GothamSchools — daily independent reporting on NYC public schools

The city’s budget watchdog predicted less money making its way to classrooms next year, even as it said the city’s overall economic outlook could be rosier than what Mayor Bloomberg has previously suggested.

The Independent Budget Office yesterday said that rising costs for contracts, employee benefits, and charter school payments appear poised to cut into the funds that the Department of Education is free to allocate to schools. The IBO analyzed this year’s budget and Mayor Bloomberg’s November financial plan and determined that spending for classroom instruction and school administration could drop by $300 million in 2013, a 3.3 percent decrease.

That’s because funds would likely have to be redirected to other areas of the DOE where costs are soaring, according to the report: pre-kindergarten special education contracts with private schools are set to increase by 10 percent, to $100 million; fringe benefits for school employees are expected to increase 2.5 percent, to $68 million; and payments to charter schools, which are enrolling more students each year, will go up 5.6 percent to $46 million.

City officials disputed the IBO’s projections of next year’s spending as premature.

“It’s impossible to say what we’re spending next year because we haven’t put out a budget, for schools or any other agency yet,” said City Hall spokesman Marc LaVorgna. A preliminary budget for the 2013 fiscal year is expected in January or February. (more…)

It’s not the millionaire’s tax that some parents have pushed for, but it’s something.

Gov. Andrew Cuomo announced today that he would overhaul the state’s tax code to reduce the tax rate on middle-income earners and increase taxes on the highest earners. Cuomo estimates that the changes will add $2 billion a year to the state’s coffers — funds that can go to schools and other public services.

UFT President Michael Mulgrew was among the chorus of people who quickly signaled their support for the proposal. He called the plan “a wide-ranging solution to the state’s budget problems” and said it would “help ensure that children in our public schools will begin to see restorations from the devastating education cuts of recent years.”

But a separate tax on high earners known as the millionaire’s tax, which Cuomo has vowed not to renew when it expires at the end of the month, has generated significantly more, about $4 billion a year. That means the state is still facing a funding shortfall of as much as $1.5 billion, and schools are likely to feel continued budget pressure. (more…)

Annual state spending on school aid will be down 6.1 percent this year, according to new spending projections from Governor Andrew Cuomo’s budget office.

The new projections show the state’s budget gap growing from $2 billion to up to $3.5 billion. The reductions come after three straight years of budget cuts that have left schools struggling.

Last week parent activists took their message to Cuomo’s office, urging him not to repeal the so-called “millionaire’s-tax” on high-earning residents and the decry the effects of the current state budget on class size in local schools.

Last year, New York City lost $812 million in state education funding. According to the revised plan, the state will spend about $19.6 billion on school aid this year—a reduction of nearly $1.3 billion from the 2011 budget.

Earlier this fall educators and families in New York City and elsewhere rallied against the $1.3 billion already slashed from the state’s education funds, many of them lamenting that beloved after school programs were the first expenses to go at their local schools.