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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…)

Hundreds of principals who objected to their initial budget funding last month will learn today if their appeals were successful.

An unusually high number of principals filed official appeals of their budgets this year, some requesting hundreds of thousands of dollars of additional funding. They said the third consecutive year of budget cuts would have forced them to cut vital staff members, they explained in their appeals.

It’s not clear how many of the 253 principals will have funding restored, or even where all of the money will come from. Last year, the Department of Education spent $23 million from a centrally-funded emergency pool to restore money to about two-thirds of the 166 schools that filed appeals.

Principals are getting emails with the results of their appeals today, according to Barbara Morgan, a DOE spokeswoman. But at least one principal said he’s already been told his appeal was successful.

Joe Nobile, a principal whose budget plight we wrote about last month, said initial funding allocated for his school, P.S. 304, “was not enough to run the school effectively.” He would have had to replace seven staff members.

But thanks to his appeal, Nobile said he will be able to keep most of those staff members — a teacher, three school aides, and one paraprofessionals  — in the school. He’s still losing two special education teachers, he said.

Principals are famously told to “be creative” during school budget season. This year is no different, but with cuts to city, state, and federal funding all taking their toll, some school leaders are saying creativity isn’t enough.

Some of them are pushing back, filing appeals with the Department of Education to restore hundreds of thousands of dollars back into to their schools.

Joseph Nobile, a veteran principal at P.S. 304 Early Childhood School in the Bronx, said he and his budget liaison tweaked projections, shuffled funds, and excessed staff to stretch his $4.7 million as far as it could go.

“After all of the moving around, we were still down $350,000,” Nobile said. So for the first time in his 12 years on the job, Nobile said he had no choice but to file an appeal.

Nobile said the money he requested would go toward retaining the school’s lone curriculum coach, as well as four special education specialists. The additional personnel is especially important at P.S. 304 because it is part of a citywide pilot to move as many special education students as possible into mainstream classes.

Schools are feeling the pinch more than ever because of third consecutive year of budget cuts. Adding to that, the city made it tougher for some schools with large percentages of poor students to qualify for federal aid. (more…)

City principals might be well advised to go on spending sprees — or else pay a price for planning ahead.

For the second time in two years, the Department of Education is trying to counter budget cuts by limiting the amount of money principals can roll over from this year’s budget into next.

Typically, a program known as the “Deferred Budget Planning Initiative” allows principals to stash unused money in a rainy-day fund that they can raid in the case of unexpected expenses or midyear cuts. But this year, principals are being asked to hand over half of their unused funds to the department’s central administration.

“This year, considering the current budget climate, the Deferred Program Planning Initiative is not a prudent option as it was originally designed,” said Barbara Morgan, a DOE spokeswoman. (more…)

Reports on the death of the charter school funding freeze may be exaggerated.

The reports have to do with a surprise side effect of Governor David Paterson’s decision to veto an education spending bill this week. Among the provisions that the veto eliminated was language that would have kept charter school funding at 2008 levels.

The change would require the city to give charter schools an additional $42 million next year. But the additional funds are not necessarily guaranteed.

“This is not a celebratory moment,” said Peter Murphy, policy director of the New York State Charter School Association. “This fight goes on.”

The ultimate fate of the charter school funding increase will depend on whether the governor and legislature reinstate the freeze during final rounds of budget negotiations. (more…)

Charter school supporters say they are on the brink of a victory in their battle to restore about $1,000 per student in funds that lawmakers tugged out of next year’s state budget. They expect that Malcolm Smith, the State Senate majority leader, will restore the funds to charter schools through a last-minute appropriation of Senate funds.

“We’re hoping that Senator Smith will be able to, through his good offices, get our funding restored,” said James Merriman, the executive director of the New York City Center for Charter School Excellence.

The message comes after charter schools spent the last two days badgering Smith, whom they had counted as a strong ally. One Queens school that says it is slated to face a $600,000 cut held a rally, while others sent in form letters to Smith declaring, “We thought you were a supporter of charter schools. This budget betrays that support.” Charter lobbyists also rushed out e-mails urging “parents, trustees, and supporters” to call Governor Paterson and Smith asking for help.

But the charter lobbyists reversed their position on Tuesday afternoon, sending out an e-mail declaring that the efforts had paid off. The full text of their letter is below the jump.

A spokeswoman for Smith did not return a phone call immediately today.

Merriman said he can’t 100 percent guarantee that Smith will fill the funding gaps. “He hasn’t told me, but we’re certainly hoping that he will do everything he can,” he said. (more…)