January 28, 2009

Testimony on the Proposed Budget for K-12 Education

Source: NYSUT Legislative Department

Testimony of Alan B. Lubin, Executive Vice President, New York State United Teachers, to the Joint Legislative Budget Committee on Elementary & Secondary Education

January 28, 2009

lubinI am Alan Lubin, Executive Vice President for New York State United Teachers (NYSUT).

NYSUT is a statewide union representing more than 600,000 members. Our members are pre-k to 12th grade teachers, school related professionals, higher education faculty, and other professionals in education and health care.

I thank you for the opportunity to address you today regarding budget issues in k-12 education and our 2009-10 budget priorities.

This is a year unlike any other year. New York state residents have been hit particularly hard by the nation's fiscal crisis. We fully understand the gravity of the situation and respect the governor's efforts to put together a budget in these very difficult economic times. However, this spending proposal raises deep concerns about the adverse impact it would have on public schools. It relies too heavily on deep cuts to schools and other vital services and not enough on revenues.

Under the Executive's proposal, aid to schools would be cut by $2.5 billion. The proposed $20.7 billion education package would represent a 12 percent reduction from the amount promised under the state's formula to address inequities highlighted in the CFE court decision. These cuts would result in thousands of layoffs of teachers, aids, and support staff. It would cause massive retrenchment of instructional and support programs to school children while ballooning class sizes and dismantling tutoring, counseling, after school and summer school programs that students need to meet grade level and graduation standards. The proposed state education budget would ask students to shoulder the burdens of the state's economic crisis. The economic crisis is severe, but we cannot - and do not - accept this devastating $2.5 billion school aid cut as inevitable.

NYSUT is calling on you, our legislative leaders, to pursue constructive solutions to the budget crisis that would spare students and needy New Yorkers from harm. We are committed to constructive solutions, but our solutions must also focus on the revenue side of the equation. This makes far greater sense than compromising services to the most vulnerable New Yorkers.

There are two specific sources of revenue that I'd like to focus on. The first is the federal stimulus package that will pass and be signed by our new President imminently – perhaps within the next three weeks. This proposal promises to bring in $17 BILLION in non-capital dollars to New York State over the next two years. Some of this funding will go directly to school districts as Title I and IDEA but additional funding will also be available as general budget relief. This state fiscal relief is intended to save jobs, vital services and jumpstart our economy. This funding should be used to restore the proposed cuts in state aid to our schools, prevent layoffs and maintain our commitment to our children. Districts like Yonkers have already predicted the layoff of at least 600 teachers and aides if the Governor's cuts go through. Rochester has announced 500 potential layoffs. Orange County school districts are predicting over 500 layoffs. Schenectady is planning to reduce staff by 100 if the cuts are not restored. For Schenectady, a contract for excellence district, these cuts would roll back much of the progress the district has just begun to make. The district has invested wisely in efforts to reduce class size and in reading and special education coaches. These programs would likely be rolled-back or eliminated if the proposed cuts are enacted.

In addition to this new federal revenue, we believe that any gap-closing solution must also include asking the wealthiest New Yorkers to pay their fair share by increasing the state's personal income tax on high-income taxpayers. Over the last 30 years, New York has reduced income tax rates on the wealthiest New Yorkers by more than 50 percent. High income tax brackets have been eliminated so that now – working class families and the very rich are paying the very same tax rate. If your household income is $45,000 per year or $4,000,000 per year – you pay the same marginal tax rate. This just isn't fair. The economists have spoken. Increasing taxes on the wealthy is a far better option than cutting spending.

Cuts to School Aid – Maintaining Our Commitment to Our Children

In the 2007-08 school year, the Board of Regents was successful in promoting a new school aid formula, Foundation Aid, to the Governor and Legislature. One of the key elements of this new formula was that school districts would be provided with stable and predictable state aid increases over a phase-in period. The predictable state aid increases allow districts to implement long-term plans that result in sustainable academic growth for students and achievement is improving. Test scores in grades 3-8 math and English have all improved. More teachers than ever before are highly qualified under NCLB. The percentage of New York students enrolling in college is steadily rising. A serious interruption of the formula will set us back in our shared goal of closing the achievement gap. The foundation formula must be maintained, the phase-in should continue, and districts should be guaranteed the same minimum increase that is promised in current law. The proposed "deficit reduction assessment" of $1.1 billion should be rejected. The DRA would mean cuts across the board to most aid categories including BOCES and High Tax Aid. While we do not endorse the Regents 2009-10 proposal in its entirety, we do support their proposal conceptually and we were pleased with their commitment to continuing the phase in of the foundation formula and maintaining the universal pre-k program. We must not walk away from the progress that we have already begun to make.

The increased resources have begun to produce dividends in increased student performance. NYSUT members are on the front lines, working to help students meet standards and reduce the drop-out rate. Districts, the State Education Department, the Governor, and the State Legislature must ensure that our schools have the tools necessary for success.

Although the Executive proposes to cut school aid on a sliding scale from 3-13% based on certain wealth and local capacity factors. In fact – these cuts reduce aid to the poorest districts THE MOST. This is because needy districts are the most dependent on state aid to run their schools. Under the Governor's plan the poorest districts will see the greatest reduction in revenue as a percent of their total budget. Low wealth districts often have the leanest budgets with little cushion to absorb drastic cuts in aid.

The Governor's budget also proposes to require school districts to assume 15 percent of the cost of Preschool Special Education. The state share would be reduced by 12.5 percent and the county share would be reduced by 2.5 percent. This cost shift would have an immediate impact on school districts and is estimated to increase costs by $173 million statewide. The cost shift will have the same impact as a cut and it will force the elimination of personnel or programs. Local taxpayers may also be asked to foot the bill, placing significant pressure on local property taxpayers at a time when state leaders are attempting to lessen the burden.

Reject the Proposed Cuts to Teacher Centers and the Teacher Mentor Intern Program

The Governor has also proposed to eliminate funding for Teacher Centers in the 2009-10 school year. There are currently over 130 Teacher Centers across New York state. These Centers are operated by teachers and over 200,000 teachers were served by their Teacher Center last year. They allow teachers to improve their skills and keep up with the latest and most successful pedagogical techniques. They conduct courses and programs that enable new teachers to satisfy the Regents requirement for 175 hours of professional development. In addition to the funding received by the state, Teacher Centers also leverage additional in-kind support from outside sources. This amounted to $36 million in grants, teacher contributions, business and industry contributions and others to offer their full complement of services. Teacher Centers raise the quality of what is happening in our schools. This cut will damage efforts to improve instruction and raise test scores.

The Teacher Mentor Intern Program is also proposed to be eliminated for 2009-10. Currently, this $10 million dollar grant program helps new teachers receive mentoring as they begin their teaching career. The program helps to retain new teachers and prevent turnover. Researches estimate that it costs 35% of a teacher's salary to replace that teacher if they leave. Furthermore, the Regents require that new teachers receive this mentoring help. With the cut this year and the program elimination next year, the state would essentially be placing an unfunded mandate on school districts. School districts that are already facing reductions in other areas will be forced to let new teachers "sink or swim" which is not good for the new teacher, the students or our schools.

Charter Schools

Another issue that we will continue to bring before you is charter schools. As we have discussed with you in the past, NYSUT continues to advocate for real reform of the Charter School Law. We continue to witness the debilitating effects of concentrating too many charter schools in many local school districts, namely Albany and Buffalo. This is why we are once again coming to you today to ask for two things:

First, we would like you to consider a moratorium on the approval of any new or expanded charter schools in Albany or Buffalo. Educational research indicates that the transfer of 10% of a school district's student body through either vouchers or charters will create debilitating circumstances for a school district. We have already reached this point in Albany and Buffalo.

Second, amend the charter school tuition payment formula. This formula was never adjusted to neutralize the impact of transferring categorical grants to the Foundation Formula almost two years ago. Grant money had previously been excluded from the calculation of charter school payments. As a result, a district's approved operating expense (AOE) is artificially inflated, resulting in inflated charter school payments. Buffalo has estimated that this oversight will boost its charter payment by an additional $3.4 million, a windfall for the 16 charter schools in the district. Additionally, despite the fact that sending districts are facing significant cuts in state aid as a result of the state's fiscal crisis - charter schools are held harmless and will actually see an increase in the payment made to them by the local districts. Charter school tuition payments should be adjusted downward by the same percentage that a public school district's state aid is reduced should a reduction become enacted.

We cannot continue to force districts to absorb the lion's share of the fiscal impact of charter schools in their community at the expense of most of the state's students. I urge you consider these proposals and I look forward to working with you to ensure that the Charter School Law is reformed to give real relief to affected school districts.

Cost Efficiencies

NYSUT recognizes the importance of spending education dollars wisely by reducing non-instructional and administrative costs through greater economies of scale, efficiencies and investment in energy conservation and green buildings. BOCES should be given direction and authority to pursue regionalization of procurement, transportation, payroll and other back-office and administrative services.

NYSUT is just as concerned about increases in health insurance costs as the employers. We have supported the development of a coordinated bulk drug purchasing program for all state agencies and local governments. The state should also explore self-funding prescription drugs and eliminate the "risk charge" to realize savings while protecting the state mandated coverage.

NYSUT applauds President Obama and Congressional leaders for championing investments in modern green school buildings. NYSUT believes that the state should require all new school construction to adopt the New York Collaborative for High Performance in Schools (CHIPS) standard developed jointly by SED and NYSERDA. For existing buildings, the state should use the proceeds of the Regional Green House Gas Initiative (REGI) carbon auction and system benefits charges to finance the up-front costs of energy efficiency and green building retrofits that will reduce energy usage, improve indoor health and comfort, cut costs over the long term and reduce carbon emissions.

Other conservation measures the state should undertake includes: implement net-metering for school facilities where onsite devices could produce enough energy to give back to the grid and offset energy bills; provide, through NYPA and NYSERDA training for school district energy managers and building personnel; and, provide seamless one stop technical assistance from audits to installation and financing.

Changes to Public Retirement Plan Benefits – Tier V

While we recognize that the State faces difficult challenges, public employers have the moral and ethical responsibility, as do private employers, to provide their employees with fair, guaranteed retirement benefits that insure that each member can live out their retirement years in dignity and security.

Unfortunately, New York's public retirement plans and the members and beneficiaries that they serve have been vilified for fulfilling their end of the bargain. So, I'd like to discuss some of the facts regarding our public pension plans and some of the shortcomings of the Governor's proposal to diminish the benefits available to future employees.

First, New York's public pension funds work for the benefit of our communities and our local businesses.

Almost 80% of these retired public employees stay in New York, shop at local businesses and pay their property and school taxes. Since 1998, the New York State and Local Employees' Retirement System (ERS) and the New York State Teachers' Retirement System (STRS) have paid over $114 billion in benefit payments to retired public employees. Of the over $114 billion that has been paid out to retirees over that 10 year period, public employers and employees have only contributed just over $20 billion or approximately 17.5%. This is clearly a good return on our investment.

Second, New York State's defined benefit plans maintain long-term investment horizons and provide value for taxpayers and public employers.

While the Employer Contribution Rates for all public retirement plans have climbed over the short term, they have begun to stabilize and even decrease. The Tier V plan rate is still at or below what public employers are currently paying or have been paying on average over the past 10 years.

Third, the Governor's proposal will harm working families and hurt vital public services in the long-term.

If enacted, this new retirement plan will require greater contributions from certain middle class families over a longer period of time in exchange for diminished retirement eligibility and inferior retirement benefits. These changes will not save taxpayers a single dime over the near term and will likely only provide marginal savings over the longer term.

New York state has far too many educators that leave service within the first five years of employment. If these changes are enacted, we will have fewer people going into teaching and those that do will be more inclined to leave teaching earlier. If this plan is enacted, it will severely hamper the ability of public schools, colleges and universities to attract and retain quality educators and these changes will directly impair the ability of these public institutions to deliver quality educational services to our students and our communities in the future.

At a time when the federal and state governments are trying to stimulate economic activity and shore up middle income families, the last thing the state should do is institute a "pension tax" on public employees as it will decrease the disposable income available to working families whose budgets are already stretched.

Conclusion

Cuts to education are the wrong choice to help us out of this economic crisis. Now is the time to look at the revenue side of the equation. We implore you to use the federal fiscal stimulus for the purpose it was intended – to protect vital public services and save jobs, as well as invest in the public infrastructure to spur an economic recovery. We implore you to restore a progressive income tax structure to avoid devastating cuts which will affect the quality of life for middle and low income New Yorkers.

This is not the time to walk away from our commitments to the state's schoolchildren and our most vulnerable populations. It is through investment in education that New York state will strengthen its economic global competitiveness as well as enrich the cultural and economic life of all communities in the state. We are confident that your leadership will guide us through this difficult time in the most thoughtful way possible.