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November 15, 2002

Report: To close budget gap, Albany must reject persistent myths about education spending

To successfully close a state budget gap estimated at $5 billion or more, state lawmakers must reject the "perennial myth" that Albany is inadequately funding public schools, a new analysis by The Public Policy Institute of New York State argues.

Lawmakers can expect various spending interests to reprise familiar cries of inadequate funding when the budget debate begins in earnest in January, said the report, which is available at www.ppinys.org/budget/budget_watch_03_issue3_schoolaid.pdf.

"Whether times are good or bad, one of the perennial myths in Albany is that we're starving education," The Institute said in the latest report in its Budget Watch '03 series. "The truth, of course, is that New York taxpayers support one of the most expensive public-school systems in the world."

The Institute, the research affiliate of The Business Council, launched Budget Watch '03 earlier this month to focus attention on spending issues that are at the root of the state's looming fiscal challenge. If the state had held overall state-funds spending to the rate of inflation over the last five years, the state could have saved $7.9 billion.

Reports in the series will be issued once or twice a week as the state budget debate unfolds. They can all be accessed from www.ppinys.org/bwatch03.htm.

"In just the last five years, we've added $3.7 billion to state aid for schools. That's a 34 percent increase, more than twice the inflation rate," the report said. School spending in New York is $9,192 per pupil, 43 percent above the national average and among the nation's highest levels of spending.

This aid is distributed disproportionately to relatively well off-districts, which got an average 6.5 percent state aid increase this year. In contrast, the least wealthy school districts received an average increase of 2.8 percent.

Moreover, it's not clear that "those additional billions are rewarding or driving student performance." The report added: "Student performance in New York, as measured by standardized tests and graduation rates, lags behind that in many other states."

To make school aid more effective, the report said, lawmakers can consider changes to current laws that drive up costs for schools and local governments. For example, the Wicks Law, which inflates construction project costs by requiring multiple contractors on even small projects, and New York's limitless liability on contractors "drive taxpayers' school construction costs hundreds of millions of dollars a year higher than they need to be."