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November 29, 2004

Report suggests more accountability, higher statewide taxes for New York City schools

Governor Pataki and the Legislature should force New York City schools to use existing dollars more efficiently, but might also need to raise taxes statewide to pay for court-ordered improvements in education, a New York City-based think tank says in a new report.

A new statewide system of accountability, based on proposals made by the Zarb Commission, should also be part of the state's efforts to improve failing schools, according to the Citizens Budget Commission (CBC).

"Experience in other states demonstrates that money alone will not solve the problem" of inadequate educational opportunity, the commission said. It noted that New Hampshire, Vermont and Texas have increased per-pupil spending in response to court orders, "but the returns on these investments have not been clear or pronounced."

The commission issued its report the day before court-appointed special masters are expected to submit a proposal to Supreme Court Justice Leland DeGrasse in Manhattan.

The Court of Appeals, New York State's highest court, ruled in 2003 that the state is not ensuring that New York City school students have the opportunity for a sound, basic education as guaranteed by the state Constitution. It ordered Justice DeGrasse to rule on how that opportunity could be provided.

The Court of Appeals left open the question of whether New York State, or the city, is responsible for providing any additional funding. CBC's report argued that the state should bear that responsibility, and should pay a larger share of existing school spending as well.

More efficient use of current public-school resources could free up an estimated $1.2 billion a year, the commission said. It pointed to reallocation of state aid from wealthier to poorer school districts, and "reasonable reduction" of time that teachers are allowed to spend on sabbaticals, classroom preparation and other non-instructional purposes.

Additional casinos in New York State could generate another $2 billion, CBC said.

If the courts determine more revenue is needed, state leaders should consider collecting sales tax on remote and Internet sales, extending sales tax to various services, raising business taxes, and raising the state income-tax rate, the commission said.

However, it noted,"New York already has the highest combined local and state tax burden in the nation." And the report acknowledged that some of the suggested tax increases "would be bad news for the competitiveness of New York's tax structure."

To promote stronger accountability, CBC urged adoption of proposals made by Governor Pataki's Commission on Education Reform. Known as the Zarb Commission after its chairman, Frank G. Zarb, former chairman of NASDAQ, the group included David Shaffer, president of The Business Council's Public Policy Institute.

Under the Zarb proposal, any district that had a single failing school would have to develop a three-year improvement plan for each such school, identifying what isn't working, detailing what will be done with new resources, and showing that its proposed solutions are based on programs that have worked elsewhere. If the school failed to improve after three years, it could be closed and reopened with new staff, or replaced by a charter school; if it failed to improve after another three years, the state could take it over directly. In other districts, schools would submit an annual improvement plan to the state, which would monitor results.

CBC's report and accompanying papers on taxes, educational efficiency and accountability, are available at www.cbcny.org.