December 14, 2004

The New York State Educational Conference Board (ECB) today released its annual estimate of "status quo" education funding - the level of funding necessary next year to maintain current services and programs for New York state schools. ECB found that simply maintaining the programs currently available to New York's public school students will cost an additional $1.486 billion in state and local education funding next year based on conservative estimates of likely costs.

The ECB estimate does not include any remedies or additional funding in response to the Campaign for Fiscal Equity lawsuit. Special Masters appointed by the court in the CFE case have recommended the state increase funding to New York City schools by $5.6 billion a year, starting with $1.4 billion next year.

"Obviously, the first step simply is to do no harm," said ECB Chairman Edward L. McCormick. "But just maintaining present conditions only perpetuates an unconstitutional system. And the courts are going to force Albany's hand and require a rational solution to CFE.

"The problems the court found are not confined to New York City. Students in classrooms across the state have been severely short-changed by the state's convoluted and inequitable education funding formulas."

McCormick said Governor Pataki must make education funding a top priority in his Executive Budget proposal. He said state government cannot pass its responsibilities down to local governments. ECB estimates school property taxes would increase at least 3.9 percent on average if the state assumed half the $1.486 billion necessary to sustain current services for another year. If the state did not increase education funding at all, local taxes would rise by at least 7.7 percent on average.

"The primary goal is to ensure that every child in our state receives a sound, basic education," McCormick said. "We cannot short-change another generation of students. The state has to fix the problems identified in the CFE case and apply that fix to other needy districts, urban and rural. At the same time the inflationary costs all districts are facing must be addressed. It's a tall order, but the reason it got so tall is that state leaders failed to meet the court's mandate for reform on time."

ECB urges the State to do the following for the next school year:

• Implement the recommendations of the expert panel for an additional $1.4 billion for New York City;
• Reform education funding formulas so that other districts similarly short-changed by the state system will also receive significant investments; and
• Pay a fair share of the increased cost of maintaining present programs and services - $743 million - to avoid dramatic property tax increases.

"The Citizens Budget Commission called on the state to shoulder a larger share of the education burden," said McCormick. "Shifting the cost of education to local property taxes only widens the gap between students who reside in our neediest communities and those who live in the wealthiest."

The $1.486 billion ECB estimate is based on a national forecast of 3.6 percent growth in private sector salary, along with a 10 percent rise in fringe benefit costs - a conservative estimate according to McCormick, who noted that rapidly rising health insurance premiums and the increasing estimates of employer contributions to the Teachers Retirement System and Employees Retirement Systems could drive benefit costs even higher. Other costs are expected to rise by 2.6 percent, based on state Division of the Budget forecasted increases in the Consumer Price Index. This also is low given recent increases in energy costs.

ECB comprises the eight major statewide education organizations representing parents, teachers, school board members, superintendents, school business officials and other administrators.