, the DOE will not add them to the system’s payroll.

Anagnostopoulos emphasized that the new restrictions do not represent a return to the system of forced placement, when senior teachers could “bump” newer colleagues out of positions in schools. “We are not force-placing people into schools,” she said. ”We are saying that the pool from which you as principals can choose is the pool of existing teachers.”

Responding to questions about how the cuts will affect the DOE’s central administration, Anagnostopoulos said recent budget cuts have hit Tweed disproportionately hard. She said the department would continue to fill vacant positions in its central administration but would not create new positions. “I can’t tell you when the last new hire was made,” she said.

The new restrictions suggest that the department’s true budget picture is closer to what Klein described before the City Council in March than the relatively rosy picture that Mayor Bloomberg painted last week. In March, Klein told the council that although the DOE would likely escape teacher layoffs, a significant number of other staff members might have to be laid off. Anagnostopoulos confirmed that scenario today.

The reason for the discrepancy, Klein said then and DOE officials said today in a conference call with reporters, is that the DOE’s costs are set to rise significantly because of collective bargaining agreements that guarantee certain pensions and salary increases, and because of increased costs associated with educating children with special needs.

Below is the memo that principals just received from Chancellor Klein:

Dear Colleagues,

Thank you for joining me on this morning’s webcast. I thought it was a productive conversation and I appreciated your questions. We will post the video of the webcast on the Principals’ Portal so that those of you who were not able to join us will have the opportunity to watch; in the coming days, we will be following up with more answers to the questions that you asked this morning.

In this note, I will reiterate the key points that I made during this morning’s conversation.

I don’t have all the answers-but my goal is to give you all the information I have so that you can plan more effectively for the coming school year. I feel strongly that principals are in the best position to make key educational decisions for their schools, and I want to give you the tools you need to exercise the kind of leadership that the City’s schools and schoolchildren need in these tough times. This is a hard year-and while the Federal stimulus package is making it more bearable, it does not make us whole from a budget point of view. We still face a substantial budget gap and we’re anticipating significant cuts to school budgets. The City and the State are both facing significant declines in revenue as a result of Wall Street and the overall economy.

As you know, this isn’t the first year when we’ve faced budget hardships in our school system. In the last eighteen months, we have already taken three budget cuts. We have consistently made every effort to protect schools and classrooms. During this time, we have eliminated more than 550 positions, or 8%, of the total positions in our central and field offices. We will take more cuts to central and field administration for the upcoming fiscal year, but with our central and field budgets representing only 3% of the total DOE budget, we have no choice but to find savings in our schools and classrooms. Keep in mind that we have many costs-from food and transportation to debt service and pensions-that are the price of running a big school system like ours. We have no control over many of these costs and cannot cut back in these areas.

There are a number of factors that will affect the final numbers for the 2009-10 school year, but it’s important that you know how the budget situation will affect your hiring decisions and the budget timeline for the rest of the school year. Here are the three most important facts:
FIRST, as you’ve heard me say before, principals are in the best position to know what their students and schools need to excel. This year, even though our budget situation is far from ideal, we are maintaining this principle of empowerment. We want to give you the support and flexibility you need to continue focusing on academic achievement.
SECOND, we’re expecting that the cut will be an across-the-board percentage reduction to all schools’ total budgets. While the percentage will be the same for all schools, schools will take the cuts in different ways, depending on their mix of funding streams and their mix of personnel and non-personnel allocations.
THIRD, we are going to reduce spending without laying off teachers. This is because any layoff of teaching staff is done by seniority, which would require us to force-place teachers until the least senior teachers in the City were laid off. This bumping of staff would violate the principle of empowerment and cause the kind of disruption that we need to avoid. As a result of attrition and your individual decisions to meet budget, the overall number of teachers is likely to go down, but no current teachers will be laid off. This means you will need to look carefully at cutting back other school staff and making reductions in non-personnel areas.

OUR BUDGET SITUATION

In January, when I testified before the State Senate Finance Committee and the State Assembly Ways & Means Committee in Albany, I said we faced a $1.4 billion budget gap. Thankfully, our situation today-because of the Federal intervention-is not nearly that bad. The American Recovery and Reinvestment Act will help the Department of Education avoid the situation I outlined in January for the 2009-10 school year. This Federal Stimulus Package money will go a long way-and help us to avoid massive layoffs. However, many of the costs over which we have little or no control have been growing. This leaves us with a substantial funding gap.

Between Fiscal Year 2009 and 2010, the price of education has gone up as teachers’ salaries have risen and as the mandated costs for special education services have grown. We also remain committed to some key priorities that the Mayor and I believe will help our schools and our students excel: things like giving you the tools you need to monitor students’ performance and progress; closing down failing schools and replacing them with new schools; and creating innovative programs like schoolwide performance bonuses to reward teachers who are successful at helping students make progress. As we face the 2009-10 school year, we all must start thinking about how we can cut back.

SCHOOL BUDGETS

The numbers are not set in stone; there are many variables. As we work to firm up the numbers, I want you to be able to start planning.

For starters, you should know that we plan to send you your preliminary 2009-10 school year budgets in the week of May 18. When you receive your budget, you will see how much you have to spend during the coming school year, and you will begin to make decisions about where you should cut back. I want to make this point clear: even in this challenging time, we are sticking with the principles that are at the heart of Children First. Our focus, as always, remains firmly on student achievement. We need to figure out a way to make sure our schools and students continue making academic progress, even as we cope with our budget situation. That may not be easy, but it’s what leadership is about.

As you approach this decision-making process, you should know that if you are one of the 825 schools that rolled over money from this school year, you will be able to use these funds to offset your cuts. In all, schools rolled over $95 million.

Even so, as you can imagine, the magnitude of the necessary cuts across our school system will mean that most schools will need to significantly reduce OTPS, per diem, and per session spending. This means potentially large cuts to after school and supplemental programs.

Some schools will have to reduce non-teaching personnel. Some schools will decide not to backfill positions, including teaching positions, which open up due to attrition. Many schools will need to eliminate teaching positions in order to make their cuts. As teaching positions are eliminated and as some vacancies are not backfilled, we predict that our system will have a couple of thousand fewer teachers next year. Just to be clear, in a normal year, if 4,000 teachers left the City’s public schools, we would hire 4,000 brand new teachers into the system. This year, we anticipate that we will not hire as many new teachers as leave through attrition. This means the number of teaching positions in the system will drop. But while some schools will lose teaching positions, others will not. At more than half of our schools, between the surplus roll, relatively large OTPS budgets, and other non-teacher funds, there will likely be enough money to implement cuts without eliminating any teaching positions.

STAFFING

In deciding how to implement the necessary reductions, we knew we could tell schools how to take cuts or we could allow schools to make the best decisions for their communities. We decided against the top-down approach, so we could give you the discretion you need to make the best decisions for your communities. In return for giving you this flexibility, I need to place certain restrictions in almost all school titles for the remainder of this fiscal year and next year.

Most significantly, effective immediately, you may only hire existing DOE staff, as opposed to people from outside the system. That means you must hire people who are working in other schools in the same titles or people who are in excess in those titles. Here are the specific restrictions:
Teachers: There will be no forced placements or layoffs of teachers. You may only hire existing DOE teachers, as opposed to people from outside the system.
Guidance Counselors, Social Workers: At this time, there will be no forced placements or layoffs of these employees. They will be treated the same as teachers, so you can only hire individuals who are already working in the same titles in our system.
School Secretaries, Paraprofessionals, School Aides, Family Workers: We will work to place excesses in vacancies and evaluate the situation to determine if layoffs are necessary.
Parent Coordinators: You may not eliminate your parent coordinator position. If your parent coordinator leaves, you may hire a new one either internally or from outside of the system.
Assistant Principals: You may not excess APs. To avoid any increases in the excess pool overall, given the limited number of assistant principal vacancies that we can expect, assistant principals should not be excessed. Vacant positions may be eliminated, and you can fill vacancies under existing procedures with any qualified candidate.

We are imposing these restrictions because we cannot afford to support a growing excess pool, which currently includes 1,400 staff in all titles. Any growth in the excess pool means less money that can go into schools and classrooms. The goal here is to try to absorb the reductions systemwide through attrition. We know there might not be an exact match at each school, but systemwide, there is a high likelihood that the number of reduced teaching positions can essentially be matched by vacancies created due to attrition.

Although you will have the discretion to make the cuts you feel are in the best interest of your schools, you should look carefully at non-personnel areas such as per session and OTPS. My staff will be reviewing your preliminary decisions regarding your budgets so that we can get a sense of what the overall impacts are on the system. While you will have the discretion to make the decisions you think best fit your schools, if these decisions seem to tilt too heavily toward excessing, I will ask that you rethink your budget priorities.

We will review our hiring restrictions weekly, and as we move forward, we might lift them in certain geographic and subject areas. For example, we may hire new teachers in shortage areas like special education and science. It is possible that for some subject and geographic areas the hiring restrictions will continue to be in effect through the opening of school.

So, to be clear: at this point, you can interview and select any teacher who is currently working in a public school or is in the excess pool. As in past years, you can use the Open Market system for this purpose until August 7, when it closes. The Open Market includes both excessed staff and employees who wish to transfer. It is worth remembering that teachers newly excessed by the budget cuts will, for the most part, be new teachers who many of you have hired in the past few years.

Some of you might have made informal commitments to prospective candidates outside of our system. You should reach out to these people and tell them that they will have to wait; those jobs might not actually be there and that you are unable to hire them at this time. We are making no commitments to candidates, including Teach for America and Teaching Fellows candidates, although these programs are recruiting teachers for shortage areas where there is a stronger possibility that we will have some new needs in the coming months.

New schools will be partially subject to the new hiring restrictions. Many new schools are already under a contractual requirement to hire half of the qualified staff from closing school. All new schools must hire at least 50% from current staff (from the closing school or elsewhere in the system), but will be able to hire 50% of their teachers from outside of the system. This applies to new schools that are ramping up during their first three years.

I want to reiterate that for our hiring restrictions to work so that we can avoid bumping and forced placement, schools have to commit to hiring from within the DOE. We are going to place limitations on part-time hiring and the use of substitutes as these strategies will also undermine our ability to avoid increases in the excess pool. In addition, I want to emphasize that you should not, indeed may not, use excessing as a means of removing staff with performance issues from your schools. There is another way to deal with performance issues and we will support you in those efforts. While these restrictions limit your choices more than in most years, it is the only strategy that will preserve choice. You can decide whether to hire and whom to hire, so long as the teacher comes from within the system.

NEXT STEPS

We expect to get budgets to schools in the week of May 18. At that point, you will be able to work with your ISC and SSO budget representatives to plan your budget for the coming school year. Each school will face different choices. It is important that you work with your teachers and the other members of your school community to make the best decisions with respect to your budget.

We will review the school budget submitted by each principal to ensure that indicated reductions in teaching positions will be covered by the expected attrition across the City. If not, the principals will be provided with additional guidance to avoid some of the proposed reductions in teaching positions.

Principals with expected teacher openings from attrition and enrollment growth should immediately inform their ISCs. This way, we will be able to help you plan. You, of course, retain the power to decide who you hire.

We will hold budget meetings at the Citywide and Community Education Councils in May and June. The Panel for Educational Policy and the City Council vote on the budget in June. This is the moment when everything is finalized, so until this moment, we are working in a situation of uncertainty.

CONCLUSION

We know it’s going to be a challenging year, but working together, I’m confident we can keep focused on our shared goal of student achievement. During this difficult time, I would like to thank you for your hard work and support. I don’t think there’s any group of people better equipped to make this work than New York City principals.

If you have any follow up questions, please email DOEstaffing@schools.nyc.gov. I also encourage you to come to one of two sessions-on May 13 and May 20-when I will be discussing more details of this year’s budget situation with principals. You can register for one of these sessions by clicking here: www.zoomerang.com/Survey/?p=WEB2295TMATML6. If you have specific questions about your school, you can always contact your ISC or CFN staff.

Sincerely,

Joel I. Klein

The chart plots a dot for every school that received state money to create new classrooms. The dot represents the amount of money the school received, and the amount that the school's average class size changed. (Data via the Department of Education)

We’ve already reported that average class sizes citywide did not decline last year, despite an infusion of money meant to reduce them. New data suggest the same relationship happens at the school level: Even schools that reported spending hundreds of thousands of dollars on class-size reduction efforts, such as creating new classrooms, did not necessarily see a drop in average class sizes.

Rather, while some schools that reported investing in new classrooms did end up reducing class sizes on average, others actually saw their average class size go up. The data, provided by the Department of Education following a tug-of-war that you might recall, are summarized in the graph above and in a searchable file available here.

The major challenge, according to the schools official who compiled the data, Tania Shinkawa, is not that principals didn’t spend the money as they were supposed to, but that even that pot of money didn’t guarantee that they could lower class sizes across the board.

Take Bronx elementary school PS 57, which reported that it spent $190,000 to open new classes. Let’s be generous and say that the money could pay for three additional teachers. That could go a long way toward reducing class sizes in three grade levels. But would it necessarily lower the entire school’s average class size?

No. That would depend on how many students enrolled at the school, especially in grades and subjects that didn’t get new teachers. It would also depend on the rest of the school’s budget outlook, which, as school officials pointed out when they first released basic class-size data, has not been so good lately. And it would require the school to hire only inexpensive, and therefore inexperienced, teachers. In fact, PS 57 did see its average class size drop by more than one student. But another school, PS 54 in the Bronx, received $185,000 but saw class sizes shoot up on average by about 3 students per class.

The new figures add to reports challenging the effectiveness of the state’s Contracts for Excellence program, which was trumpeted for its novel decision to demand that education dollars produce specific, concrete policy changes — including class-size reduction. The money schools received last year to create new classrooms was part of the Contracts for Excellence program. The database includes how much money each school reported it spent on both adding new classrooms and using team-teaching to bring down the teacher-student ratio. (The graph above reports only on the money dedicated to adding new classrooms.)

Another possible explanation for why the schools did not all see their class sizes decline: They may not actually have spent the money as they said they did. Look through the database and let us know how your school’s reported spending compares to reality.

One other note about the data: There are obviously some major outliers here, as it’s hard to imagine how a school that could really see class sizes going up or down by an average of 10 students. These may simply be a few cases of bad or misleading data.

The proposed budget might still be harmful to schools, Weingarten implies in the statement:

Our schools have already absorbed cuts upwards of 10% over the last two years, and teachers are already doing more with less every day to provide a safe, nurturing environment for their students. Important after school programs such as tutoring and academic intervention services have already been affected. Additional cutbacks have the potential to dramatically alter the landscape, and attrition may mean jumps in class size.

Weingarten also argues against the creation of a new pension tier that would provide reduced benefits for employees hired in the future, something Bloomberg has been pushing to cut city costs. Earlier this spring, the UFT announced that it had identified ways for the city to save millions of dollars that would make a new pension tier unnecessary.

Weingarten’s complete statement is after the jump.

These are difficult times, and the Mayor has proposed a budget that, while we still have concerns about it, is thoughtful and responsible. We at the UFT have been working together with the city throughout this extraordinary year, first in Washington to secure federal stimulus funding, then in Albany to get restorations in the state budget, and now on behalf of working families to resolve the MTA crisis. Today’s executive budget announcement is a reminder that our work is far from over.

Our schools have already absorbed cuts upwards of 10% over the last two years, and teachers are already doing more with less every day to provide a safe, nurturing environment for their students. Important after school programs such as tutoring and academic intervention services have already been affected. Additional cutbacks have the potential to dramatically alter the landscape, and attrition may mean jumps in class size.

The Mayor once again raised a new pension tier as part of his presentation. What remained unsaid is that the pension improvements the mayor wants to jettison were in fact negotiated by city workers many times in lieu of salaries. For working and middle class families, pensions are a very important part of retirement security. Yet, there are other steps that can be taken to help further reduce the budget gap. For example, unions are ready to work with the city to secure more than $200 million in health cost savings, which is the equivalent to $600 per worker, and a retirement incentive for eligible educators would produce more immediate cost savings.

No one wants to see schools or students lose programs or services, and so moving forward, we need to work together to confront the challenges ahead. We have spent the better part of the last year fighting to preserve the safety net for New Yorkers, and we look forward to working with the administration in the months ahead. Now is the time when our kids need us to step up and be courageous. They need a quality education, and they need stability. We can’t turn our backs on them now. It would be tragic if we did.

An April 8 memo from the city’s budget director asked the DOE to cut 1.5 percent from its proposed operating budget through layoffs or attrition. The cuts will come on top of $251 million that the mayor proposed slashing from the DOE when he first released a 2010 budget plan, in January. The DOE has already revised its budget down $1.9 billion in the last year, down over 10 percent. This new 1.5 percent cut would chop off about $260 million more.

The city cuts will be much more manageable thanks to an influx of federal stimulus dollars to the city schools. But a City Council source said that, as currently proposed, they will still be dramatic.

“There’s huge, gigantic cuts proposed in the city’s school budget, and unless there’s some miraculous turnaround in the economic forecast, I don’t think anyone expects an increase in city funds going to schools,” the source said.

Ann Forte, a DOE spokeswoman, said school officials will brief principals on the financial situation tomorrow. Forte said the funding situation is “fluid,” since a few months remain before the City Council could choose to allocate more funds to the DOE in its June budget. The city budget must be finalized by July 1, the beginning of the city’s new fiscal year.

Schools Chancellor Joel Klein told City Council members last month that he was worried about having to lay off as many as 2,000 city teachers if the state didn’t channel sufficient federal stimulus money to the city schools. An April 1 City Council report on the mayor’s January proposed budget said the state’s revised budget, buoyed by stimulus dollars, would prevent teacher layoffs.

Charter school supporters are downplaying the distinction and keeping a thankful tone toward Paterson and Smith. But it means that the schools, which are publicly funded but operate outside of the regular district system, will remain in limbo for at least a few more days as to how much money they can actually expect to get. It’s also not yet clear how the pot will be distributed between charter schools.

Peter Murphy, of the statewide lobbying group for charter schools, which played a role in brokering the deal with Smith and Paterson, said that he’s satisfied with the fund, even if it will be smaller than $30 million. “Were assuming ‘up to’ doesn’t mean half, but it may not mean the full thirty,” he said on the telephone this morning. “Sure we would have liked the whole thing, but school districts aren’t happy with their small increase, either.”

The worst examples of overspending on DOE contracts, according to Comptroller William Thompson.

Department of Education contracts routinely cost the city far more than initially estimated, according to an analysis that City Comptroller William Thompson issued just before today’s City Council hearing. The under-estimations could be costing taxpayers a fortune in the price of things like Xerox machines and cafeteria equipment, whose prices could be negotiated at much lower rates if the city could accurately predict just how much schools would end up using them.

One out of every five DOE contracts that ended in the last two years went over its estimated cost by at least 25 percent, according to Thompson’s analysis. In the most egregious overrun, a contract with Xerox Corporation to lease copy machines to schools ended up costing the taxpayers more than $67 million. It had been estimated at a cost of $1 million.

In a crossly worded letter sent to Chancellor Joel Klein today, Thompson, a mayoral candidate who has been highlighting public school issues as part of his criticism of Mayor Bloomberg, called the overruns part of a “troubling pattern of mismanagement” at the department.

Department of Education officials strongly disputed Thompson’s accusations and his figures in an interview and in testimony to the City Council today. The contracts at issue, called “requirements” contracts, can stretch above their estimated costs because they never actually set a total amount of services to be provided. Instead, they set a certain price for the service — say, renting a copy machine, or of placing a classified ad — and let the number of times the department will buy the service stay open-ended.

School officials said that spending more on these contracts than was expected is not necessarily a bad thing. “Whether it’s that more schools actually want the service, that it was actually successful, or whether we found that there was more need in the school, they required more training, say — that’s why you see those contracts,” Photo Anagnostopoulos, the department’s chief operating officer, told City Council members today.

School officials also said Thompson’s analysis overstates the difference between projected and actual costs, sometimes “wildly.” Contracting staff at the department have already found several cases where the comptroller’s figures are “wildly different” from their own records, David Ross, who runs contracting for the department, told me in an interview.

Ross said that city records show that the Xerox contract was estimated originally at $31 million, not $1 million, as Thompson reported. That means the overr-run was $36 million, not $66 million. He said another contract for copy machines, with T&G Industries, was originally estimated at a higher cost than it ended up being: $31 million, compared to an ultimate cost of about $14 million. Thompson’s report said T&G’s estimated original cost was $1 million.

In his letter to Klein, Thompson argues that under-estimating how much schools will want to use a service hurts the Department of Education’s leverage in negotiating a low price. He describes that as “contrary to sound business practice.” In an interview with reporters today, he called the practice “frightening.” “If it was a few contracts that would be one thing,” he said. “But…the over-spending continues and continues to grow.”

Ross said he agrees that under-estimating the amount of interest schools have in services could be a problem if it means giving up opportunities to negotiate a lower price. (If the school system knew it was going to buy, say, a thousand Xerox machines rather than 10, it could probably persuade Xerox to lower the price of each machine.) “I understand my responsibilities here,” he said.

But he said that the department does hunt for these kinds of opportunities. In one of the cases the comptroller’s letter to Klein highlights, a contract with Meizner Inc. for computer software, the department actually realized a few years ago that it was spending above its estimate — and negotiated a 20% price discount.

The comptroller’s report lists the estimated cost of the contract at $135,000, which then ballooned to spending of $5.6 million. Ross said his figures suggest the actual estimated cost was $1.35 million. He said the $5.6 million figure could have been even higher had officials not negotiated a price discount.

The comptroller’s letter to Klein and full press release are after the jump.

Thompson’s press release:

THOMPSON EXPOSES “RUNAWAY CONTRACTS” AT THE DEPT. OF EDUCATION

-Comptroller probe finds 1-in-5 contracts balloon past costs, including one that jumped by 6,700 percent-

New York City Comptroller William C. Thompson, Jr. today charged that the Department of Education has routinely let hundreds of contract costs balloon well past their expected costs – including one that jumped by 6,700 percent.

“It’s simply a case of runaway contracts,” Thompson said. “It’s reprehensible that the Department of Education plays by its own rules and goes on some insane spending spree. And who pays? Taxpayers, parents, children, all of us.”

Thompson aimed his harsh criticism in a harshly worded letter to Schools Chancellor Joel Klein for not containing the swollen contract costs. Thompson then submitted testimony spelling out his fiery findings to the New York City Council Committees on Education and Contracts.

“The Department of Education continues to maintain a long-held and ill-considered opinion that its contracts and other purchases do not require the same stringent safeguards as those of other local and state agencies,” Thompson said. “As a result, taxpayer money continues to be squandered through an opaque process that does not take advantage of the competitive marketplace. This is unacceptable.”

What did Thompson find?

• One out of every five – or 20 percent – of the Department’s contracts that ended in the last two fiscal years inevitably cost well over the estimated amount by 25 percent or more.
• That rate already continues to climb. So far, in the current fiscal year, 27% of the Department’s requirement contracts have swollen costs topping 125% – and there’s still three months left until the fiscal year ends.
• One contract, with the Xerox Corporation, was supposed to cost at most $1 million – but the Department spent close to $68 million – a 6,759 percent jump in costs. Another, with Ideal Restaurant Supply, jumped from $15,000 to more than $852,000 – a 5,530 percent jump.
• During those two fiscal years combined, the Department issued 372 requirement contracts, originally estimated to cost $325,236,416 but which inevitably exceeded those estimates by 25% or more. The final tab wound up at more than $1 billion.
• Additionally, many recipients of the contracts – 127 of them – got the lucrative work without any competition because the Department didn’t put the work out to bid. Those 127 contracts were supposed to cost $195 million at most. But the Department spent $525 million on them.

“The Department’s purchases exceed contract amounts by such a large margin that it raises fundamental questions about the integrity of the Department’s entire contracting process,” Thompson said. “These actions display a clear pattern of mismanagement when it comes to expenditures, and the Chancellor and the Mayor must fix this situation and rein in these costs.”

The Comptroller over the last seven years has repeatedly exposed fiscal incompetence and a lack of accountability and transparency in budgeting and contracting at the Department of Education. Key among his concerns has been a disturbing pattern of so-called no-bid contracts, which are executed without competition.

“The Department must create and follow an open and formal procurement practice and demonstrate that it will spend the public’s money in an accountable manner,” Thompson said. “I call on the Department to take immediate action to ensure that the scarce public dollars entrusted to it are used prudently. Doing so will benefit not just our schoolchildren and our school system, but our city as well.”

But union president Randi Weingarten, a supporter of the case and the groups that filed it, is taking a different point of view. In a statement she just released, she declares that the state budget “reaffirms Albany’s commitment” to the lawsuit. The Campaign for Fiscal Equity, she says, “was deferred but not denied.”

The state budget erases two years of increases in funding that would have grown to more than $5 billion by 2011, postponing them until the future. Only 37.5% of the funds promised over a four-year period have been doled out so far. The Campaign for Fiscal Equity’s executive director, Geri Palast, has repeatedly said that state lawmakers should give the city a “down payment” of funds for next year.

Here’s her full statement:

Given the severe economic conditions facing our state, this budget in many ways has been a story of survival. Protecting children’s educational services is and always has been our top priority. That is why we fought so hard for the federal stimulus funding and the progressive income tax, both of which helped the Governor and the State Legislature deliver a budget that protects schools, health care and the most vulnerable in the wake of a $ 16 billion deficit.

The kids in New York City could have suffered terribly, but thanks to the efforts of many, we have averted the most serious anticipated damage. We will see cuts to programs, but core services should be salvaged and layoffs should be averted.

The new budget also reaffirms Albany’s commitment to the Campaign for Fiscal Equity, which was deferred but not denied, and it rejects a Tier V, which would have been a step in the wrong direction for working families all across the state. In addition, it restores funding for Teacher Centers, which are integral to the training and retaining of quality classroom teachers, and adds much stronger class size accountability language.

We owe a debt of gratitude to Governor Paterson, Speaker Silver and Majority Leader Smith for standing tall for our teachers and public schools. They recognize, just as President Obama does, the importance of keeping people working and keeping the economy moving.

I also want to thank Mayor Bloomberg for his advocacy on behalf of public schools, as well as the State Legislature, the City Council and, most of all, the tens of thousands of New Yorkers who attended our rallies and helped fight for their neighborhood schools.

If this were a marathon, however, we still have the hardest part of the race ahead of us. The city is still facing a deficit and schools still face cutbacks. We must work with our allies in New York City, and hopefully the Mayor and the City Council will continue the momentum and protect against direct service cuts to kids.

Lowering class size by just a fraction of the degree sought by class-size reduction advocates would require a tremendous expansion of the Department of Education’s budget, Deputy Chancellor Christopher Cerf just testified at today’s Assembly hearing on mayoral control in the Bronx.

Recent DOE analysis concluded that a reduction in class of 10% — from an average of 25 to 22.5, for example — would cost $800 million a year in extra operating funds to pay for new teachers, Cerf said. Constructing the extra classrooms needed would be an additional tens of billions of dollars in capital funds, he said.

The city last year received $150 million from the state in funds earmarked to reduce average class sizes in a set of needy schools.

The company that won the contract.

Here’s a story from yesterday’s New York Post that escaped our attention: Yoav Gonen reports that the Department of Education handed a $1.6 million contract to a vendor that wasn’t the lowest bidder — and whose services include a $315/hour consultant fee.

The contract went to the management consulting company Accenture, which you might recognize as one of several million companies whose spokesman is Tiger Woods. Accenture is promising to save the city school system $21 million in the next year by lowering the cost of books, equipment like overhead projectors, and software. The trick, according to schools spokeswoman Marge Feinberg, is bulk-purchasing of a variety the DOE previously could not accomplish. So whereas right now schools get about a 2% discount on books of the sort you’d buy at Barnes & Noble (as opposed to textbooks), when Accenture is done the discount will shoot to 35%, Feinberg said.

In the past, a contract with a different management consulting company that promised to save the school system money drew criticism for inflating its savings projections. Estimates of the cost-savings from the contract, with the firm Alvarez & Marsal, dropped over time, though the updated numbers remained far above the fee the company charged, about $16 million.

This contract is also attracting heat. The Post story quotes both a losing vendor and Public Advocate Betsy Gotbaum criticizing the department. But of course, won’t know whether these savings really materialize until next year.

Mayor Bloomberg presenting a budget update in November.

In response to GothamSchools’ survey about how schools plan to handle the budget cuts, several principals are saying they can’t begin to speculate about what they’ll slash because they don’t know yet how much money they’ll be losing.

They won’t find out for a while. Their first hint will come next month, when the city presents to the City Council its preliminary budget for the fiscal year that begins on July 1.

Principals will really be able to start planning for next year in the “late spring,” DOE spokeswoman Ann Forte told me. The state’s fiscal year begins April 1, so by then schools will know how much they’re losing from the state and will also have a good idea of how much they’ll receive in city funds.

The process to arrive at the city’s preliminary budget is underway now. This week, the DOE, like other city agencies, is presenting a suggested budget for next year to the mayor’s office, a City Hall spokesman told me on Friday. The spokesman, Mark LaVorgna, said agencies were asked to draw up budgets incorporating a 7 percent cut in city funding. Some speculate that the final percentage could be even larger once the city factors in the effect of cuts from the state.

The public will get to see the broad outlines of the DOE’s budget proposal when the city plan goes to the City Council. The city’s budget proposal will show how the DOE has divided cuts between its central administration and individual schools. Details about how much each school will lose will come after that. Mayor Bloomberg has said that individual schools will “bear the brunt” of the upcoming cuts.

Last year, the city revealed its proposed budget at the very end of January, and a week later principals had money from their current budgets withdrawn from their accounts overnight. Because schools already experienced midyear budget adjustments in November, they are unlikely to lose any more funds during this school year, Forte said.

City Hall (via Flickr)

Data specialists, new small schools, and empty seats in gifted programs could all go the way of cash bonuses to top-scoring schools if the City Council gets the budget cuts it wants.

The Council is proposing $170 million in additional budget cuts, on top of the millions Mayor Bloomberg already suggested, in an attempt to preserve a $400 rebate to homeowners that the mayor says the city can’t afford.

Almost $80 million of the proposed cuts would come from the Department of Education, the largest amount from any single city agency. Nearly $40 million of that would be programs associated with the department’s flagship Children First initiative, such as the school-based “inquiry teams” that analyze data about individual students. Other cuts would come in the form of delays, such as opening fewer schools each year and tabling plans to buy new data systems to manage enrollment and hiring information. And the proposal would require teachers to do jury duty on their own time, during the summer, so that schools won’t have to pay for substitutes.

The Council’s proposal comes weeks after Mayor Bloomberg rolled out his plan for how to shave the city budget. No cuts will be official until both sides of City Hall sign off on a compromise plan. A final version is expected in January.

Education committee chair Robert Jackson said council members didn’t consider cuts that would affect the classroom. From the press release:

“We have difficult choices to make in reducing the Department of Education’s administrative budget while making sure dollars are not cut from our children’s classrooms,” said Education Committee Chair, Robert Jackson. “I want to thank my colleagues in the Council for their efforts to reduce spending without diverting vital resources from the classrooms.”

Here are all of the education cuts the council has suggested:

• Reduce budget for “Formative Assessments.”
• Slow pace of new school openings. By temporarily slowing the creation of new schools, trimming the office of Portfolio Development and transferring the existing resources of closing schools to new schools, DOE could achieve savings.
• Eliminate Data Specialist Allocation.
• Eliminate Children First Inquiry Team allocation to schools. Require principals to review student & teacher performance.
• Delay Special Projects. In FY09 DOE replaced private support for unspecified “Children First Intensive” project with City funds. Postpone project or find new private funding.
• Delay implementation of [Open Market Hiring System] scanning project
• DOE dedicated $6 million in FY09 for per diem arbitrators to clear backlog of administrative trials, but has not yet shown a corollary savings.
• Delay Office of Student Enrollment and Placement enrollment RFP. Use existing resources to improve student enrollment process.
• Reestimate Cost Increases. In FY09 DOE dedicated $50 million to covering special education “related services” cost increases and growth. Estimate is too large.
• Fill Gifted and Talented empty seats. In FY09 DOE budgeted $2 million, but allocated only $1.24 million to schools for empty seats. In FY10 DOE should improve seat assignment to avoid empty seats in G&T classrooms.
• Reduce Funding for Parents Coordinators. Support part-time or shared parent coordinators in smaller schools.
• Extended Day Busing. Eliminate bus routes serving the extended day by matching extended time schedules with busing needs.
• Require teachers to perform jury duty during summer months.

Download the full list of cuts proposed for all city agencies.