November 14, 2008

Testimony: Impact of the Economic Crisis on the State Budget

Source: NYSUT Legislative Department


Good morning Chairman Farrell and honorable members of the Assembly Ways and Means Committee.

I am Steve Allinger, Director of Legislation 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 the Impact of the Economic Crisis on the State Budget.

The hearing today is very timely. As you know, yesterday the Governor released plans to cut education and health care spending in the current year by over $2 billion.

I am here to tell you that midyear cuts to public education would not only be painful, but extremely disruptive to our childrens' classrooms. 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 they must also focus on the revenue side. We agree with Mayor Bloomberg that it is only right to ask the richest New Yorkers to pay their fair share of the solution and that this makes greater sense than compromising services for the most vulnerable New Yorkers.

We understand that there is an economic crisis that requires real solutions and we are acting. NYSUT has already begun working with the state's congressional delegation and state leaders to secure additional federal aid. We have also proposed to the Executive a menu of practical solutions. For example, we would like the state to look more closely at using BOCES to share services, bulk purchasing of prescription drugs, closing loopholes to collect additional revenue and a more progressive income tax structure.

Additionally, the Governor's proposal to slash $2 billion in spending does not take into consideration the potential of a federal stimulus package that could funnel billions of dollars in needed federal aid to New York. Furthermore, the state budget still holds over $1 billion in tax stabilization and rainy day funds designed for situations exactly like the one we are currently facing. Lastly, the Governor is cutting $2 billion when there is only a $1.5 billion estimated gap. The plan is to slash $500 million more than what is actually needed. Let's not act hastily and run the risk of some disastrous consequences in our schools.

Mid-year Cuts to School Aid

As I've mentioned, cutting school districts in the current year will be extremely disruptive. Our schools will have to make the cuts over the next 6-7 months and will only have a half year to implement a full school year cut. This will result in cuts to programs designed to close the achievement gap such as universal pre-kindergarten, class size reduction, academic intervention services, and after school programs. Any program that is not mandated will likely be cut.

The Governor implied that school districts will be able to absorb these cuts using existing reserve funds and this just isn't the case. First, the school district fund balance information that is available is not up to date and is of little value in the short term. Second, the districts with balances have plans to use the balances to stabilize property taxes. Any balances that exist are there because the Governor and the Legislature changed the law to increase the school district's ability to raise fund balances from 2 percent to 4 percent. Balances in reserve funds are for specific purposes, liabilities and obligations that the district will incur in the future. Allowing districts to use these funds the make up for cuts from the State does not remove the liability and could well weaken the district's balance sheet. The state should not go after this local revenue and it is disingenuous for the Governor to suggest that local school districts do so.

The Executive proposes to cut school aid on a sliding scale from 3-10% based on certain wealth and local capacity factors. These cuts were intended to be progressive when 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. 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.

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. A serious interruption of the formula will set us back in our shared goal of closing the achievement gap.

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.

However, without the promised funding we will not be able to sustain our progress. In fact, new programs will either be targeted for elimination or local taxpayers will 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. NYSUT and our members are counting on you to stand strong and advocate for the sustainable funding necessary to continue closing the gap.

Higher Education

State General Fund support for SUNY and CUNY was reduced by almost $215 million in the 2008-09 state budget. These cuts to our four-year public higher education institutions are deeper than the cuts to any other state agency. These reductions follow years of inadequate state support. New York state appropriations per capita for Higher Education in 2006 were 22nd in the nation. NYSUT strongly urges the Legislature to hold SUNY and CUNY harmless from any further cutbacks in the 2009-10 state budget. We ask that the Legislature provide a revenue source to mitigate any potential reductions in state aid next year. The cuts suffered this year are already having a negative impact on quality and student access.

Faculty searches are being halted, class sizes are increasing and classes are being cancelled for next semester. Moreover, due to severe faculty shortages and funding shortfalls, tens of thousands of qualified high school students and community college transfer applicants are being denied admission to four-year public colleges and universities. Approximately 80% of SUNY and CUNY graduates remain in New York after graduation. The state, by its budgetary actions, is encouraging our youth to leave our state simply to have the opportunity for a college education. Once these students are gone, the vast majority of them do not return to New York. We all lose when this "brain drain" to other states occurs.

Moreover, it makes no sense to make mid-year cuts to community college base aid. These institutions are the gateway to achieving a college degree for thousands of people. This is especially true in times of economic crisis. SUNY and CUNY community colleges are now faced with record enrollments and an increasing number of applications to their campuses. The colleges are facing enormous difficulties in accommodating increased student needs with fewer faculty and resources. If these proposed cuts are enacted, the colleges will be forced to raise tuition yet again as they have done numerous times in recent years due to inadequate state support. The tuition at our community colleges are already the sixth most expensive in the nation, 62% higher than the national average.

NYSUT understands that all sectors of our government must share in the pain to deal with this economic crisis. Public higher education has more than paid its share not only this year, but over the last two decades during both good economic times and bad.

Cuts to Teacher Centers and the Mentor Teacher Intern Program

The Governor has also proposed a cut of $15 million to Teacher Centers in the current school year. This represents a 37.5 percent reduction. For next year, Teacher Centers are cut in half to $20 million. By any standard, this is a draconian cut.

There are currently over 100 Teacher Centers across New York state. These Centers are operated by teachers. They are a resource center for teachers to help them improve their skills, their knowledge, their awareness of the latest and successful pedagogical techniques. They conduct courses and programs that enable new teachers to satisfy the Regents requirement for 175 hours of professional development. Teacher Centers raise the quality of what is happening in our schools. This cut will damage efforts to improve instruction and raise test scores.

Here are a just a few of actions that Teacher Centers are telling us they will have to take if these cuts are enacted:

  • Cancellation of winter and spring programs
  • Elimination of positions
  • Will not be able help new teachers in meeting the Regents requirement for 175 hours of professional development

Since this large cut would come with the school year almost half over, many teacher centers would be forced to cancel most programs for the remainder of the year.

The Mentor Teacher Intern Program is cut by 50 percent this year and eliminated next year. 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. Researchers 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.


Mid-year cuts to education and health care 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. 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 and higher 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.


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