Pallotta
Testimony of Andrew Pallotta, Executive Vice President New York State United Teachers to the Senate Finance Committee and Assembly Ways and Means Committee Chairman DeFrancisco and Chairman Farrell on the Education Budget for Elementary and Secondary Education
February 15, 2011
My name is Andy Pallotta, Executive Vice President of NYSUT (New York State United Teachers). 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'd like to thank the chairs of the Joint Fiscal Committees and the Chairs of the Assembly and Senate Education Committees for the opportunity to address you today regarding the Governor's proposed budget for education.
A Perfect Storm
Our schools are facing a perfect storm of additional state budget cuts, a drop off in federal revenue, new cost shifts to school district being proposed, and the threat of an ill-conceived tax cap. The Executive Budget proposal alone would devastate our schools by imposing massive cuts on public education - the worst in a generation. Couple that will several hundred millions of dollars in cost shifts and add in artificial limits to local districts' ability to raise revenue locally and you have a recipe for financial disaster. If these policies and cuts are enacted as proposed, we will hollow out the quality of public education for years to come.
NYSUT members are doing everything they can to provide the services students need - finding cost-savings and economies of scale and dealing with the impact of layoffs and position losses. NYSUT and our locals have made it clear we are willing to work locally and at the state level to preserve essential services, but we can't cut our way to educational excellence.
As these deep cuts are proposed for education, the wealthiest three percent of New Yorkers would enjoy a multi-billion dollar tax cut. There is an alternative to this recipe for disaster: By closing corporate loopholes and extending the temporary income tax surcharge on the wealthiest New Yorkers," a plan supported by more than two-thirds of New Yorkers, these devastating cuts could be mitigated.
Under the Executive Budget proposal schools would be cut 7.3 percent. The proposed $1.5 billion cut is the largest total dollar state aid cut ever proposed in the history of New York state and an amount so large it would send our schools into reverse gear. This reflects the lowest level of state support to K-12 education since the 2006-07 school year. The state's share of school funding would fall to 39%, the lowest level since 1993-94. Take a moment to take this in. Funding levels would fall to pre-CFE levels. If these cuts are enacted it will be as if the historic lawsuit NEVER HAPPENED. The reason that CFE is reversed is that the proposed cumulative cut of $2.8 billion through the Gap elimination adjustment wipes out most of the foundation formula increases enacted in 2007. Foundation aid was designed to implement a fair funding formula based on student need and local ability to pay, as part of the CFE settlement. The rollback of the foundation formula hurts moderate and low wealth districts the most since their budgets rely on state aid the most and they lack the local real property and income wealth to make up for the loss. The Governor's own state aid runs demonstrate this.
These cuts would cause class-sizes to balloon, decimate course offerings and after school programs, particularly music, art, physical education, curtail academic support for at risk children, eliminate counseling services, and rollback early childhood programs including full day kindergarten and pre K.
If our focus really is "jobs, jobs, jobs", it doesn't make sense to propose cuts that would cause thousands of layoffs in our schools and rob children of the programs they need to compete in a global knowledge economy. These proposed cuts are on top of the cuts from last year which resulted in 10,000 positions being eliminated statewide including widespread layoffs.
Let me take a moment to tell you a little about the impact of the cuts in a few specific districts.
• The Yonkers school district is facing a $17.5 million cut in state aid, the potential elimination of 100 teachers and 100 School Related Professionals. As a result of last year's cuts, Yonkers has already suffered the evisceration of art, music, athletics and critical student support services. Music and visual arts would be reduced to intermittent instruction at the elementary level and many will not receive art or music instruction. Already two departments, Instruction/Curriculum and Reading/Language Development, have been eliminated. The district's guidance counselor/student ratio will increase from the already absurd maximum counselor caseload of 1:1,000, stretching those services even thinner.
• The Syracuse City School District is contending with a $47 million budget gap. If the Executive Budget proposal to slash $14 million in school aid to the city stands, job cut numbers would be at least 539. They would include 165 teachers, 156 teaching assistants, and 15 administrators and supervisors.
• The Sachem School District on Long Island, facing a $16 million cut in state aid, is looking at the loss of over 400 positions or 30 percent of their entire staff.
• In the Buffalo suburb of Orchard Park, which is facing a $6 million budget gap, state aid to the district would drop by $1.4 million under the Governor's proposed spending plan. As a result, officials are reviewing all non-mandated programs for possible elimination, including kindergarten, gifted and talented programs, electives, co-curricular activities, as well as increasing class sizes.
The list goes on and on.
Don't Erase Our Progress
When it comes to current educational attainment, New York is soaring. Education Week, an independent and widely respected education watchdog, says when it comes to student performance, the Empire State repeatedly rates near the nation's top.
In its recently released annual state-by-state "Quality Counts" guide, Education Week ranks the Empire State:
• No. 1 in the nation in working to close the achievement gap between students in high-income and low-income districts - an issue on which NYSUT has long taken the lead.
• No. 2 nationwide in overall student performance, just behind Maryland. This ranking is a far more meaningful measure of educational quality compared to data from the U.S. Census since the Education Week score factors in multiple areas of education policy and student performance.
New Yorkers are proud of their public schools. Seventy-nine percent of New Yorkers steadfastly say public education should not be cut - even in the midst of these tough economic times.
There are alternatives to the proposed cuts
New York is at a crossroads. Like most states, New York has seen a collapse in revenues from a national crisis spurred by the financial industry's reckless business practices and lax regulatory oversight. In the greatest recession of the last 70 years and its aftermath, families' needs are rising and the resources to meet them have fallen. Will we respond in ways that grow the economy by creating jobs and investing in families and communities across the state? Or will we choose a cuts-only approach that threatens New York's future?
New Yorkers want the Governor and Legislature to balance the state budget in a way that uses existing resources efficiently and raises additional revenues in ways that will not harm our already fragile economy and will create jobs. Our state must not respond with actions that will further hinder the growth of New York's economy or hurt the children and families hit hardest by the recession. Don't let our most vulnerable citizens bear the brunt of this recession. They didn't cause this economic meltdown and they continue to suffer its consequences most acutely.
Over the past 30 years, the top NYS income tax rate has been cut in half. With the recent extensions of the federal tax breaks originally adopted under President Bush valued at approximately $8 billion, this is no time to provide additional breaks to the highest income households. With most New Yorkers suffering from the effects of the financial industry's collapse, it is unconscionable to provide a near $5 billion a year tax break to the wealthiest few. We must continue the temporary income tax surcharges that were put in place in 2009. On December 31 of this year, the state's modest income tax surcharge on top earners will expire. The surcharge -- a mere one percent on single tax filers earning between $200,000 and $500,000 and 2.12 percent on filers earning more than $500,000-- generates $4.6 billion a year.
Additionally, New York state continues to give away billions of dollars in tax credits, abatements, grants and tax avoidance loopholes to very large corporations at the expense of small businesses and workers. This hasn't created the promised jobs and it doesn't work. Instead, let's make sure corporate tax breaks and state economic development grants are tied to the creation and retention of real jobs that pay good wages and include health coverage.
Oppose the Ill-conceived Tax Cap
New Yorkers want and need tax relief. Ill-conceived and irresponsible tax caps provide only the illusion of relief. If you have difficulty paying your property taxes or believe your taxes are too high, a tax cap will not help you. It is a gimmick and it would have a permanent, chilling effect on a community's ability to fund its schools. NYSUT supports a circuit breaker as the best mechanism to provide property tax relief to those who need it the most.
The Governor has advanced and the Senate has passed a Program Bill that includes a tax cap for school districts that is not the two percent that the Governor advocated for previously, but rather a zero percent tax cap. The school budget vote is eliminated and replaced with the tax levy proposition and the provisions of law relating to contingency budgets are eliminated as well.
By establishing an automatic zero when propositions are voted down, New York state would be abdicating its responsibility for ensuring a sound education for every child and would sentence thousands of children in less affluent areas to unequal access and unequal opportunity. It would make it impossible for districts to plan, to make multi-year commitments or establish economies based on multi-year contracts.
Here in New York, as negotiations between the Governor and legislative leaders continue, it is essential to learn from history and reject problematic provisions. Additionally, any potential tax cap plan must be designed as a temporary measure so that we can revisit its impact and reevaluate its necessity in better economic times.
There are many examples of damaging tax caps in California, Illinois, Indiana and Massachusetts. A hard two percent tax cap would result in thousands of layoffs, devastating cuts to programs and the loss of vital public services. If the governor's tax cap proposal had been in place last year, it would have meant a $600 million revenue loss for districts statewide. A recent report by the New York State School Boards Association estimated that a damaging tax cap could result in the loss of more than 13,000educator jobs in New York state this year alone. This is on top of the loss of 10,000 education jobs as a result of last year's budget cuts.
In the Governor's Program Bill the only exclusion to the cap is the tax levy needed to support voter approved capital expenditures. An arbitrary cap that fails to take into consideration rising costs beyond the control of school districts is a blunt instrument that would damage education and efforts to create equity for all children. Evidence from other states has shown that poorer districts have a harder time mustering the votes to spend more than a cap, only widening the achievement gap for children of color and for children who live in poverty. The undemocratic proposal to require a 60 percent majority to override is especially problematic. The proposed tax cap would erode democracy - because 41 percent of the electorate could veto a proposition supported by the majority of voters.
Tax caps can be particularly harmful if adopted during a weak economy and without the state aid our schools have been promised. Billions of dollars in Foundation Aid remain unpaid to school districts and this is funding that was intended to support every child's constitutional right for a sound basic education. Evidence has shown us, when school aid is funded, property taxes are held down.
Reject Proposals to Shift Costs and Impose Unfunded Mandates
Summer School Special Education: The Executive Budget proposes to reduce the state's level of reimbursement to school districts for summer school special education costs. This amounts to a cost shift or unfunded mandate of approximately $86 million to school districts.
Private Schools for the Blind and Deaf (4201 Schools): The Executive Budget would consolidate these 11 private schools into the broader classification of private special education providers and eliminate the direct state appropriation for these schools. The rate process for private special education providers has been repeatedly demonstrated to be problematic and unresponsive and could have potentially devastating implications for these schools. Likewise, this move also shifts $167 million in costs for the education and room and board for deaf, blind and physically disabled children to local school districts. This is at a time when districts are already under unprecedented financial stress. We ask that you reject the proposed changes to the funding of these schools.
BOCES: The Executive Budget proposal recommends eliminating BOCES aid to local school districts for certain administrative shared services. This proposal completely contradicts the Governor's focus on creating greater economies of scale and efficiencies in school districts and other local governments. Small, rural and poor school districts which gain from the economies of scale that BOCES are able to provide would be negatively impacted if the Executive Budget proposal to eliminate some currently aidable services is enacted. We should be strengthening the role of BOCES in providing cost effective regional education and administrative programs that improve student achievement while providing taxpayers with savings.
Teacher Centers: The Executive Budget does not include any funding for Teacher Centers. Now more than ever, investing in education and educational resources is essential not only to our economic recovery, but to continue increasing academic achievement. For years these centers ran the most successful collaboration in education because they were designed to bring high quality resources to P-16 institutions while increasing student performance. In addition to the $35 million in funding they received from the state, they leveraged over $40 million worth of additional in-kind support from outside resources. Funding for Teacher Center should be restored in the 2011-12 state budget.
National Board for Professional Teaching Standards: The Executive Budget proposes the elimination of funding for the National Board for Professional Teaching Standards Certification program which was funded at $490,000 in SY 2010-11. Funding for this program should be continued.
Library Aid: Libraries have once again been targeted for significant cuts in funding in the Executive Budget. For state fiscal year 2011-2012, the Governor has proposed a 10 percent or $8.45 million reduction in Library Aid on top of the five cuts that have been imposed over the past three years. Library Aid has been reduced from $102 million in 2008 to $84.45 million at the end of 2010. If the proposed cut is approved, Library Aid will have been reduced by a total of 26% or $26 million, to $76 million or below 1994 levels. These proposed cuts disregard the vital role that our libraries play in our schools, communities and on our college campuses. Library visitation and circulation numbers continue to climb, and the job search tools and assistance that libraries provide have become essential to the hundreds of thousands of unemployed New Yorkers.
Cost Saving Proposals
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, 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 purchase for all state agencies and local governments. The state should also explore self-insuring prescription drug procurement while protecting mandated benefit levels and eliminate the "risk charge" that siphons rebates to insurance middlemen.
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 (CHPS) standard developed jointly by SED and NYSERDA. Contrary to what you might believe, green schools do not cost more to build than conventional schools. In fact, green schools cost significantly less money to operate and use less water and energy, freeing up resources to focus on improving student education. A typical green school saves $100,000 per year in direct costs. If all new school construction and school renovations went green starting today, energy savings alone would total $20 billion over the next ten years.
In 1997 the Ohio School Facilities Commission launched an ambitious program to rebuild all 3,500 public schools as "green" schools rather than as conventional ones. The Commission found that building green schools would save the state an estimated $1.4 billion in energy bills alone.
The state should undertake other conservation measures which include implementing net-metering for school facilities where onsite devices such as solar panels could produce enough energy to give back to the grid and offset energy bills. NYPA and NYSERDA should provide training for school district energy managers and building personnel and provide seamless one stop technical assistance from audits to installation and financing.
Pension Smoothing
To provide school districts with options to help address spiking pension costs, legislation should be adopted to allow for an optional smoothing of pensions payments for the Teachers Retirement System. Allowing school districts the option to address this brief spike in costs through the amortization of pension payments will save education jobs and alleviate program cuts, while maintaining the integrity of the Teachers' Retirement System. If widely utilized, smoothing current pension costs could produce a two year savings of nearly several hundred million dollars for school districts statewide.
Early Retirement Incentive
Additionally, the state should implement a 55/25 early retirement incentive similar to the incentive offered in 2010. Last year's incentive saved a large number of jobs, by allowing long time public servants at the top of the salary scale an opportunity to retire without incurring a retirement penalty.
These incentives come at very little costs to the retirement system or employers and provide school districts with a tool to reduce or avoid layoffs and keep important educational programs in place.
Conclusion
We urge you to find alternatives to devastating cuts to education and the ill-conceived tax cap that has already passed in the Senate. Disinvesting in our student's education and walking away from our commitment to our most needy and vulnerable populations will only deepen the economic and social pain for families across the state.
Investments in education are critical to meeting the workforce demands of a global information and high tech economy and growing the state's economy. There is no better return for taxpayer dollars than maintaining our commitment to an excellent education for all schoolchildren. We stand ready to work with you to find alternatives to these cuts.
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