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Bloomberg discusses school funding during today's budget briefing

The education proposals that Mayor Bloomberg announced during his State of the City speech last week made no appearance at his budget briefing today.

Nor did the policy he had pushed last year during the budget process, an end to seniority-based layoff rules.

In fact, in his budget proposal for the fiscal year that begins in July, Bloomberg said little about schools except that the Department of Education is among the only city agencies not set to experience budget cuts. The city is planning to spend $13.6 billion on schools in 2012-2013, and layoffs are not on the table.

That’s good news for principals, who said last year (as they had in the past) that they could not fathom cutting anything more in their schools.

But the budget proposal counts on some revenue that is not at all assured — increased school aid from the state.

Gov. Andrew Cuomo, of course, has said the aid increase would go only to districts that have new teacher evaluations in place. So far, the city and teachers union have been unable to agree on new evaluations and do not appear on the brink of doing so.

But Bloomberg said today he was not worried about Cuomo’s threat, arguing that the aid increases were slated well before Cuomo’s recent ultimatum. (more…)

The city’s teacher pension system is being taxed by more than just unrealistic expectations. It has also handed out hundreds of thousands of dollars to a retiree who died in 2000.

That’s the conclusion of a report issued today by the Special Commissioner of Investigation, which is charged with looking into allegations of fraud and malfeasance in the school system.

Last year, the state’s Teachers Retirement System tipped off city investigators that checks issued to Maria Sicardo, a Bronx teacher who retired in 1993, were being cashed by someone else. Investigators discovered that not only had Victor Rosa begun cashing Sicardo’s checks after her death in April 2000 but that he had repeatedly submitted paperwork to the state and teachers union certifying that she was still alive. Employees at a check-cashing company in the Bronx told investigators that after they challenged Rosa, he took the checks elsewhere.

In total, Rosa pocketed about $241,000 over a decade from the state and from the UFT’s Welfare Fund, the union’s health fund for current and retired teachers. SCI is recommending that the pension system move to recoup the funds and has referred the case to the U.S. Attorney’s office.

The full report is below. (more…)

https://gothamschools.org/wp-admin/post.php?action=edit&post=35165

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. (more…)

A Queens charter school that pays for pension costs directly out of its budget is cutting programs to afford pensions.

Stacey Gauthier at the Renaissance Charter School is worrying a lot these days — about money. This year she’s had to increase class sizes, cut the summer school program, and forgo hiring experienced teachers when an older teacher retires. Yet she still hasn’t cut enough to be able to afford the school’s rising pension costs, which have grown from $12,000 per teacher in 2004 to $21,000 per teacher this year.

Pension costs for city teachers have been rising steadily over the past decade, but for the most part the expenses have been hidden from individual schools, which rely on the city to cover all pension costs. Yet for a small number of charters schools like Renaissance that participate in the Teacher Retirement System (TRS) out of their own budgets, the ballooning price of a comfortable retirement has been acutely felt.

“We have another year to live,” Gauthier said. “We’re dipping into our savings now, which is okay, but if things don’t rebound, we won’t be financially viable.” (more…)

In Albany this week, UFT President Michael Mulgrew floated a plan to save the city money by letting teachers retire earlier. But a new report on the health of the city’s teachers pension fund suggests that Mulgrew’s proposal would only compound the fund’s potentially crippling budget crunch.

The fund’s annual report, released last week, shows that it lost 29 percent of its value, more than $9 billion, last school year, even as the portion the city is required to pay reached unprecedented heights.

The mix of rising costs and declining value raises serious questions about how the city will be able to afford to pay the pensions it has promised in the future without major concessions by the teachers union.

The fund, called the Teachers Retirement System (TRS), is a collection of investments paid for with a combination of taxpayer dollars and teacher salaries. Every year a chunk of it is used to pay retired teachers and principals the pensions state law says they are owed.

Last year’s financial crisis sunk the fund to its lowest level in more than 15 years, effectively erasing all of the gains made in the past decade’s bull market, according to a database of TRS’s financial reports. Over that time span, the fund’s value, adjusted for inflation, has shrunk by more than $11 billion.

This leaves a $15 billion gap between what the fund expects to pay out in the next 30 or so years and what it will have saved by that time, according to the TRS’s preferred accounting method. Another way of calculating these “unfunded liabilities” used in the private sector puts the number even higher, at $27 billion.

“It’s not a crisis. It’s a long-run big problem: The pension system is far more costly than it ought to be,” said Charles Brecher of the Citizens Budget Commission, an independent group that advocates for changes in city and state finances. (more…)