If you read my prior post you know that the school finance situation was grossly inequitable in FY 1996, as the Campaign for Fiscal Equity lawsuit got underway. The personal background of many of New York City’s children would have made education challenging enough, but the under-funding was at least a major contributing cause to the city’s unconstitutionally bad schools. So were the contract provisions the teachers’ union had obtained, allowing a lower level of effort by the teachers in exchange for lower pay (which obviously did nothing for teachers who made a real effort despite that pay). If you look at the change from FY 1996 to FY 2006, however, one thing the CFE lawsuit achieved was an increase in education spending. The New York City schools already had enough money three years ago as a result, it seems to me, and have since received more.

But education spending increased in places where it was already high, not just in places where it was low. New York City residents, which had been cheated out of a fair share of school aid for decades, ended up paying local taxes for much of the increase in spending inside the city and state taxes for much of the increase outside the city. And while the gap between the city’s education resources and that of other parts of the state did decline, it remained large. The Campaign for Fiscal Equity achieved higher spending but not fiscal equity, so it is not unreasonable to expect that now that its lawsuit is over New York City’s schools will fare even worse in the next fiscal crisis, and some of the gains will be lost.

If you read my last post and downloaded the data, you might be wondering why the Campaign for Fiscal Equity sued New York State on school spending, and why the courts ever ruled in its favor. To find the answer one cannot look at New York’s school spending in FY 2005-2006. One has to look back a decade earlier to the FY 1995 to FY 1996 school year. In June 2005, the New York State Court of Appeals ruled that the Campaign for Fiscal Equity lawsuit was legitimate, and could go forward. The context was a state and city budget crisis that came to a head several years after a recession had begun, when costs could no longer be deferred to the future and revenues no longer stolen from it, at least to the same extent. The resulting sacrifice would be targeted at those who mattered least. The following post will show what the city’s school finance situation was that year, the year the Campaign for Fiscal Equity lawsuit was launched; the next will review what the CFE got for its effort, and how much it cost.

The U.S. Census Bureau has released its education finance data for the 2005-2006 school year, with information available on revenues by source and expenditures by type for every school district in the United States. I’ve summed this information to create totals for the United States, New Jersey, New York State, the Downstate Suburbs, Upstate New York, and New York City, divided the totals by the number of students to get per student figures, adjusted the per student figures for the cost of living for the higher cost Downstate and New Jersey areas, and adjusted 2002 data for inflation for a comparison with 2006. The data is in two attached spreadsheet, one a summary by broad areas with a comparison with FY 2002, and the other with data for every school district in New York State in 2006. I suggest that New York State residents outside New York City download these spreadsheets, look them over, and think about them before voting on their school budgets.

When I first started compiling public finance data many years ago, what stood out was how low New York City’s elementary and secondary school spending was, as a share of the income of its residents, despite very high local taxes. As will be described briefly below and in more detail in the next post, however, New York City was already spending plenty of money in FY 2006 based on the national average, even before the “historic” (in ex-Governor Spitzer’s words) increases in state school aid over the past two years. High by national standards, the city’s spending remains far lower than in other parts of the state. That, however, is not because the city’s school spending is low, but because spending elsewhere in New York State -- already high a decade ago -- is now unreasonably high. So high, in fact, that one wonders what share of the money is actually going to education. Unreasonably high spending elsewhere in the state, rather than low spending in New York City, is now the biggest education finance problem for New York.