Do School Aid Cuts Hurt the Poor Mostly? Only if They Get More to StartNovember 16th, 2011
By Brian Backstrom
Last school year, spending for K-12 education in New York came in at more than $57 billion. Of that expenditure total, state funding covered just over 40 percent, the lowest percentage contribution since 1997-98, and down from its 20-year high of 48 percent in 2001-02.
Part of the recent decline in the state contribution share is that school aid itself has been cut in each of the last two years, and simultaneously federal “stimulus” funds for education helped boost total education expenditures.
But talk to almost anyone with a pulse here in New York, land of record-high local property taxes, and they would justifiably argue that the state should contribute a much higher percentage for education, which should in turn translate to less reliance on property taxes. Many other state governments finance more than half total cost for education.
It is critical to understand, however, that the 40 percent New York state government contribution rate is an overall average percentage, with actual rates varying to a wide degree among the state’s 696 school districts. For districts that have lower property wealth, which mostly are in upstate and rural areas, state aid finances half or more of their budgets. By contrast, many downstate suburban districts, which generally have much higher property wealth, have as little as five percent of their expenses financed by state aid.
The NY Ed Reform Blog recently compared one upstate and one downstate school district of similar size and found the upstate, poorer district got $13 million in state aid, which worked out to be $9,172 per pupil, compared to the wealthier downstate district which received less than $2 million, or only $1,275 per pupil. Such a glaring difference in state support would appear to offset to a great degree the income and wealth disparities – exactly the result state policy makers try to achieve with the aid formula.
A study released this week by the teacher union-backed Alliance for Quality Education complained that state aid cuts came in larger nominal dollar amounts from poorer districts (i.e., upstate and western New York primarily) than in downstate “wealthier” districts. According to AQE’s study Back to Inequality, the poor and poorest districts were cut this school year by $843 and $547 per pupil, respectively, while the “high wealth” districts lost only $269 per pupil.
The simple truth, however, is more complicated. Any school district that receives more state aid per pupil, and more state aid in nominal terms, and is more reliant on this source of funding, will mathematically receive a higher funding cut in nominal dollar terms as state aid declines. As AQE’s own numbers show, the same school districts with the higher nominal dollar reductions got higher per pupil aid hikes when school aid was increasing in 2007.
The Cuomo administration – the target of this AQE study and the teacher unions backing this effort – took great care when allocating school aid cuts to ensure that higher percentage reductions were demanded from wealthier school districts. Because poor districts get so much more state aid than wealthier ones, as they should, the nominal reduction when there is less aid available might appear to be larger, but wealthier districts clearly are getting a higher percentage cut and thus sharing the pain disproportionately, again as they should.
Even after two rounds of state aid cuts, the reality is that poor school districts still receive much higher state aid levels than wealthier districts on a per pupil basis. But that doesn’t suit AQE’s politically-motivated agenda, and so that fact isn’t acknowledged anywhere in its “study.”
Let’s go one step further. Even using the term “wealthy” to describe many downstate school districts can be labeled misleading, as only a few on Long Island or in the lower Hudson Valley have Hamptons-style mansions populated by the rich and famous. Instead, many “average wealth” and “high wealth” school districts are populated mostly by middle-class New Yorkers with two income-earners already paying property taxes among the highest in the entire nation. These same New Yorkers also pay high income taxes to the state, most of which then goes for state aid to poorer school districts.
No one likes school aid cuts, and poor districts with smaller property tax bases and heavily reliant on state school aid clearly face challenges. But higher school aid for them is unlikely to come from wealthier areas, whose residents also believe they get gyped by the state.
The quest for more education revenue demands biting the bullet on the expense side – something the teacher unions and AQE are loathed to do and are trying to avoid. As long as New York’s economy remains in the doldrums, focusing more on the expense side of education, including redirecting more toward actual student needs, is both unavoidable and necessary.
Brian Backstrom is President of the Foundation for Education Reform & Accountability and may be followed on Twitter at @nyedreform.