canâ€™t get there from here - the new york state council of school

Can’t Get There From Here

Budgeting challenges call for new directions in state policy to help schools raise student achievement

2nd Annual Survey of New York State School

Superintendents on Financial Matters

November 2012

Can’t Get There from Here: A survey on school fiscal matters | November 2012

1

Table of Contents

Page Highlights………………………………………………………………………………… 2

Introduction………………………………………………………….………………….. 3

Overall Fiscal Condition……….….…………………………….………………….. 7

Budgeting Choices………………..………………………….………………………. 13 Personnel………………………….………………….……………………………..… 14 Instruction…………………………………….….……………………………………. 15 Other direct student services…………………..………………..……………. 16 Operations, maintenance and construction……………….…………….. 16 Other actions…………………..……………………………………………………… 16

Impact of 2012-13 Budget Decisions…………………………..………………. 17

Adapting to the Tax Levy Cap……………………………………………………… 21 Assessing the impact……………………..…………………….…………..…….. 21 Tax levy cap impact on collective bargaining…….………………..…….. 22

Implementing Evaluation Reforms……...……………………….….…………. 24 Anticipated cost impact………………..………………………….………………. 24 Demands on administration.……..…….…………….………..………………. 25

Looking Ahead………………………………………………………………………….. 28 Anticipated cost pressures………………..…………………….……….………. 28 Tax cap or state aid – which is the greater concern?...................... 29 Priorities for mandate relief…….…………………………………….…….……. 30 Priorities for new funding……………………………………………..…….……. 33

About the Survey: Between August 16 and September 3, 2012, the New York State Council of School Superintendents conducted an online survey of its members who are superintendents on budgeting concerns for their districts. The survey was conducted using the services of K12 Insight, a strategic partner of the Council.

A total of 249 superintendents submitted complete responses, a response rate of 40.4%. Incomplete submissions from 47 superintendents were also included in the results.

Superintendents serving the Big 5 Cities (New York, Buffalo, Rochester, Yonkers, and Syracuse) and Boards of Cooperative Educational Services were not included in the survey because their systems’ budgets are not subject to voter approval and consequently do not report some of the financial data available for small city, rural and suburban districts.

The Council conducted a similar survey in 2011, with a similar response rate. In some instances, we compare results between the two years. However, the samples are different, since some of the superintendents responded in one year and not the other.

Finally, K12 Insight’s survey tools permit extensive cross-tabulations and we do report some findings broken down by region or district character (i.e., urban, suburban, or rural). Particularly when examining regional results, it is possible that the districts whose superintendents responded are not fully representative of their region. We do find some regional results to be more positive than anecdotal exchanges with district officials would have caused us to anticipate.


2

HIGHLIGHTS

The survey: The Council of School Superintendents conducted an online survey of its members on school fiscal matters; 249 superintendents (40.4%) submitted complete responses. Partial responses from 47 superintendents were also counted. Because their school budgets are not subject to voter approval, superintendents serving the Big 5 Cities and BOCES were not included in the survey. The Council conducted a similar survey in 2011.

Overall condition: 52% of superintendents say their district’s financial condition is worse or significantly worse than a year ago. In 2011, 75% of superintendents said their districts’ condition had worsened. The share of city superintendents reporting their districts’ financial condition is poor or very poor rose sharply, from 24% to 43%.

Reliance on reserves: 83% of superintendents are concerned or very concerned by their district’s reliance on one-time resources (reserves) to fund recurring costs. Without the use of fund balance this year, districts would have needed to raise taxes by 7 percent more than they actually did, or make cuts of corresponding magnitude.

Financial insolvency: 9% of superintendents say that within two years, given current trends, their districts may become unable to ensure some financial obligations will ever be paid. This share would equate to roughly 60 districts. Altogether 41% foresee reaching that condition within 4 years. North Country superintendents foresee the most immediate threats.

Educational insolvency: 18% of superintendents say that within two years, given current trends, their districts may become unable to fund all state and federal mandates for instruction and student services. 77% foresee reaching that condition, either within 4 years or beyond. Again, concern is most immediate in the North Country.

Job cuts: Districts reduced their workforce by an average of 3.9% this year, on top of 4.9% in 2011-12. Reductions were generally steepest among city and rural districts and in non-teaching student support positions.

Salary and benefit concessions: 35% of superintendents report a cost saving agreement with their teacher union this year, the highest percentage in 3 years. 45% percent report agreeing to freeze their own salary or make another cost saving adjustment – as in 2011, this is a higher share than for any other employee category.

Instructional cuts: 59% of districts increased class sizes this year, compared to 48% in 2011-12. 31% reduced summer school. 31% reduced or deferred purchases of instructional technology– at a time when technology is seen as a key to improving outcomes and reducing costs.

2012-13 budget impact: More than 40% of superintendents said their district’s budget this year had a negative impact on core elementary school instruction, extra help for students who need it, operations and maintenance, extracurricular activities, athletics, and administration

Tax levy cap: 67% of superintendents said that the new property tax levy cap led their district to adopt a spending level below what would have been done otherwise. 60% said the cap caused their adopted budget to have a more negative impact on programs than would have otherwise occurred. 59% said the cap makes it more likely that they will be able to negotiate cost savings with their teacher union – or that it had already had that impact.

Teacher/Principal Evaluations: 70% of superintendents said new requirements for teacher and principal evaluations will require their districts to spend significantly more than under prior practices. Professional development (training) needs are seen as the biggest cost-driver followed by new student assessment costs. 40% of superintendents say teacher evaluations will now consume more than 40% of a typical principal’s time, raising concerns about how to balance other responsibilities.

Tax cap or state aid – which is a greater concern?: Asked which is the greater financial concern for their districts – the tax levy cap or possible future state aid levels – 44% picked state aid (up from 23% in 2011), 13% chose the tax cap (down from 25%), and 43% said they are of equal concern. In poorer upstate regions away from the Hudson River, only 5% of superintendents now pick the tax levy cap as the greater concern.

Priorities for mandate relief: Superintendents’ top mandate relief priority is to amend the Triborough law’s guarantee of “step” increases after a collective bargaining agreement has expired. Actions to reduce health care costs and stop unfunded mandates were other leading priorities.

Priorities for new spending: As in 2011, providing more extra help for students who need it emerged as the top priority should new funding become available.


3

Introduction

This is a report chiefly about the financing of

education. But the real business of schools is

learning, preparing young people to thrive in life

beyond school.

The surveys we summarize in this report explain

the financial obstacles that school leaders foresee in

their efforts to deliver that result for all the children

and young people they serve.

The challenge and the mission New York is a hugely diverse state, in ways that

can inspire or discourage. Those disparities appear in

schools, as well as other aspects of our state.

We are home to some of the nation’s absolute best

public schools. Perennially, we dominate the Intel

Science Talent Search. We rank second among the

states in percentage of high school graduates earning

a three or better on Advanced Placement exams.

At the same time, by one measure, we rank 44th in

high school completion rate for African-American

students, and 45th for Hispanic students.

We usually lead the nation in per pupil spending,

along with our neighbors in the northeast. Yet we

also have among the widest gaps in spending between

high and low poverty school districts, exceeding all

our neighbors.1

Now the long quest to lift all students to high

school completion by has been joined by a new goal –

not just in our state, but across all states: to

guarantee every graduate finishes school prepared to

succeed in college, a career, or both.

That goal ought to be a common sense propo-

sition: if a son or daughter meets the expectations

schools and the State of New York have set for

earning a high school diploma, that achievement

should attest he or she is prepared to succeed in the

next steps toward adult life.

The goal also matches the promise of the state

constitution – “…a system of free common schools,

wherein all the children of this state may be

1 Education Law Center, Is School Funding Fair? A National Report Card. June 2012.

educated.” Courts have interpreted the promise to

mean schooling that prepares students for the adult

responsibilities of competitive employment and civic

participation, voting and jury service.

High rates of remedial class-taking in college

provide one piece of evidence that we have work to do

to guarantee real readiness for adult challenges.2 It is

true that if this shortfall could be fixed in an instant,

colleges would strain to adapt. Also, America’s

generosity with second chances is a national strength.

But the demands that an aging population will pose

on public resources in years to come require all our

public enterprises to become more efficient.

There is another practical imperative. Middle skill

jobs have been disappearing, consigning workers to a

choice of extremes and contributing to a widening in

income inequality.3 More than ever, a future worth

aspiring to demands educating for higher skills.

Our surveys illustrate one set of obstacles in our

path to that destination.

Two surveys, a common theme: alarm for the future A year ago, the New York State Council of School

Superintendents published results from our first-ever

comprehensive survey of our members about their

districts’ budgeting choices and financial prospects.

Stressing that districts had already been through two

difficult years before the survey, the report noted,

“Concern over the accumulating impact of past

budget choices is compounded by what lies on the

horizon for schools – rising expectations combined

with diminished revenues.” The report found “near

universal alarm about future prospects.”

THE COUNCIL conducted a second finance survey

just before the start of this school year. We conclude

that the level of alarm over the future has not

diminished, although the pace of deterioration in

school finances may have slowed.

2 For example, see Testimony of Drew Matonak, president of Hudson Valley Community College, New NY Education Reform Commission, July 10, 2012. 3 Federal Reserve Bank of New York, Regional Economic Press Briefing on Job Polarization and Rising Inequality (May 30, 2012).


4

Last year vs. this year Comparing results on questions posed in both

years, a reader might conclude that, since smaller

percentages of superintendents gave negative

responses this year, conditions are improving. A key

point, however, is that negative impacts accumulate,

making future budgeting challenges greater.

For example, for 2011-12, superintendents

reported eliminating an average of 4.9 percent of

school positions. For 2012-13, that figure declined to

3.9 percent. But the implication is that districts have

eliminated an average of 9 percent of their positions

over the past two years, and would face more painful

personnel choices if future budgets demand more

cuts.

Insolvency New questions asked in the 2012 survey draw into

focus the financial threats school leaders anticipate.

In recent years, warnings that school districts and

municipalities are threatened by insolvency have

swelled. We asked superintendents, “Do you foresee

a point at which your district would be unable to

ensure that some of its financial obligations will ever

be paid?”

Statewide, 9 percent of superintendents anticipate

their districts could reach that position within two

years. That share would equate to roughly 60

districts. Altogether, 41 percent of superintendents

foresee facing that definition of insolvency within

four years.

Retaining the capacity to give all students a

meaningful education is an even wider concern than

just preserving financial solvency.

Statewide, 18 percent of superintendents foresee

their districts reaching a point within two years

where funding all state and federal instructional and

student service mandates will no longer be possible.

Half of all superintendents anticipate their districts

will fall into that state within four years.

Insolvency fears are especially acute in the North

Country, for example. Within two years, 25 percent

of North Country superintendents see their districts

facing financial insolvency, and 50 percent anticipate

educational insolvency.

Why? Why do school district leaders look to the future

with such alarm? We see at least five reasons.

First, schools have already been through a

prolonged stretch of difficult budgeting. The “low-

hanging fruit” – easier budget balancing options –

have already been implemented.

Most state aid was capped in 2009-10, then cut in

both 2010-11 and 2011-12. Districts typically did not

turn to local tax increases to offset the austerity in

state aid to the extent they did in prior periods.

Proposed tax increases during the recent span

averaged 2.9 percent – more than five points below

the 8.2 percent average increases proposed in 2003,

the last time aid was cut.

Second, some large and hard to control costs

have been surging.

We estimated that pension and health insurance

costs alone would have driven up total school

spending an average of 2.5 percent in both 2010-11

and 2011-12, even if all other costs could have been

frozen. These are hard to control costs: schools

cannot reduce pension obligations except by cutting

jobs and, like all employers, they struggle with health

care costs. Actual overall school spending increases

proposed by districts averaged under 1.4 percent both

years, indicating that districts cut other expenses to

absorb those costs.

Growth in pension costs slowed some for the

current year, but last month the State Teachers

Retirement System projected that employer

contribution rates will need to increase from 11.84

percent to between 15.5 and 16.5 percent in 2013-14.

8.2%8.7%

7.5%

6.1%

4.3%3.7%

2.1%

3.2% 3.4%

2.2%

4.8%

6.9% 6.6% 6.3%6.1%

5.3%

2.3%

1.4% 1.3%

1.7%0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Perc

ent c

hang

e ov

er p

rior

yea

r

Schools were holding down taxes and spending before the tax cap

% Change in proposed tax levy % Change in proposed school spending

SOURCE: Council analysis of NYSED Property Tax Report Card data ; Big 5 Cities not included


5

The contribution rate is applied against the payroll

for employees in TRS, so the rate increase is equiva-

lent to mandating districts to absorb a cost equal to

giving all those employees 3.6 to 4.6 percent raises,

on top of any actual raises. Had the size of this

increase been known at the time of our survey,

results might have been even more pessimistic.

There are other costs to absorb. A rule of thumb is

that “step” increases in collective bargaining agree-

ments – additional pay for an additional year of ser-

vice – are commonly around 2 percent. With payroll

typically accounting for half of school spending, a 2

percent increase in salaries alone would translate into

a 1 percent increase in overall spending. The state’s

Triborough law guarantees payment of these

increases even after a collective bargaining agreement

expires. Superintendents see Triborough as an

obstacle to negotiating both restraint on salary

growth and actions that could save on health

insurance. In the survey, superintendents identify

amending Triborough and prescribing minimum

employee contributions for health insurance as their

two top priorities for mandate relief.

Third, at least from a district-level perspective,

state government’s appetite for mandates on schools

has not been satisfied.

The Board of Regents and State Legislature have

approved limited changes in special education man-

dates. District sharing opportunities through Boards

of Cooperative Educational Services and joint pur-

chasing have been expanded. But these are small

steps. Governor Cuomo’s “Tier VI” pension reform

proposal was enacted and will significantly shift the

balance of costs from districts toward employees, but

its near-term savings impact is limited.

At the same time, THE COUNCIL’s surveys find

schools straining under new mandates arising from

the Regents Reform Agenda and the state’s commit-

ments under its federal Race to the Top grant.

In our 2011 survey, 77 percent of superintendents

said the cost of implementing Race to the Top items

would significantly exceed their funding from that

grant. This year, 70 percent said that new teacher

and principal evaluation requirements will require

significantly greater expenditures than past practices.

Beyond the monetary costs, the demands new

mandates create for school administration are

causing alarm too. Statewide, 73 percent of superin-

tendents predict that conducting teacher evaluations

will now require more than 30 percent of a typical

principal’s work week, raising concerns about their

availability to handle everyday student and family

issues. At the same time, our surveys indicate that

districts have cut their administrative staffs by an

average of 12 percent over the past two years.

Fourth, schools have been drawing from reserves

to avert actions that would have had even greater

negative impacts on students, local taxpayers, or

both. Barring a reversal in other financial trends,

that option will be exhausted.

The State Education Department has reported

that school district “rainy day” reserves shrank from

$2.76 billion in 2009-10, to $1.21 billion in 2012-13.4

Without use of “appropriated fund balance” in their

budgets this year, districts would have needed to

raise taxes by 7 percent more than they proposed (by

9.2 percent, instead of 2.2 percent), or make cuts of

corresponding scale. Among the poorest 10 percent

of districts, tax increases averaging 21 percent would

be needed to replace these temporary resources. In

open-ended comments, several superintendents

warned that their districts’ financial condition will

deteriorate rapidly as reserves are eliminated.

Fifth, approximately 92 percent of school district

revenues – local taxes and School Aid – are now

subject to state imposed growth limits.5

The property tax levy cap makes it harder for

school districts to gain voter approval for local tax

increases, and imposes harsher consequences if voter

approval is not obtained – districts are foreclosed

from any increase in tax levy.

As the chart on page 4 showed, school leaders

were holding down tax and spending increases even

before the cap became law. The cap has caused

4 New York State Education Department, “2012 Regents School Finance Symposium: Improving Student Learning in Fiscally Challenging Times,” September 11, 2012. 5 New York State Education Department, ibid.


6

further restraint, however. Responding to our survey,

67 percent of superintendents said the cap had led

their districts to adopt a lower budgeted spending

level than would have otherwise occurred.

The test of a budget is not only whether it attains a

numerical balance, but whether it advances larger

purposes as well. Statewide, 60 percent of

superintendents believe the tax levy cap caused their

districts to adopt budgets with a more negative

impact on programs and services than would have

happened without it.

Supporters have characterized the tax levy cap as

a blunt instrument that will ultimately force tighter

budgeting at the local level and action on mandate

relief at the state level. Fifty-nine percent of

superintendents do foresee the cap providing

leverage to negotiate savings agreements in collective

bargaining with their teacher unions.

Less known is that the other major school revenue

source – state aid – is also subject to a cap now. Tied

to yearly changes in the total personal income of state

taxpayers, the cap provided for a 4.1 percent ($805

million) increase in School Aid this year and is

expected to allow for a lesser increase in 2013-14.

Below is a chart comparing the per pupil increases

in general purpose state aid in the 2012-13 state

budget and the “Gap Elimination Adjustment” cut to

overall aid in the 2011-12 state budget. Districts are

sorted by property wealth per pupil. Three points

are worth noting:

The 2011-12 aid reductions were regressive,

generally imposing larger per pupil cuts on poorer

districts.

The 2012-13 increases are more progressive.

This year’s restorations are critical, but remain

small in comparison to what districts lost. Despite

the increase, 83 percent of districts are still

receiving less state aid than they did in 2008-09.

It should also be recalled that this year’s state aid

increase was partly offset by the end of the federal

Education Jobs Fund.

Our survey a year ago revealed striking differences

across regions over which revenue item was the

greater concern. More affluent regions picked the tax

levy cap, while poorer areas cited future state aid

levels. “Some districts,” we said, “ were capped by

circum-stances before they were capped by law” – so

property poor that no plausible local tax increase

could offset the combined impact of state aid cuts and

employee benefit increases.

Source: Council analysis of NYSED School Aid data

Our 2012 survey shows roughly a 20 point shift in

the direction of state aid as the greater revenue

concern across nearly all regions. As we speculated a

year ago, the tax levy cap raises the stakes over the

distribution of state aid for all districts.

Finally, the remaining 8 percent of school

revenues – federal aid – is not capped by state law.

But it is more likely to shrink than grow as Congress

and the President wrestle to construct long-term

deficit reduction plans.

Conclusion This report illustrates profound concerns super-

intendents share over the finances of the school

systems they lead. But they have larger challenges as

well – preparing new generations for the demands

adult life will present them in the decades ahead.

Whatever the prospects school leaders and voters

might have for balancing district finances, meeting

their greater goal at the same time will require help

from state leaders – changes in rules so that schools

produce more learning for their students with the

resources their taxpayers provide, and more consis-

tent financial support from the state, especially for

those serving the poorest children and communities.

-$978

-$1,472

-$1,487

-$1,298

-$1,185

-$812

-$1,096

-$1,070

-$805

-$536

-$400

-$944

$318

$342$292

$250

$186

$195

$147

$160$113

$54

$21

$189

-$1,500 -$1,000 -$500 $0 $500

(Poorest 10%) 12345

NYC6789

10NYS

Per pupil change in aid

Per pupil change in major School Aid elementsDistricts grouped by property wealth per pupil

2011-12 Gap Elimination Adjustment 2012-13 General purpose aid restorations


7

Overall Fiscal Condition THE COUNCIL’s survey asked superintendents

several questions related to the overall fiscal

condition of their district. Some questions were

repeated from the 2011 survey, to allow analysis of

year-to-year change.

New questions posed this year add to the wave of

warnings about insolvency threatening schools and

municipalities. For example, more than 75 percent

of superintendents can foresee a time when their

districts could be unable to ensure that some of their

financial obligations would ever be paid.

Writing of our 2011 findings, we said, “The survey

reveals widespread alarm about the financial outlook

for the state’s public schools.” Questions repeated in

the 2012 survey give continuing cause for alarm, with

only a few faint signs of improvement from last year’s

survey.

Insolvency

About three years ago, school district leaders

began warning of possible financial insolvency and

asked whether it is possible for a district to declare

bankruptcy.6 More recently, leaders have begun to

speak of “educational insolvency” – envisioning

schools reaching a point where they would be unable

to provide students an adequate education. This

year’s survey explores both concerns.

To learn about fears of financial insolvency, we

asked,

Given current revenue and expenditure trends,

and current reserve levels for your district, do

you foresee a point at which your district

would be unable to ensure that some of its

financial obligations will EVER be paid?

Statewide, 9 percent of superintendents said they

anticipate their districts could face insolvency under

that definition within two years. That may appear to

6 The short answer is no, there is no legal mechanism for a school district in New York State to declare bankruptcy.

be a low share, but the figure would translate into

roughly 60 school districts.7

Alarmingly, 41 percent of superintendents believe

their districts may face financial insolvency within

four years, and another 36 percent fear it could come

at some point beyond four years. Only 15 percent of

superintendents said they did not foresee their

districts threatened by insolvency.

Superintendents of rural districts were most likely

to anticipate possible financial insolvency for their

school systems within the next two years.

7 A recent report by the New York State Association of School Business Officials (A Tale of Two Insolvencies, September 6, 2012) found that 215 lower wealth districts are on track to begin to exhaust all savings by 2015. District leaders will attempt to avert or delay actual insolvency, however.

1%

2%

6%

32%

36%

15%

9%

0% 10% 20% 30% 40%

Yes, we are currently unable

Yes, within 1 year

Yes, between 1 and 2 years


Yes, beyond 4 years

No, I do not foresee that time

Unsure

Do you foresee a point at which your district would be unable to ensure that some of its financial obligations will EVER be paid?

9%

7%

4%

11%

0% 2% 4% 6% 8% 10% 12%

Total

City

Suburb

Rural

% of districts foreseeing financial insolvency within 2 years


8

By a wide margin, superintendents in the North

Country region8 were most likely to foresee the

possibility of financial insolvency in their district’s

nearer-term future.

8 The regions used in this report are defined as follows:

Long Island: Nassau and Suffolk Counties

New York City

Lower Hudson Valley: Putnam, Rockland, Westchester

Mid-Hudson Valley: Dutchess, Orange, Sullivan, Ulster

Capital Region: Albany, Columbia, Greene, Rensselaer, Saratoga, Schenectady, Warren, Washington

Mohawk Valley: Fulton, Herkimer, Montgomery, Oneida, Schoharie

Central New York: Cayuga, Cortland, Madison, Onondaga, Oswego, Tompkins

North Country: Clinton, Essex, Franklin, Hamilton, Jefferson, Lewis, St. Lawrence

Southern Tier: Broome, Chemung, Chenango, Delaware, Otsego, Schuyler, Steuben, Tioga

Finger Lakes: Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Wayne, Wyoming, Yates

Western New York: Allegany, Cattaraugus, Chautauqua, Erie, Niagara

“Educational Insolvency”

Inability to fund the components of a basic

education is a more immediate threat for districts

than financial insolvency.

The survey defined educational insolvency in

terms of ability to fund state and federal

requirements and asked,

Given current revenue and expenditure trends

and current reserve levels for your district, do

you foresee a point at which your district

would be unable to fund all the instructional

and other student service requirements

established by laws or regulations approved

by the state and federal governments?

Statewide, 5 percent of districts reported they are

already unable to fund mandated instructional and

other student services. A total of 19 percent of

districts anticipate falling into this state of

educational insolvency within two years, and 51

percent of superintendents believe their districts

could reach that state within four years.

Consistent with other indicators of overall finan-

cial outlook, concern about educational insolvency

was greatest in the North Country. In that region, 50

percent of superintendents said they foresee their

districts becoming unable to meet state and federal

student service requirements within two years, and

18 percent say their districts are currently unable to

do so.

9%

0%

6%

0%

15%

7%

6%

25%

8%

6%

12%

0% 5% 10% 15% 20% 25% 30%

Total

Long Island

Lower Hudson Valley

Mid-Hudson Valley

Capital Region

Mohawk Valley

Central New York

North Country

Southern Tier

Finger Lakes

Western New York

% of districts foreseeing financial insolvency within 2 years

5%

5%

9%

32%

33%

12%

4%

0% 5% 10% 15% 20% 25% 30% 35%

Yes, we are currently unable

Yes, within 1 year



Yes, beyond 4 years

No, I do not foresee that time

Unsure

Do you foresee a point at which your district would be unable to fund all the instructional and other student service requirements established by laws or regulations approved by the state and federal governments?


9

Superintendents of rural districts were most likely

to predict educational insolvency within two years.

Other measures of overall fiscal condition

One of the most striking findings in the 2011

survey was the near universal worry about reliance on

reserves: 89 percent of superintendents said they

were somewhat or very concerned by their district’s

use of reserves to pay recurring costs. For 2012, a

similar share of superintendents expressed concern

(83 percent), but the proportion saying they are very

concerned declined from 66 percent to 43 percent.

Statewide, 52 percent of superintendents describe

their districts’ financial condition as somewhat or

significantly worse than a year ago, down from last

year’s 75 percent figure.

Despite grave worries for the future, few superin-

tendents were willing to characterize their district’s

current fiscal condition as poor or very poor, either

last year or this year.

Comments volunteered in response to open-ended

questions suggest superintendents focused on the

immediate financial condition of their districts in

their answers. For example, one downstate suburban

superintendent wrote, “Our current strong financial

health is simply current - I will not be able to describe

us as strong in a year or two.”

Comparing regions and types of communities

As in 2011, there were variations across types of

districts and across regions in the assessment of

overall fiscal condition and trajectory.

In both years, urban superintendents were more

likely to view their district’s financial condition as

poor. The share of city superintendents assessing

their district’s financial condition as either poor or

very poor jumped sharply – from 24 percent to 43

percent.

19%

11%

17%

14%

22%

14%

12%

50%

8%

15%

21%

0% 10% 20% 30% 40% 50% 60%

Total

Long Island

Lower Hudson …

Mid-Hudson Valley

Capital Region

Mohawk Valley

Central New York

North Country

Southern Tier

Finger Lakes

Western New York

% of districts foreseeing educational insolvency within 2 years

19%

14%

18%

21%

0% 5% 10% 15% 20% 25%

Total

City

Suburb

Rural

% of districts foreseeing educational insolvency within 2 years

66%

23%

6%

5%

49%

34%

11%

6%

0% 10% 20% 30% 40% 50% 60% 70%

Very concerned

Somewhat concerned

Not concerned, our use of reserves is limited

Our district is not drawing upon reserves to pay for recurring operating

expenses

To what extent, if at all, are you concerned that your district is drawing upon reserves to pay for recurring operating costs?

2011 2012

1%

6%

41%

42%

10%

1%

2%

23%

53%

22%

0% 10% 20% 30% 40% 50% 60%

Significantly better

Somewhat better

About the same

Somewhat worse

Significantly worse

Compared to one year ago, how has the financial condition of your district changed, in terms of its ability to fund

services meeting expectations of parents in the community?

2011 2012


10

Superintendents leading urban districts were also

more likely to say their district’s financial condition

had worsened from a year ago, and to express

concern about reliance on reserves. Ninety-five

percent of city superintendents said they were

somewhat or very concerned by their district’s use of

reserves to fund continuing costs, compared to 83

percent for suburban superintendents and 82 percent

for rural superintendents.

Looking across regions of the state, results are

mixed. Generally, superintendents in the North

Country and Southern Tier appear to have the

greatest concerns about overall financial condition

and outlook.

Digging into reserves

The practice seems to have diminished, but for a

time it was popular for elected officials and news

sources to condemn schools for “excessive” reserves

and call on them to drain those accounts to avert

layoffs or property tax increases. There have always

been at least three problems with this strategy.

First, schools are more limited by law in the

reserves they are allowed to maintain than other

public entities in New York State.

School districts are permitted to maintain an

unrestricted fund balance equal to up to 4 percent of

their budget. Municipalities have no percentage limit

and the Government Finance Officers Association

recommends maintaining an unreserved fund

balance of between 5 and 15 percent of general fund

revenues, or up to two months’ expenses. So what

New York school districts are permitted to maintain

as a maximum rainy day fund is less than what

experts deem adequate as a minimum.

Second, reserves run out. Eventually, a district

must either permanently reduce expenditures to align

them with its reliably recurring revenues, or raise

taxes to match revenues with spending. The deeper

the reliance on reserves, the more painful the day of

reckoning when they run out.

As noted in the introduction, the State Education

Department has reported that school district “rainy

day” reserves shrank from $2.76 billion in 2009-10,

to $1.21 billion in 2012-13.

Third, year-in and year-out, schools already use

reserves to manage turbulence in their financial

operations, some of which arises from swings in the

state’s fiscal posture.

For example, in the Property Tax Report Cards

filed for their May 2012 budget votes, school districts

reported using “assigned” fund balances totaling over

$1.2 billion. Without these funds appropriated out of

existing reserves or current year operating surpluses,

districts would have had to raise taxes or cut

spending by an equivalent sum.

To put that figure in perspective, to match what

they used from fund balances in their 2012-13

budgets, districts would have had to raise local taxes

24%

12%

20%

17%

43%

10%

18%

17%

0% 10% 20% 30% 40% 50%

City

Suburb

Rural

Total

% Responding Poor or Very Poor

How would you describe the current financial condition of your school district, in terms of its ability to fund services meeting the expectations of parents in your community?

2011 2012

Various measures of fiscal condition, by region

Region

Financial condition

poor/very poor

Financial condition

worse than 1 year ago

Reserves less than

adequately funded

Concerned about

reliance on reserves

Total 17% 52% 31% 82%

Long Island 2% 43% 21% 75%

Lower Hudson Valley 13% 34% 32% 77%

Mid-Hudson Valley 7% 53% 33% 73%

Capital Region 27% 59% 42% 81%

Mohawk Valley 18% 56% 30% 89%

Central New York 20% 35% 25% 70%

North Country 39% 54% 39% 94%

Southern Tier 27% 65% 49% 87%

Finger Lakes 6% 48% 13% 87%

Western New York 17% 64% 29% 88%


11

by 6.8 percent more than they actually proposed (9

percent, rather than 2.2 percent). Or they would have

had to cut spending by an average of 4.1 percent from

what they actually budgeted.

By these measures, poor districts depended on

reserves the most in putting together their 2012-13

school budgets. Without what they appropriated

from fund balance, the poorest 20 percent of districts

(measured by property wealth per pupil) would have

had to raise taxes by an additional 21 percent.

The mandated low percentage limit on

unrestricted reserves for school districts may have

made sense when school revenues were more stable

and predictable from year-to-year. But as state

government became increasingly dependent on

receipts from Wall Street-related activities, School

Aid entered an era of boom and bust cycles,

increasing financial uncertainties for all districts, and

especially for poor, heavily aid dependent school

systems.

SOURCE: Council analysis of NYSED Property Tax Report Card data

-14%

-31%

-23%

-9%

-18%

-22%

-10%

-9%

-12%

-4%

-7%

7%

21%

17%

11%

10%

11%

8%

6%

5%

3%

3%

-35% -25% -15% -5% 5% 15% 25%

Total State

1 (Proorest 10%)

2

3

4

5

6

7

8

9

10

What happens when reserves run dry?Districts grouped by property wealth per pupil

Change in unrestricted fund balance from 2011-12 to 2012-13

Additional tax increase which would be needed without use of fund balance (i.e., appropriated fund balance as % of tax levy)


12

In their own words: Overall Fiscal Condition…

We are at our breaking point. Classrooms are full, 27 -30 students in most 7-12 classrooms and 19-24 students in elementary classrooms. We have cut all the low hanging fruit, and climbed the tree for the rest. Our next step is to start cutting off branches, which means we will be cutting off chunks of the learning we yield as an institution. ~ Upstate rural superintendent

No matter how much we have in reserves, TRS/ERS, health insurance, and Triborough along with meager NYS aid, makes the financial model unsustainable. ~ Upstate suburban superintendent

Our district is not able to offer the level of intervention services that our students need academically. We are getting by through under-spending our budget, being lean administratively and unfortunately not offering the depth of intervention serves our students need. ~ Upstate city superintendent

We have developed a plan to burn reserves over the next three years and making significant cuts in each of those years to arrive at a point where we will stabilize. The reserves that we do have will provide us with the time make those cuts until we stop burning our fund balance. However, we will have to significantly reduce our ability to meet the educational needs of our community because of diminishing resources. ~ Downstate city superintendent

We are currently using a significant amount of reserves as recurring revenue. The reserves are soon to expire. I have no good plan as to how we will replace this lost revenue stream. We have already eliminated 17% of our faculty and staff. People are complaining about class size now. Class size will only increase in years to come. Programs will be eliminated and down-sized. ~ Upstate suburban superintendent

The fluctuating unknown costs of Special Education make it almost impossible to create a sound budget in a small, rural school district. ~ Upstate rural superintendent

We are not meeting the state and federal requirements for academic intervention services now, particularly at the high school level. We are straining to provide the necessary resources for our elementary and middle school children, because we know that in the long term children will not be successful without emphasis on

early literacy. We have consciously chosen to forestall fiscal disaster by cutting everything possible and being out of compliance with older children. ~ Upstate rural superintendent

We have cut about 15% of staff in the last four years. However, we are using 400% more fund balance and reserves than in 2008. It is not sustainable and I fear that within two years we will be financially insolvent. ~ Upstate rural superintendent

We are in "ok" shape for now. No doubt many, many others are not. It's a slippery slope. Even if results show some districts like ours are "ok" - that will change before we know it. And what does that say for others who are already decimated. ~ Downstate suburban superintendent

While we are solvent now, the tax cap will erode away at our fiscal stability. Uncontrollable expenses such as increases in retirement contributions, health care costs, unfunded mandates, fuel, etc. are eating away at our ability to deliver program. ~ Upstate rural superintendent

We are a Special Act School District and are rate based. BUT, funding remains an issue as our rate has not increased in 5 years and we are not allowed by law to carry a fund balance. ~ Upstate rural superintendent

If the gap elimination adjustment remains unaltered, we will not be able to accomplish our educational mission in the 2013-14 school year. ~ Upstate rural superintendent

The local community cannot support additional contributions to funding the educational programs offered their children, yet each child in New York State should have opportunity and access to a sound educational program. We have been operating by not filling positions due to attrition for the last 10 years… Offering two languages was given up over 8 years ago. Three elementary buildings with a total of 600 students share 1 art teacher - that happened 5 years ago - we can't meet the mandates for PE at the elementary level. The HS offers 3 AP classes - the list goes on, but when someone retires, the position wasn't filled. Right now we are waiting for a retirement in the guidance staff, or we will have another reduction of a person. ~ Upstate rural superintendent


13

Budgeting Choices The core of THE COUNCIL’s survey is an exploration

of the budgeting choices schools have made over the

past three years.

General observations about school budgets As in last year’s report, we stress three points

before presenting the survey’s findings on the specific

actions districts took in putting together budgets.

First, “You can’t cut what you don’t have.” Poor

districts are less likely to report that they eliminated

advanced classes because they are less likely to have

them in the first place. A district conducting all

classes in a single building will not report that it

closed a school, unless it takes the extreme step of

“tuitioning out” all its students to a neighbor.

Related, “You cannot cut what you have already

decimated.” In last year’s survey, for every specific

budget action we identified, the proportion of

superintendents saying their district had used it

increased every year. That is not true this year;

smaller percentages of districts exercised some

options this year than in the year before. This could

happen if a district’s financial condition has improve-

ed. But another explanation could be that a district

has already cut the function as much as prudent, or as

much as permitted by law – our next point.

Second, some items cannot be cut because they

are mandated by Albany or Washington. For

example, the operation of special education services

is heavily prescribed by state and federal mandates

and over multiple years, special education is seen as

less negatively affected by budget decisions than any

other service. In the same vein, the demands of the

state’s new teacher evaluation requirements have

raised concerns about maintaining the administrative

capacity necessary to comply.

Third, understanding where schools can cut

requires recognizing where their spending goes to

start.

One way to break down school spending is by the

commodities it buys; another is by the purposes it

serves. Personnel – salaries and benefits – comprises

about three quarters of school spending by

commodity. Instruction consumes a comparable

share by purpose.

Source: Council analysis of NYSED School District Fiscal Profile data (2009-10); Big 5 Cities not included

Source: Council analysis of US Census Bureau data (2009-10); Big 5 Cities not included

Personnel As noted, 70 to 80 percent of spending in a typical

district is devoted to personnel. That means 70 to 80

percent of any cuts needed to achieve a balanced

budget are likely to come from personnel. Although

the impulse of school leaders and voters may be to

“cut things before people,” that becomes harder and

harder after a series of lean years exhausts less

painful options.

There are two ways to reduce personnel costs:

employ fewer people, or spend less per employee.

Like it or not, districts have more latitude to exercise

the former option than the latter – salaries and many

benefits are locked-in by contracts, and pension

contributions are prescribed by state law and retire-

ment system calculations. Nonetheless, THE

COUNCIL’s survey found districts using both

approaches.

Instruction, 74.1%

Operations & maintenance,

6.5%

Debt service, 6.6%

Other, 5.4%

Transportation, 5.1%Central

Office, 2.3%

Where school spending goes -- by purpose

Salaries & wages, 54.5%

Employee benefits,

20.2%

Everything else, 25.2%

Where school spending goes -- by commodity


14

Teacher compensation is the largest single item in

virtually every district’s budget and reducing teaching

positions was the most commonly reported personnel

cost reduction. Statewide, 67 percent of superintend-

dents said their districts reduced teaching positions

this year, down from 72 percent in 2011-12.

We estimate that districts reduced their teaching

staffs by an average of 3.6 percent, this year, down

from 4.3 percent in 2011-12.

Fewer districts also report cutting administrative

positions this year – there are fewer to eliminate.9

But districts continued to cut these positions more

steeply than teaching jobs, eliminating an average of

5.2 percent of their administrative positions.

9 By law, districts are required to report compensation for all administrative positions carrying the title superintendent, or deputy/associate/assistant superintendent, or any other certified administrative position (e.g., principal) paying more than $123,000. For 2012-13, 301 districts – 44 percent of the total – report only one position meeting the criteria – their superintendent. Some may have other central office positions bearing different titles and paying below the reporting threshold, but this measure does give some indication of how administratively lean many districts are.

Position reductions are down across all categories

compared to 2011-12. But it is essential to recognize

that the impact is cumulative – this year’s 3.9 percent

reduction in total positions comes on top of last year’s

estimated 4.9 percent cut. Further, data compiled by

the Gannett News Service Capitol Bureau10 shows

that districts outside the Big 5 cities reduced total

staffing by another 3.9 percent in the two preceding

years (2009-10 and 2010-11). Compounding all these

figures suggests that school districts have eliminated

roughly 12 percent of their positions since 2008-09.

As in 2011-12, job cuts tended to be deeper in city

and rural districts than in suburbs. City districts

reported cutting total positions by an average of 5.2

percent, compared to 4.4 percent in rural districts

and 3.3 percent in suburbs.

10 “School enrollment, staff continue to decline,” Rochester Democrat and Chronicle, August 20, 2012.

PERSONNEL 2012-13 2011-12 2010-11

At least once in last

3 yearsSalary freeze or other cost reduction in salary or benefits for superintendent 45% 59% 34% 79%Cost-reduction concession in salaries or benefits for other central office administrators 36% 50% 22% 69%Cost-reduction concession in salaries or benefits for building level administrators 35% 45% 20% 66%Cost-reduction concession in salaries or benefits agreed to by teacher union 35% 31% 15% 54%Cost-reduction concession in salaries or benefits agreed to by any other union 30% 28% 13% 48%Reduction in central office administration positions 22% 25% 22% 47%Reduction in building-level administration positions 18% 25% 20% 43%

Reduction in teaching positions 67% 72% 62% 87%Reduction in other instructional support or student services positions 56% 60% 46% 76%

Reduction in other positions 59% 60% 47% 79%

Other reduction in personnel costs 38% 33% 27% 47%

Layoffs Attrition

Total Positions

Eliminated

Classroom teachers 2.2% 1.4% 3.6%Other instructional or student support personnel 3.9% 2.0% 5.9%Administrators 3.1% 2.1% 5.2%Other Employees 1.7% 1.0% 2.7%TOTAL 2.4% 1.5% 3.9%

Percentage of positions eliminated by category, 2012-13

4.3%

8.0%

7.5%

3.6%

4.9%

3.6%

5.9%

5.2%

2.7%

3.9%

0% 2% 4% 6% 8%

Teachers

Other Student Support

Administrators

Other

Total

Percent reduction in positions by category, 2011-12 and 2012-13

2011-12 2012-13


15

INSTRUCTION 2012-13 2011-12 2010-11


3 years

Increased class size 59% 48% 30% 67%

Reduced non-mandated art classes 16% 18% 11% 31%Reduced non-mandated music classes 20% 19% 9% 33%

Reduced advanced or honors classes 17% 13% 7% 24%

Reduced summer school 31% 27% 20% 44%Reduced extra help for students during the regular school day or year 22% 23% 14% 32%Reduced student enrollment in career and technical programs 18% 12% 7% 23%Reduced/deferred purchase of instructional technology 31% 26% 20% 42%Reduced/deferred purchase of textbooks 18% 13% 8% 21%Reduced/deferred purchase of library materials 17% 13% 9% 22%

Eliminated prekindergarten 1% 0% 1% 3%

Reduced prekindergarten 5% 2% 1% 8%

Eliminated kindergarten 0% 0% 0% 1%Moved from full-day to half-day kindergarten 0% 0% 0% 2%

Other reduction in kindergarten 0% 1% 0% 3%Combined grade two levels in a single classroom 4% 2% 1% 7%

Other reduction in instruction 34% 23% 14% 38%

Superintendents led other categories of employees

in accepting salary freezes or agreeing to other

compensation changes to save money for their

districts: 49 percent of superintendents report taking

such steps in 2012-13, and 79 percent said they had

done so at least once in the past three years.11

Cost-saving concessions have been less common

among unionized employees. Nonetheless, the per-

centages have grown. For example, 35 percent of

superintendents report a cost-reduction agreed to by

their teacher union in 2012-13, up from 15 percent

two years ago (2010-11). As discussed below, the

property tax levy cap may have an impact on

collective bargaining in some districts.

Instruction While personnel is the largest area of school

spending measured by commodity, instruction is the

greatest expense area measured by purpose,

accounting for 74.7 percent of total spending

according to the State Education Department’s

School District Fiscal Profiles. Accordingly, when

cuts are necessary, it is hard for schools to spare

either of these large areas.

By a wide margin, the most common cost reduc-

tion in instruction this year has been to increase class

sizes, reported by 59 percent of districts, up from 48

percent in 2011-12. Next most common were reduc-

ing summer school and reducing or deferring the

purchase of instructional technology, each reported

by 31 percent of superintendents. Then came reduc-

11 According to administrative compensation data reported to the State Education Department, the statewide average superintendent salary has been roughly flat for the past three years – $165,577 in 2010-11,$165,464 in 2011-12, and $165,953 in 2013-13. In addition, in each of the past two years, over half the state’s districts report paying their superintendent the same or less compared to the prior year.

ing extra help for students during the regular school

day or year. As explained elsewhere in this report,

assuring extra help for students emerges as a top

concern for many superintendents.

This year’s survey added questions asking

specifically about actions affecting early childhood

education – kindergarten and prekindergarten.

Although there have been warnings that some

districts are forced to consider cutting kindergarten,

it appears few have done so – yet.

One superintendent reported that his or her

district eliminated kindergarten in 2010-11. In each

of the three years asked about, one superintendent

reported a district scaling back from full-day, to half-

day kindergarten. This suggests that over the past

three years, a total of 2 percent of districts have made

that reduction in kindergarten services.

For the current year, 5 percent of superintendents

reported reducing prekindergarten, and 1 percent

reported eliminating the service altogether. Not all

districts offer pre-K, however, so the prevalence of

cuts would be higher if counted against districts

which actually had a program to cut.

Total positions eliminated, by category and type, 2012-13

City Rural Suburb Total

Teachers 4.8% 4.2% 3.1% 3.6%

Other Student Support 7.7% 6.0% 5.4% 5.9%

Administrators 4.0% 6.1% 5.0% 5.2%

Other 3.5% 3.5% 2.1% 2.7%

Total 5.2% 4.4% 3.3% 3.9%


16

Other direct student services THE COUNCIL survey finds that districts have

continued to make cuts to other student services. The

proportions of superintendents saying their districts

reduced sports or other extracurricular activities

declined from 2011-12, after sharp jumps in reported

cuts to those areas last year. The share saying they

had reduced special education rose. In all of these

areas, over half of superintendents said their districts

had made cuts at least once in the last three years.

Operations, maintenance and construction Operations and maintenance costs comprise only

6.5 percent of total school spending on average, but

in striving to “cut things rather than people,” districts

have continued to be aggressive in seeking savings

from this area.

Of all the budget actions across all areas,

implementing some form of energy conservation (57

percent) was the third most common, behind the

connected actions of cutting teachers (67 percent)

and increasing class sizes (59 percent). The share of

superintendents reporting their districts have

deferred maintenance is rising, from 26 percent in

2010-11, to 40 percent this year.

An apparently small proportion of districts

anticipates deferring a capital project this year (16

percent). But not all districts need to take on a

capital project in any given year.

Other actions Our survey also allowed superintendents to check-

off an assortment of miscellaneous budget cutting

strategies.

At least 40 percent of superintendents reported

reducing funding for staff travel and professional

development, reducing participation in BOCES

services, making other shared service arrangements

outside of BOCES, and reducing reserves.

Some of the districts which reported reducing use

of BOCES services said they had also increased their

use of these services. From past anecdotal

information gathering efforts, we have found districts

scaling back participation in BOCES special educa-

tion programs, choosing to serve students with

disabilities in-house instead. At the same time,

districts also reported making more aggressive use of

BOCES administrative services, including cooperative

purchasing, shared business offices, and energy

management, for example.

The survey also shows steady growth in shared

service arrangements outside of BOCES, reaching 40

percent in 2012-13.

Statewide, 14 percent of superintendents report

that their districts closed a school building at least

once in the past three years. As observed above, “you

can’t cut what you don’t have.” Small districts

operate fewer schools, so, not surprisingly, only 2

percent of districts with fewer than 500 students

closed a building. But 29 percent of those with over

5,000 students report having done so.

OTHER DIRECT STUDENT SERVICES 2012-13 2011-12 2010-11


3 years

Reduced interscholastic sports 34% 41% 27% 57%Reduced other extracurricular activities (other than interscholastic sports) 34% 39% 22% 55%Changes in special education which reduced costs 41% 37% 22% 52%Reduced other direct student services 27% 22% 12% 32%

Reduced pupil transportation 28% 28% 12% 42%Other reduction in student services costs 21% 16% 11% 24%

OPERATIONS, MAINTENANCE AND CONSTRUCTION 2012-13 2011-12 2010-11


3 years

Deferred maintenance 40% 36% 26% 47%

Any form of energy conservation 57% 48% 33% 66%

Delayed a capital project 16% 14% 10% 24%Outsourced custodial/ maintenance work 2% 2% 2% 4%Reducing or deferring purchases of supplies, other than those related to instruction 41% 36% 26% 48%Other reduction in operation, maintenance or construction costs 39% 32% 22% 45%


17

Impact of 2011-12 budget decisions Our survey also asked superintendents to assess

the impact of their districts’ 2012-13 budget upon

various functions. More than 40 percent of superin-

tendents anticipated that the adopted budget would

have a negative impact on these functions:

• operations and maintenance (50 percent),

• extracurricular activities (49 percent),

• extra help for students who need it (48 percent),

• administration (46 percent),

• athletics (45 percent), and

• core instruction in elementary grades (41 percent).

Percentages of superintendents anticipating that

their districts’ 2012-13 budget would have a negative

impact were down modestly across all service

categories. Few superintendents anticipate positive

impacts, however.

“Extra help for students who need it” drew the

highest share of superintendents foreseeing a severe

negative impact from the district budget, with 9

percent.

Budget impacts by district type Rural superintendents were more likely to

anticipate negative effects on basic instruction from

their districts’ adopted budgets than were their city

and suburban counterparts.

City superintendents exhibited widespread

concern about extra help for students who need it, as

well as operations and maintenance, administration,

and extracurricular activities, with over 60 percent

foreseeing negative effects in each area.

Among rural superintendents, extracurricular

activities (53 percent) and extra help (52 percent)

were most commonly seen as negatively affected.

Impact on administration was the most common

concern among suburban superintendents (49

percent), followed by operations and maintenance

(46 percent).

Conversely, between 10 and 15 percent of

suburban superintendents anticipate their districts’

2012-13 budgets will have positive effects on core

elementary, middle or secondary instruction.

OTHER ACTIONS 2012-13 2011-12 2010-11


3 years

Closed a school building 5% 7% 3% 14%Change in school schedule for the purpose of reducing costs (e.g., discontinuing block scheduling) 14% 10% 4% 23%

Reduced funding for staff travel 52% 48% 35% 61%

Reduced participation in professional development by administrators 44% 41% 28% 54%

Reduced participation in professional development by teachers 42% 40% 26% 51%Reduced participation in professional development by other staff (other than teachers and administrators) 32% 30% 20% 38%Reduced participation in BOCES services 42% 36% 23% 51%Increased participation in BOCES services 25% 21% 9% 31%Increased participation in other shared services arrangements (not through BOCES) 40% 25% 13% 43%Reduced or eliminated undesignated reserves 52% 43% 26% 58%Reduced or eliminated designated reserves 47% 41% 22% 53%

Changed purchasing practices 36% 28% 16% 42%

Other 8% 7% 4% 11%


18

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2011 Instruction in English, mathematics, science, and soc. studies

2012 Core instruction in elementary grades

2012 Middle level instruction in English, math, science, and soc. studies

2012 High school instruction in English, math, science, and soc. studies

2011 Extra help for students who need it

2012 Extra help for students who need it

2011 Advanced or enrichment classes

2012 Advanced or enrichment classes

2011 Instruction in art

2012 Instruction in art

2011 Instruction in music

2012 Instruction in music

2011 Special education

2012 Special education

2011 Athletics

2012 Athletics

2011 Other extracurricular activities

2012 Other extracurricular activities

2011 Student transportation

2012 Student transportation

2011 Other student services

2012 Other student services

2011 Operations and maintenance

2012 Operations and maintenance

2011 Administration

2012 Administration

2011 Other district operations and services

2012 Other district operations and services

Impact of 2011-12 and 2012-13 budgets on selected school operationsSevere negative impact Some negative impact No change from prior year Positive impact


19

Budget impacts by region Long Island and the Lower Hudson Valley are the

state’s most affluent regions, measured by property

wealth or resident income per pupil. Superinten-

dents in those regions were less likely to anticipate

negative consequences from 2012-13 school budgets

than their colleagues in other regions. Yet Central

New York is one of the poorest regions and its

superintendents were also more optimistic on

average than colleagues elsewhere.

Superintendents in the North Country, Western

New York, and the Mohawk Valley were more likely

to foresee negative impacts from their district

budgets. Seventy-four percent of North Country

superintendents believe extra help for students who

need it will be negatively affected by their school

budget, the highest negative share for any service in

any region.

Once again, “you can’t cut what you don’t have” –

or what you have only in minimal quantity. This may

explain the low negative impact anticipated for

advanced classes in the Southern Tier, or art and

music in the North Country.

Total City Rural SuburbCore instruction in elementary grades

41% 33% 43% 39%

Instruction in English, math, science, and social studies in the middle level grades

33% 33% 36% 29%

Instruction in English, math, science, and social studies in high school

37% 40% 42% 28%

Extra help for students who need it -- any level

48% 73% 52% 37%

Instruction in art -- any level 27% 23% 27% 26%

Student transportation 33% 57% 34% 27%

Advanced or enrichment classes 35% 50% 39% 28%

Special education 20% 14% 23% 15%

Athletics 44% 43% 47% 40%

Other extracurricular activities 48% 62% 53% 39%

Instruction in music -- any level 26% 23% 32% 19%

Other student services 34% 15% 39% 31%

Operations and maintenance 49% 80% 48% 46%

Administration 46% 69% 40% 49%

Other district operations and services

43% 57% 43% 43%

Percentage of superintendents anticipating some or severe negative impact from 2012-13 budget decisions on various school operations -- by district type:


20

In their own words: Budgeting Choices…

We were forced to take drastic budget measures in the 2010-2011 school year. During that year, we reduced our staff (all areas) by 10%+. We continue to operate at a skeleton level of services for our students. As a rural school district, we already offer a many fewer program-matic opportunities than our wealthier colleagues. Any further reductions in programs and/or services would severely limit the educational prospects of our students. ~ Upstate rural superintendent

We have been routinely reducing administration (25% over three years) and were forced to go deeper at central office this year to avoid further reductions in the buildings. Set minimum class sizes at HS and allowed class sized to be larger than previous years in acceler-ated and advanced courses. Reduced the heck out of O and M [operations and maintenenance]. Outsourced leadership for O and M. ~ Upstate suburban superintendent

Because of the reduction in administration at the central office level a few years ago, we are all doing more with fewer personnel, including sharing secretaries. We have not had much impact on serving our AIS students be-cause the board has been adamant re no cuts. We also support kids via federal grants. Our class sizes in HS and MS are nearing 30 so we could have smaller class sizes in the elementary grades, i.e., 22-24/class. We have cut all the non-instructional we can. We really don't know where we can cut yet again, it will be the fifth year in a row. ~ Downstate suburban superintendent

We had little to cut since major cuts were undertaken before the 2010-11 school year. ~ Upstate rural superintendent

We are struggling with the reductions to this point but will make it through the year. However, without support from the state even for low need schools we will be forced to continue to challenge the cap or eviscerate program components as operational components can no longer be cut and maintain the district operations. ~ Upstate suburban superintendent

The lack of cuts to administration is not because of excess administrators, it is because we have one Principal in the elementary school, a middle school Principal that is also the CSE (committee on special education) chair and one HS Principal. There are no other central office administrators besides the

superintendent, so there is no place to cut. With the increased requirements under 3012-c (teacher/ principal evaluations), it will be difficult at best to complete the new requirements. ~ Upstate suburban superintendent

Because of the massive layoffs required to pass the 2011-12 budget, the board decided to exceed the tax levy limit in our first budget vote. We did not pass. We reduced to the tax levy limit, and passed on the second vote. The entire process was contentious funding reduc-tions and somewhat divisive. We need some sort of "consideration" from our teachers unit, but have yet to receive it. This is harming our ability to gain community support for our budget. As a superintendent, my salary has been frozen for the fourth year, I am paying more for my health insurance, I have a smaller administra-tive team with which to work, and I am having a hard time keeping people motivated and positive – partic-ularly given the rapid pace of change in regulations from NYSED. As a small rural district, we do not have the capacity that other districts do, and our effectiveness is slowly being eroded as a result of funding reductions. ~ Upstate rural superintendent

In my opinion we are out of magic. We have eliminated over 51 positions through attrition over the past three years. We have closed 2 schools. We have doubled our appropriated fund balance and will be under the 4% allowable amount. We have squeezed all that can be squeezed. We do not spend anywhere what we need for technology. We are postponing capital projects. We have kept spending under 1% and the levy increase under 2% for each of the three past years. My salary has been frozen twice and the administrators have made serious concessions. However, CSEA and NYSUT employee costs ---and they are 90% of our work force---continue to increase well in excess of 2% per year. ~ Upstate rural superintendent

We are experiencing an increase in enrollment but are constrained in the addition of teaching and student sup-port positions because of the tax cap and the current economic situation. Our classes and our programs are at capacity and I am really concerned because my honest assessment is that we are stretching people and programs too far. ~ Upstate suburban superintendent


21

Adapting to the tax levy cap Districts developed and adopted their budgets

under the state’s new property tax levy cap law for the

first time this past spring.

Actual proposed budget figures and our survey

responses point to the same conclusion: the cap led

districts to propose lower spending and tax increases

than would have occurred under the old rules.

In the first round of voting, districts proposed

budgets with spending increases averaging 1.7

percent and tax increases averaging 2.2 percent.

Budget vote day brought the second highest known

approval rate – 96.5 percent12, including 99 percent

of districts proposing increases within their levy limit.

Almost two-thirds of the districts attempting to

over-ride their levy limit were successful in obtaining

the 60 percent of voters needed for approval.

Ultimately, only two districts were required to

adopt a contingency budget, with no increase in tax

levy over the prior year, as required by the new law.

Assessing the impact

For the state as a whole, 67 percent of

superintendents said that the tax levy cap had led

their districts to adopt budgets with spending levels

below what would have been done without the cap.

Included in that share were 17 percent of

superintendents who described their districts’

adopted spending level as significantly lower.

Asked to appraise how the tax levy cap affected

programs and services, 60 percent said it caused their

adopted budget to have either a somewhat more

negative impact (50 percent), or significantly more

negative impact (10 percent) than would have

occurred without the cap.

Impact by region Looking at the perceived impact of the tax levy cap

by region, it is hard to identify patterns. With some

reflection, however, it becomes apparent that there

are multiple considerations which might interact to

affect how the cap would influence budget impact.

12 The highest pass rate was 97.3 percent in 2009; the State Education Department has figures going back to 1969.

Poorer districts tend to be more heavily

dependent on state aid for two reasons. First, state

aid does have progressive elements which direct

greater revenue per pupil to poorer districts. Second,

they have less property wealth to tax – with identical

tax rates, a poor district will raise less local revenue

than a wealthy district.

So local taxes typically comprise a larger share of

total revenues for wealthy districts, suggesting they

would be more likely to ascribe budget impacts to the

tax levy cap. But even with a tax increase within the

levy limit, a wealthier district will raise more revenue

than a poor district levying at the same rate.

Further, rich or poor, local political considerations

also affect judgments about how large a tax increase

taxpayers might support. Last, while exemptions

from the cap might allow districts a higher tax levy

limit, many local leaders ruled out seeking increases

greater than 2 percent, believing their voters would

apply that widely cited number as a benchmark.

Among regions, superintendents in the Lower

Hudson Valley, with the greatest property wealth per

pupil, ascribed the least impact on spending levels to

the cap. Perhaps their ability to raise relatively

larger sums at any given tax rate cushioned the

impact of the tax levy cap.

On the other hand, the North Country, with many

low wealth districts, had a high rate of perceived

impact on spending. This may reflect the limited

sums many of these districts can raise at any tax rate.

There were similar results for these two regions on

the questions about how the tax levy cap affected

programs and services.

0% 20% 40% 60% 80% 100%

TotalLong Island

Lower Hudson ValleyMid-Hudson Valley

Capital RegionMohawk Valley

Central New York North Country Southern Tier Finger Lakes

Western New York

Impact of tax cap on budgeted spending levels

Somewhat lower Significantly lower


22

0% 20% 40% 60% 80% 100%

TotalLong Island

Lower Hudson ValleyMid-Hudson Valley

Capital RegionMohawk Valley

Central New York North Country Southern Tier Finger Lakes

Western New York

Impact of tax cap on programs and services

Somewhat negative Significantly negative

Though often cited as a model, Massachusetts’s

tax levy cap is more generous to local governments

and schools than New York’s version. Massachusetts

communities may increase their tax levy by up to 2.5

percent without seeking voter approval, and may

over-ride that cap with a simple majority of voters.

New York’s law forbids schools any increase in tax

levy without approval by at least a simple majority of

voters, and requires 60 percent of voters to over-ride.

Yet although Massachusetts’s law is more

favorable to local governments, one study13 concluded

it had more adversely affected poor communities –

they were less likely to attempt over-rides and less

likely to succeed when they did try. THE COUNCIL’s

analysis of past school district budget votes suggests

similar risks – high need small city and suburban

districts seem likely to have the greatest difficulty

winning over-ride votes. But with so few unsuc-

cessful votes this year, it is not yet possible to draw

reliable conclusions about future over-ride prospects.

As a group, high need rural districts proposed the

lowest tax increases, made the least use of exemp-

tions, and were least likely to attempt over-rides.

13 "Hidden consequences: Lessons from Massachusetts for states considering a property tax cap." Center on Budget and Policy Priorities, 25 May 2010. Web. 27 Sept. 2012.

Tax levy cap impact on collective bargaining

Some tax levy cap proponents described it as a

“blunt instrument” which would force state officials

to get serious about enacting mandate relief, and

compel local leaders to manage more efficiently and

negotiate more aggressively with employee unions.

Our survey asked superintendents for their

impression of how the tax levy cap might affect

collective bargaining with their local teacher union.

We singled out teacher unions and did not inquire

about other employee categories in order to limit the

overall length of the survey, and because teacher

compensation is the largest expense in virtually every

district budget.

Statewide, 59 percent of superintendents said that

they thought that the tax levy cap increased the

likelihood that their district would be able to

negotiate a cost saving concession with their teacher

union, or that it had already contributed to achieving

savings. Thirty-one percent thought the cap would

not affect the prospects for negotiating cost savings,

while 10 percent said doing so was not a priority. A

superintendent might give the latter answer if the

district had previously negotiated savings, or if it is

believed that its teacher compensation is not

competitive.

In response to our invitation for open-ended

comments, a couple superintendents said that the tax

cap had had a negative impact on bargaining

prospects.

2012-13 Tax levy decisions by SED Need/Resource Category

Need/Resource Capacity CategoryProposed

Tax Increase

Proposed Tax Levy as % of

Levy Limit

% Attempting Tax Cap

Over-Rides

High Need Small Cities and Suburbs 2.2% 99.4% 6.5%

High Need Rural 1.8% 97.9% 5.8%

Average Need 2.1% 99.4% 8.6%

Low Need 2.4% 99.7% 7.5%

TOTAL STATE 2.2% 99.4% 7.6%

SOURCE: Council analysis of NYSED Property Tax Report Card and budget vote data

31%

10%

40%

5%

15%

0% 10% 20% 30% 40% 50%

No impact

Negotiating savings not a priority now

Somewhat more likely

Significantly more likely

Already contributed to negotiating savings

Perceived impact of tax cap on chances of negotiating cost-savings

with teacher union


23

In their own words: Contemplating the Tax Cap…

We may be able to go on for three more years only without additional funding. A two percent increase yearly only nets us a little over 40 thousand dollars. ~ Upstate rural superintendent

The impact of the tax cap was softened this year by the savings from a significant number of teacher retire-ments in response to an incentive. We expect to face an ongoing imbalance in expenses vs. revenue after this year. ~ Upstate suburban superintendent

Significant fund balance and reserves were used to get to the 2% tax levy increase. We chose to stay at 2% even though our allowable increase was 3.8%. The feedback we were getting was that anything over 2% wouldn't pass due to the large amount of publicity of the 2% and misunderstandings around this idea. ~ Upstate city superintendent

The tax cap has achieved its intended result - which was to curtail the salaries and benefits to employees. Long term consequences of this have yet to be determined. Class sizes are "creeping up" - while still manageable, may be a problem within two or three years ~ Downstate suburban superintendent

Poor rural districts could never balance a budget or make up for lost state aid through an increase of the local tax levy. We have been near or under 2% for years. ~ Upstate rural superintendent

Community assumption - no more than 2% tax levy increase. We feared a defeated budget if we raised it to our limit, about 8%. ~ Upstate rural superintendent

This year, the tax cap was near our traditional offering to the public. At $33,000 per 1% of the levy, the tax cap has minimal impact with a passed budget under the cap level. We do have concerns if a budget goes to contingency... ~ Upstate rural superintendent

We are entering a second year without a teachers' and administrators' contact and the tax cap is not recognized at the table as a concern on their part. ~ Downstate suburban superintendent Our teachers union does not want to hear anything about the tax levy limit- they believe that either we

should crumble, or utilize every last cent of reserves before they should be asked to give anything back. ~ Upstate rural superintendent

It is difficult to compare options under the tax cap when you raise less that $15, 000 with 1% increase on the tax levy. We share multiple services and have tried to consolidate every way possible. Districts needs a choice beyond the concept of a merger. The Regional High School (if done right) could give multiple new opportunities for kids as well as a positive choice for communities. ~ Upstate rural superintendent

The cap may not assist in negotiations when the contracts are governed by Triborough. Most situations will guarantee large raises and maintain benefits under Triborough and there is really no impetus to move if Triborough gives you a great deal to maintain the status quo. Luckily not all districts have to deal with a militant unit and can reach some type of a solution that can benefit all. ~ Upstate suburban superintendent Our tax levy was under 2% for the three years before the tax cap so significant cuts were already made. The cap will leverage some short term advantages in bargaining with this 3-year trend that preceded it - but this is all short term. It will come back to haunt us and everyone unless other mandates are removed and the state gets its priorities straight. ~ Downstate suburban superintendent

Our district raises about $76,000 per 1% increase in the tax levy, making foundation aid the critical element in our budgeting process. ~ Upstate rural superintendent

We completed contract negotiations with the teachers last spring. The tax cap contributed to the discussion but was not the sole reason we successfully controlled costs through negotiations. ~ Downstate suburban superintendent

The Gov has touted Massachusetts for its "workable" tax cap. We need to make sure that people know that NYS has not matched the same levels of funding that MA did. There is a lot of misinformation and our politicians have not helped. ~ Upstate rural superintendent


24

Implementing evaluation reforms In the 2011 survey, we posed two questions

regarding “Race to the Top” (RTTT) – the Obama

Administration’s education reform initiative which

promises New York State nearly $700 million over

four years to support systemic improvements in

standards, assessments, data systems, teacher and

leader quality, and low-performing school

interventions.

In 2011, 91 percent of superintendents said that

the costs of implementing RTTT activities would

significantly exceed the amount of aid their district

would receive through that federal grant. The

average basic grant to school districts outside the “Big

5” cities is estimated to be around $100,000 – to be

paid over four years.

In the other RTTT question a year ago, 81 percent

of superintendents agreed with the statement that

cost considerations will prevent their districts from

implementing new teacher and principal evaluation

requirements in a manner that would best serve

students.

This year we chose to focus on one dimension of

the Race to the Top agenda – the efforts to imple-

ment changes in teacher and principal evaluation

practices, as required under state legislation enacted

in 2010 and revised in 2012. Some district leaders

have referred to the initiative as “the mother of all

unfunded mandates.”

Anticipated cost impact Statewide, 98 percent of superintendents said

compliance with the new “Annual Professional

Performance Review” (APPR) requirements will cost

their districts more than what it would have

traditionally spent on evaluations – the highest

statewide response percentage of any question in our

survey. An overwhelming majority (70 percent) of

superintendents offered that the new APPR

requirements will significantly increase evaluation

costs in their districts compared to what was spent

under prior practices.

This mandate complicates school finances across

the state, no matter region. Mid-Hudson Valley

districts anticipate the greatest fiscal impact from the

new APPR: 93 percent of the region’s superintend-

dents said complying with the new APPR law would

significantly increase spending while the remaining 7

percent said compliance would somewhat increase

spending. Lower Hudson Valley superintendents

were least negative in appraising cost impact, with 56

percent concluding the new requirements would

significantly increase costs. Nonetheless, every

superintendent in that region anticipated some

additional cost impact.

70%

28%

2%

0%

0% 20% 40% 60% 80%

Significantly increase spending

Somewhat increase spending

No signicant effect

Reduce spending

To what extent did complying with the new APPR requirements require your district to increase what it

expects to spend on teacher and principal evaluationbeyond what it would have traditionally spent?

70%

68%

56%

93%

67%

67%

63%

79%

65%

76%

64%

28%

29%

44%

7%

30%

33%

38%

14%

35%

24%

30%

0% 20% 40% 60% 80% 100%

Total

Long Island

Lower Hudson Valley

Mid-Hudson Valley

Capital Region

Mohawk Valley

Central New York

North Country

Southern Tier

Finger Lakes

Western New York

Cost impact of new teacher evaluation requirements

Significant increase above past cost Somewhat increase above past cost


25

Only a few districts statewide stated that

compliance with APPR would not significantly affect

costs over what has traditionally been spent on

teacher and principal evaluation. The overwhelming

majority of districts who indicated APPR would not

significantly affect costs are small, with less than 500

students.

It might fairly be asked why, if schools have been

evaluating teachers and principals all along, would

new requirements impose added costs? So we asked

superintendents what they identify as the largest cost

drivers within the new evaluation mandate.

Professional development for teachers and

principals were listed as the first and second largest

new cost components, followed by new student

assessment costs.

By better than a two-to-one margin over any

other item, superintendents picked teacher

profession development as the single largest cost-

driver, and 74 percent of superintendents chose it as

one of the top three cost drivers. Professional

development for principals and other administrators

followed, with 65 percent of superintendents

identifying it as one of the top three cost drivers.

There has been considerable debate about new

student assessment demands required by APPR, both

on budgets for school districts, and instructional time

for students.14 Purchasing of tests from vendors was

listed as the third largest cost driver for APPR,

followed closely by development of additional student

assessments by district staff.

14 The new procedures require that 20 percent of

an evaluation be based on student growth on state assessments, and 20 percent on locally assessed measures of student performance, with the percentages shifting to 25 percent state/15 percent local once the Board of Regents approves a value added measure. For teachers in subjects not covered by state assessments, districts are required to develop “Student Learning Objectives” which will commonly require pre- and post-instruction tests to determine student growth.

Demands on administration

Administrative expenditures by school districts

are often a popular target. But policymakers depend

on school administrators to ensure that all the

mandates they impose are faithfully executed. At the

same time, our survey shows that administrative

positions have been cut more steeply than teaching

jobs across the state. We estimate that over the past

two years districts have eliminated an average of 12

percent of their administrator positions. Not

surprisingly then, many district leaders are alarmed

by the challenges they foresee in administering the

new APPR mandate.

Statewide, 73 percent of superintendents

estimate that more than 30 percent of their

principals’ or other administrators’ time will be spent

conducting teacher evaluations in accord with the

new mandate. Within that total, more than 40

percent predict completing teacher evaluations will

consume over 40 percent of an administrator’s time.

Some superintendents caution that devoting 40

percent of the work week to evaluations (for example)

may be appropriate, but questions arise over how

time is spent. Do districts have adequate capacity to

do evaluations well and meet other administrative

demands? Can they strike a good balance between

complying with evaluation protocols for every teacher

and focusing on those who need the most attention to

be successful?

Rank 1 Rank 2 Rank 3 Weighted

Score

1. Professional development for teachers 86 58 38 412

2.Professional development for principals and other administrators 40 79 42 320

3.Purchase of additional student assessments from vendors 51 37 26 253

4.Development of additional student assessments by district staff 27 28 62 199

5.

Paying current staff for additional time needed to implement APPR (for purposes other than development of additional student assessments) 18 20 39 133

6.Purchase of other materials (not student assessments) from vendors 11 14 11 72

7 Additional staffing 9 4 7 42

8. Consultant costs 3 6 15 36

9. Other costs 2 1 7 15

Looking at the list below, what do you believe will be the largest components of any additional costs for your district in implementing the new APPR requirements? Please rank the top 3 items.


26

Administrative time spent on APPR evaluations

varies by district type. Superintendents from city

school districts foresee the greatest administrative

demands from APPR evaluations: 73 percent of city

superintendents indicate more than 40 percent of

their principals’ time will be spent on APPR

compared to 24 percent of suburban superintendents.

By region, administrative time spent on teacher

evaluation is slightly varied. But again the

overwhelming majority of all regions seem to indicate

that more than at least 30 percent of a principal’s

time will be spent on complying with the new APPR

requirements. Superintendents, educators and

parents have often voiced their concern the time

principals will be spending on complying with APPR

will remove them from their needed instructional role

in school buildings. These survey results seem to echo

this sentiment.

With the advent of state-imposed limits on the

two major revenue sources for schools – property

taxes and School Aid – new state-imposed costs

almost inevitably require reductions in other school

functions. This is true for the new teacher and

principal evaluation mandates. Some of the

monetary costs they require are transitional, and will

diminish as new procedures become established. But

there is no reason to anticipate any appreciable

diminution in the pressures they impose on school

administration. Principals now will also be called

upon to play pivotal roles in carrying out new state

mandates to thwart bullying and cyber-bullying.

0%

8%

19%

32%

41%

0% 10% 20% 30% 40% 50%

Under 10%

More than 10%, up to 20%



More than 40%

Approximately what percentage of a typical principal or other administrator's timedo you anticipate will be spent on conducting teacher evaluations in compliance with the new

APPR requirements?

19%

13%

26%

15%

32%

7%

38%

30%

41%

73%

24%

49%

0% 20% 40% 60% 80% 100%

Total

City

Suburb

Rural

Shares of districts projecting principals will need to spend more than 20% of their time on teacher evaluations -- by region

More than 20%, up to 30% More than 30%, up to 40% More than 40%

19%

32%

29%

7%

7%

13%

19%

25%

13%

21%

12%

32%

37%

41%

20%

41%

13%

13%

32%

25%

32%

42%

41%

18%

18%

47%

48%

60%

56%

43%

54%

41%

45%

0% 20% 40% 60% 80% 100%

Total

Long Island

Lower Hudson Valley

Mid-Hudson Valley

Capital Region

Mohawk Valley

Central New York

North Country

Southern Tier

Finger Lakes

Western New York

Shares of districts projecting principals will need to spend more than 20% of their time on teacher evaluations -- by region

More than 20%, up to 30% More than 30%, up to 40% More than 40%


27

In their own words: Evaluation Mandate…

The APPR has been the largest unfunded mandate and has had the most impact to my budget since I became Superintendent 7 years ago. ~ Upstate rural superintendent

This new APPR which would otherwise be a positive thing for schools, has turned into a fiasco between the time it has taken to negotiate new terms and conditions regarding its implementation and the cost of the implementation. All of these issues have had a negative impact on the annual budget because we have continually gone back to the BOE for approval of things which were not budgeted for initially in order to deal with the implementation of the new APPR. ~ Downstate suburban superintendent

Impossible to properly implement APPR due to limited number of administrators - Too many other administrative demands already exist, not enough time - the current 60 hour week for administrators can't be expanded. To conduct APPR properly, more administrative positions are needed, yet the community can't support such. It is humanly impossible. ~ Upstate city superintendent

We continue to cut administrative positions each year as we add on more and more daily responsibilities. While evaluation and student management should always be top priorities, there is a limit to what a person can accomplish in any given day … The cost to meet the SED standards is significant as we will now be required to purchase outside vendor products for evaluation. Our former model was clinical, research based, and fair. I do not believe the new expensive system will change our decisions in regard to what employees are terminated due to poor performance. ~ Upstate suburban superintendent

I think that principals must be instructional leaders. I agree their time should be spent IN classrooms. What has not been taken into consideration are the management duties for principals. If principals are in classrooms, who manages the building? Who deals with all of the parent issues? Student issues? Approval of purchase requisitions... the list goes on and on … ~ Upstate rural superintendent

The new APPR, as negotiated in my district, requires me to be available for appeals. As a result, I cannot do any formal observation of teachers. This results in my principal taking the full burden. I normally observe 25-33% of the staff annually. ~ Upstate rural superintendent

Once again, capacity and scale impact our ability to do this work. We developed a quality APPR plan, but are currently at impasse with teachers, as they will not settle without a salary agreement. Even with what was quality work, there are improvements that need to be made in our evaluative approach and process, that will not be made for some period of time, because of all of the other items that are taking the time and attention of the administrators. ~ Upstate rural superintendent

I have no idea how our principals are going to be able to sustain themselves working under these conditions. They were worked to exhaustion prior to these changes, now between APPR and the Dignity Act, I truly have no idea how this work will get done. Hiring "help" is not an option. ~ Upstate rural superintendent

The entire APPR process is misguided. It is costing the district enormous amounts of resources in time, money, and personnel. The emphasis on testing is taking away from precious classroom instructional time. The emphasis on training for lead evaluators and multiple formal classroom evaluations as well as summative evaluations will severely and negatively affect the ability of admin-istrators in all districts who "wear numerous hats" to be effective administrators in other areas of their job per-formance (discipline, leading curriculum development/ implementation, budgeting, hiring/firing, etc.). Ill-conceived from start to finish. ~ Upstate rural superintendent

It is going to take more effort and time for administration to properly evaluate staff. I know that the current configuration of administration will not be able to keep up with the new APPR particularly the implementation of TIPs if done properly. More staff is needed, but the community will not support it because they value lower class sizes over anything else in the budget. ~ Downstate suburban superintendent


28

Looking ahead Our survey concluded by asking superintendents

to think ahead – to estimate how much spending

would need to increase to cover baseline costs, to

gauge which might have greater significance for their

districts – the tax levy cap or future state aid levels, to

cite priorities for mandate relief, and to say what they

would prioritize if new revenue became available for

their districts.

Anticipated cost pressures In the recent past, it been common to hear school

district leaders warn that their district’s spending

would increase by 4 or 5 percent or more under a

“roll-over budget” – a budget continuing existing

service levels while adjusting projected expenses to

reflect foreseeable changes in costs, such as

negotiated salary increases. THE COUNCIL has

estimated that pension and health insurance costs

alone would have driven up overall spending by 2.5

percent in each of the two years prior to this, even if

all other costs could have been frozen.

Yet over the past four years, the school budgets

actually proposed to their voters would have raised

spending by an average of less than 2 percent per

year. Superintendents and boards cut from baseline

spending levels in order to hold down tax increases

while accommodating austerity in state funding and

surges in employee benefit costs.

In both the 2011 and 2012 surveys, we asked

superintendents to

estimate the approximate percentage change in

your district's spending if it adopted a budget

maintaining current services, given collective

bargaining agreements, enrollment changes,

and other cost considerations.

Comparing results from the two years suggests

slowing of baseline spending growth for schools.

In 2011, 56 percent of superintendents said their

district budget for the following year would need to

rise by more than 3 percent in order to accommodate

foreseeable costs. In the 2012 survey, that share has

fallen to 40 percent.

But there is reason to suspect that these expend-

iture projections may be optimistic. This month –

after the survey was conducted – the State Teachers

Retirement System projected a much larger increase

in its employer contribution rate for 2013-14 than

districts had to absorb in their current year budgets.

The rate increased by 0.73 percentage points for

2012-13 school budgets (from 11.11 to 11.84 percent).

But for 2013-14, TRS estimates the rate will need to

rise at least by at least 3.6 percentage points, to

between 15.5 and 16.5 percent. District contributions

are determined by multiplying this rate by the payroll

for employees in TRS. So the new projected rates

will require districts to absorb a cost equivalent to

giving the covered employees raises of at least 3.6

percent, and perhaps as much as 4.6 percent.

2012-13 2013-14Spending would be reduced below 2011-12 level 11% 2%There would be no change or almost no change in spending 4% 7%

Spending would increase by up to 1% 3% 4%Spending would increase by more than 1%,up to 2% 9% 18%Spending would increase by more than 2%, up to 3% 13% 24%

Spending would increase by more than 3%, up to 4% 25% 20%Spending would increase by more than 4%, up to 5% 17% 12%Spending would increase by more than 5%, up to 7% 11% 7%Spending would increase by more than 7%, up to 10% 5% 3%

Spending would increase by more than 10% 2% 2%

Percent of districts

Looking ahead to next year , please estimate the approximate percentage change in your district's spending if it adopted a budget maintaining current services, given collective bargaining agreements, enrollment changes, and other cost considerations.


29

Tax Levy Cap or State Aid – which is of greater

concern? One of the most striking findings in the survey is a

sharp increase in the importance attached to state aid

as a revenue source for schools.

Both last year and this year we asked superintend-

dents,

Thinking about the future financial prospects of

your school district, which is of greater concern

to you – the property tax cap or possible future

state aid levels?

This year’s results show a 19 percent jump in the

percentage of superintendents citing state aid as the

greater concern.

As with the 2011 survey, the question yielded

divergent reactions across regions, with poorer, more

state aid dependent areas more likely to cite state aid

as the greater concern in both years. Nonetheless,

the 2012 survey shows superintendents across all

regions assigning greater priority to state aid.

For example, in the Lower Hudson Valley, the

percentage of superintendents citing state aid as the

greater concern for their districts moved slightly,

from 5 percent to 11 percent. But the share

identifying state aid and the tax cap as of equal

concern soared, from 30 percent to 67 percent.

In contrast, across the poorer Upstate regions

away from the Hudson River, only 5 percent of

superintendents now cite the tax levy cap as the

greater fiscal concern for their districts.

A year ago we observed that “some districts were

capped by circumstances before they were capped by

law”– they simply could not ask their taxpayers for

local tax increases great enough to offset cuts in state

aid, surges in employee benefit costs, or both.

According to data filed in “property tax report

cards” last spring, 20 percent of the state’s school

districts would raise less than $50,000 through a 1

percent tax increase. Obviously, some of these

districts are very small. But even a small district will

need to spend $50,000 or more to pay salary and

benefits to retain a single professional position.

Among superintendents foreseeing the possibility

of financial insolvency within two years, 71 percent

identified possible state aid levels as the greatest

revenue concern, compared to 44 percent for all

superintendents.

7.63%6.19%

8.62%

11.11% 11.84% 15.50%

16.50%

0%2%4%6%8%

10%12%14%16%18%

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

School fiscal year

Employer Contribution Rate for Teachers Retirement System

Actual contribution rates Projected range for 2013-14

SOURCE: Compiled by Council from NYS TRS Administrative BulletinsSOURCE: Compiled by Council from NYS TRS Administrative Bulletins

25%

13%

52%

43%

23%

44%

0% 20% 40% 60% 80% 100%

2011

2012

Thinking about the future financial prospects of your district, which is of greater concern to you -- the property tax cap, or possible future state aid levels?

Tax Cap Equal Concern State Aid

49%

49%

44%

38%

9%

33%

43%

44%

41%

64%

18%

8%

13%

21%

27%

0% 50% 100%

Insolvency within 2 years

Between 2 and 4 years

At some point beyond 4 years

Do not foresee a time when my district would not meet obligations

Unsure

When superintendents foresee insolvency and what is the greatest revenue concern for their district

Possible state aid levels Roughly equal concern Property tax cap


30

These results should not be interpreted to suggest

that after one year with the tax levy cap, school

leaders have concluded it’s not so bad. More

probably, superintendents see the tax levy cap as a

fact of life, unlikely to be lifted or amended in the

near-term. Therefore, they now attach more

importance to securing additional help for their

schools through state aid.

In last year’s report we observed,

…even if the property tax cap is the greater

concern for a district, greater state aid is a way

to address that concern. By reducing access to

local revenues, the tax cap has the potential to

raise the stakes in competition for state aid.

Just one year of experience with the tax cap seems

to have brought that dynamic into sharper focus.

Priorities for Mandate Relief In the debates over whether to enact the tax levy

cap, we said THE COUNCIL’s position could be

expressed in just 10 words: A tax cap will hurt

schools. There are better options.

As examples of “better options,” we urged state

leaders to repeal or amend mandates so that schools

could control costs and gain more impact from their

spending. We also said the state needed to become a

more reliable partner in supporting public education

through School Aid.

Now that the tax levy cap is in place, the need for

action to deliver both forms of state help is more

urgent.

This year’s survey includes a new question, asking

superintendents to choose from 25 options and

identify their top five priorities for actions the state

could take to help schools reduce or control costs or

gain more impact from their spending.

Three priorities stand out in the results.

Amending the Triborough Law, setting mandatory

minimum employee and retiree contributions for

health insurance, and stopping new unfunded

mandates were chosen among top five priorities by

more than half the superintendents responding to the

survey. No other option received support from more

than a third of superintendents.

Triborough: Under the Triborough law,

provisions of an expired collective bargaining

agreement remain in force until a successor

agreement is negotiated, including step increments

which provide salary increases for an additional year

of service. Seventy-three percent of superintendents

picked amending Triborough to eliminate automatic

step increases under an expired contract as one of

their top five priorities and 43 percent picked it as

their number one priority.

Superintendents believe Triborough removes

incentives for unions to settle contracts since

negotiated benefits remain in place and most

members continue to receive raises. THE COUNCIL

advocates eliminating the guarantee of step increases

but leaving benefit protections in place when a

collective bargaining agreement expires.15

15 For the record, if a superintendent’s contract expires and is not renewed, he or she will be out of a job.

RegionProperty Tax Cap

Equal Concern State Aid

2011 25% 52% 23%

2012 13% 43% 44%

2011 49% 44% 7%

2012 44% 46% 10%

2011 65% 30% 5%

2012 22% 67% 11%

2011 25% 50% 25%

2012 13% 53% 33%

2011 21% 64% 14%

2012 12% 46% 42%

2011 21% 47% 32%

2012 0% 36% 64%

2011 8% 58% 33%

2012 0% 38% 63%

2011 17% 60% 23%

2012 7% 46% 46%

2011 12% 69% 19%

2012 4% 38% 58%

2011 17% 50% 33%

2012 6% 26% 68%

2011 19% 39% 42%

2012 9% 39% 52%

Total

Long Island

Lower Hudson Valley

Mid-Hudson Valley

Western New York

Thinking about the future financial prospects of your district, which is of greater concern to you -- the property tax cap, or possible future state aid levels?

Capital Region

Mohawk Valley

Central New York

North Country

Southern Tier

Finger Lakes


31

Options 1 2 3 4 51 Amend the Triborough law to eliminate

automatic salary increments if a collective bargaining agreement has expired

107 30 20 9 14 747 73%

2 Establish mandatory minimum employee and retiree contributions for health insurance

48 69 20 13 7 609 64%

3 No new unfunded mandates 30 22 22 19 43 385 55%4 Reduce the role of seniority in layoff

decisions (i.e., modify "last in, first out")

9 27 19 17 12 256 34%

5 Require all public employees in a region to belong to a single health insurance program

11 22 20 3 3 212 24%

6 Authorize the State Education Department to order school district mergers, without voter approval, based on considerations including local financial capacity and inability to maintain comprehensive educational services, following a review with local input

9 5 15 10 9 139 20%

7 Revise middle school requirements 3 5 11 18 13 117 20%8 Authorize regional high schools to

serve students from multiple school districts

6 8 10 8 5 113 15%

9 Other change in health insurance 2 6 14 8 8 100 15%10 Revise special education class size

requirements4 3 12 10 11 99 16%

11 Streamline procedures for tenured teacher hearings ("3020a reform")

1 6 12 12 8 97 16%

12 Reduce reliance on "seat time" requirements in high school by allowing students to earn credit by demonstrating proficiency in a subject instead

0 7 6 13 21 93 19%

13 Other special education changes 2 3 11 12 13 92 17%14 Other state actions to help schools

reduce or control costs or gain more impact from spending

5 4 3 10 14 84 15%

15 Expand opportunities for districts to share sertvices through BOCES

2 6 4 13 11 83 15%

16 Revise due process procedures for resolving special education disputes between districts and parents

1 5 9 9 7 77 13%

17 Revise evaluation requirements for making special education placements

1 5 6 10 6 69 11%

18 Reduce mileage limits for mandated transportation of nonpublic school students

2 2 11 6 4 67 10%

18 Amend the ""Wicks law" to reduce or eliminate the requirements to use multiple prime contractors in construction

0 3 7 11 12 67 13%

20 Align teacher certification and tenure areas

2 0 3 6 3 34 6%

21 Streamline procedures for voluntary school district consolidation while retaining a requirement for local voter approval

1 2 1 7 2 32 5%

21 Require districts to collaborate in providing out of district pupil transportation

0 2 2 6 6 32 7%

23 Revise requirements for Academic Intervention Services

0 1 3 6 6 31 7%

24 Expand opportunities for students to satisfy graduation requirements through career and technical education (CTE) options

0 1 3 5 6 29 6%

25 Require districts below a minimum size to share some administrative functions

0 2 2 4 1 23 4%

% Citing as a Prioriity

Looking at the list below, what would be your top five priorities for actions the state could take to help your district reduce or control costs, or gain more impact from its spending?

Rank WeightedScore

Although the specified change to Triborough

would affect only salaries and would come into play

only as a union contract reaches or nears expiration,

it would be a pivotal reform, creating greater balance

in collective bargaining and giving districts greater

capacity to gain changes across the full range of

issues subject to negotiation.

Health Insurance: Establishing mandatory

minimum contributions toward health insurance by

employees and retirees was the second leading

mandate relief priority, chosen by 64 percent of

superintendents as one of their top five options. As

part of the Let New York Work coalition, THE

COUNCIL has supported capping employer

contributions so employees pay at least 15 percent for

individual coverage and 25 percent for family

coverage.

This change would reduce costs for districts now

paying a larger share of health insurance costs. It

would have broader effects as well: if union members

must pay a higher share of costs, they may become

more receptive to changes in plans which would

lower total costs.

But requiring greater employee and retiree

contributions toward premiums would not directly

address the most fundamental issues with health

insurance – that its cost is too great and is growing

too fast. Another option offered in the survey is to

require all public employees in a region to belong to a

single health insurance plan, presuming that larger

coverage pools would ultimately result in lower costs

for both employers and employees. This option was

the fifth most favored priority.

Past surveys by THE COUNCIL have found districts

moving to join health insurance consortia. But an

impediment to maximizing the potential of this

strategy is that health insurance benefits typically are

collectively bargained and those contracts expire at

different times. A state requirement would advance

implementation of the strategy.

Unfunded mandates: 55 percent of

superintendents chose “no new unfunded mandates”

as one of their top five priorities. As one example

noted above, there is widespread frustration over the


32

cost of the new teacher and principal evaluation

procedures required by the state.

THE COUNCIL has supported legislation to limit the

growth of unfunded mandates, for example, by

requiring three-fifths approval by both houses of the

Legislature before new ones may be adopted. There

have also been proposals to enact a prohibition by

amending the state constitution.

Although the notion is popular, it is hard to enact

into policy, in part due to the complexities of defining

what is a mandate (is Triborough a mandate?) and

establishing whether one imposes costs which are not

completely funded. Also, any law to bar new un-

funded mandates could be circumvented simply by

passing a new law. The complexities of establishing

what constitutes an “unfunded mandate” could make

a constitutional prohibition an invitation for endless

legal quagmires.

But there is one simple way state officials could

stop unfunded mandates – by pledging to neither

propose nor approve any new unfunded mandate.

Reduce the role of seniority in layoff

decisions: Under state law, when teacher layoffs

are implemented, the must be done strictly on the

basis of seniority, a policy summed up as “last in, first

out,” or LIFO. Reducing the role of seniority would

give districts latitude to retain higher performing

newer teachers. This was the fourth most popular

option, chosen as a priority by 34 percent of

responding superintendents.

School district consolidation and

regionalism: The sixth most popular cost saving/

resource optimizing option might be a surprise. As

one of their top five priorities, 20 percent of superin-

tendents would “authorize the State Education De-

partment to order school district mergers, without

voter approval, based on considerations including

local financial capacity and inability to maintain

comprehensive educational services, following a

review with local input.”

Another interpretation of this result is that 80

percent of superintendents did not choose that option

as a priority.

Nonetheless, in some regions of the state superin-

tendents see a need for their districts to join in mer-

gers and are frustrated by the process for consolid-

ation and by the common outcome – voter rejection.

Often superintendent support is motivated just

partly by financial considerations, if at all. In com-

munities which have suffered steep and steady

enrollment losses, superintendents see their districts

losing the capacity to provide students with comp-

rehensive educational opportunities, especially at the

high school level.

At the same time, promoting consolidation is not a

realistic option for the state as a comprehensive

financial survival strategy for public education.

First, assembling combinations of small, poor

districts only results in larger poor districts. Also, the

aggregate savings to taxpayers is small by definition.

Second, administrative costs comprise a very

limited portion of most school budgets – particularly

in small and poor districts – and any savings in that

function has typically been more than offset by the

cost of “leveling-up” compensation established by the

previously separate districts and their unions.

Third, some of the districts which are lowest in

wealth and smallest in enrollment are also largest in

geographic area. For example, the average North

County district serves under 1,000 students but

occupies over 170 square miles. So merging pairs of

districts in this region would necessitate transporting

some students over areas bigger than New York City

(322 square miles).

Fourth, there are other states with comparable

numbers of school districts and they do not spend at

New York’s per pupil levels (Illinois and Texas for

example). So the number of school districts oper-

ating in New York does not explain our higher costs.

Other options for regional collaboration won

support. Expanding opportunities for districts to

share services through BOCES and authorizing the

establishment of regional high schools were chosen as

priorities by 15 percent of responding superintend-

dents. These options would allow communities to

retain control over local elementary schools while


33

saving on overhead costs and enhancing the ability to

maintain more complete high school programs.

Requiring districts below a certain size to share

certain administrative functions finished last among

the offered options.

Special education: Special education is

frequently cited as a major cost-driver for schools and

an area where New York State mandates significantly

exceed what federal law requires. Four different

special education mandate relief options won support

from at least 10 percent of the superintendents.

Laws and regulations governing how these

services are determined and delivered are extremely

complex. THE COUNCIL has long called for an

independent study to recommend changes, or merely

to identify how New York diverges from common and

effective practices in other states.

Pension Reform: As explained above, pension

costs have been a major cost driver for schools. We

did not offer a pension reform proposal among the

options, however, because the bitter debate over

Governor Cuomo’s “Tier VI” proposal made it seem

unlikely that the Legislature would revisit this topic

over the near-term. However, the previously

described 3.6 to 4.6 percentage point increase in

employer contribution rates for the Teachers Retire-

ment System will rekindle interest in finding ways to

level-out cost increases.

TRS estimates that Tier VI will dramatically shift

the employer/employee shares of long-term costs.

Where the old Tier IV split costs 89 percent for

employers and 11 percent for employees, Tier VI will

divide them 49 percent/ 51 percent. But near-term

savings will be small, both because districts typically

are cutting jobs rather than rather than filling them

now, and those that are filled are done by recalling

laid-off workers who are entitled to continue in one of

the earlier, more costly tiers.

Priorities for new funding We closed our survey with a hopeful question,

asking superintendents what they would prioritize,

“…if your district were to receive an increase in

funding beyond what would be needed to fund state

mandates and your current level of services?” They

were invited to name three top priorities.

As with the 2011 survey, increasing extra help for

struggling students was the top choice, and by a wider

margin than a year ago. Reducing the local tax levy

came in second, but with 19 percent fewer

superintendents citing it as a priority, perhaps

reflecting the impact of the tax levy cap. Increasing

advanced or enrichment classes jumped three places

(from 6th to 3rd). Reducing class sizes, increasing

reserves, and expanding professional development

each moved down one place to round out the top six.

The priority attached to increasing extra help

aligns with the finding that the highest percentage of

superintendents cited it as an area negatively affected

by current year budget actions.

2011 2012

Increase extra help for struggling students 64% 66%

Reduce property tax levy 57% 38%

Increase enrichment/advanced classes 23% 37%

Reduce class sizes 30% 26%

Increase funding of reserves 29% 27%

Expand professional development 28% 28%

Increase other student support services 24% 21%Strengthen administration (district or building level) 9% 17%

Purchase technology 12% 16%

Improve maintenance 10% 8%

Purchase other instruction-related materials 10% 7%

Expand extracurricular activities or athletics 3% 5%

Other 2% 3%

Purchase other equipment 0% 2%

If your district were to receive an increase in funding beyond what would be needed to fund state mandates and your current level of services, what would be your top three priorities for the use of that funding?

% of superintendents choosing as a priority


34

In their own words: Looking Ahead…

Over the past two years we have cut almost 15% of staff. Depending primarily on TRS, ERS and health insurance we will have to cut another 5-10% of remaining staff for 2013-14. ~ Downstate suburban superintendent

At the pace we are going we will be bankrupt within three years. ~ Upstate rural superintendent

Mandated cost increases for pensions and health insurance, combined with the 2% tax cap threaten the long-term capability of our instructional programs ~ Upstate suburban superintendent

Our district is not able to offer the level of intervention services that our students need academically. We are getting by through under-spending our budget, being lean administratively and unfortunately not offering the depth of intervention serves our student s need. ~ Upstate city superintendent

The District and the community have worked together to reduce expenses for four years with budget to budget increases of 1% to 1 1/2%. Even with these continued cuts to services and programs we cannot make up the massive loss of revenue as a direct result of the GEA (Gap Elimination Adjustment). Multiple years of this state aid cutting formula has put us in a position which will now force us to cut academic programming that will directly impact achievement results. Programs such as UPK, Kindergarten, and Summer School. The "Tax Cap" will serve its purpose and begin to control costs, but to implement this new law and continue with the GEA is simply a recipe for disaster. We are out of strategies and out of time. The GEA needs to be addressed now! ~ Upstate suburban superintendent

Three years of using reserves, cutting 120 staff members, seeking and receiving major concessions from bargaining units, and continuing to have deal with GEA, withdrawal of ARRA [i.e., federal stimulus aid], and flat state aid at the best have taken a draconian toll on our district. There is really nothing left that this district can do except finish dismantling an outstanding educational institution. ~ Upstate suburban superintendent

Our district is on a downward spiral. It is difficult to think of the gravity of the situation facing us next year and in the near future. To fund the escalating costs of

health insurance, special education and liabilities for ERS/TRS, it will take significant cuts to do so, given the constraints of the tax cap and the diminished State Aid funding over the past several years. Unless something changes, children will be denied a free and APPROP-RIATE education. Their exposure and experiences in extracurricular activities will go by the wayside to ensure we comply with MANDATES first. ~ Upstate suburban superintendent

We are just "getting by," living from year to year. We will not be able to keep pace with community expectations in the future. ~ Downstate suburban superintendent

Our district is one year away from having to cut extra-curricular and interscholastic offerings as well as having to increase class size across the district. Subse-quent years will bring about additional cuts to program. ~ Upstate rural superintendent

The issue is not the near term expenses or revenues but the long term rate of growth of healthcare and retirement costs relative to my districts expected increases in revenues from local taxes and state aid. ~ Upstate rural superintendent

Spending is not the problem, lack of revenue is. State Aid formulas and the GEA have devastated our revenue, all reserves and fund balance have been dipped into, and the tax cap is the final right hook. It is obvious that our state government is limiting our revenues in an effort to choke off smaller schools that are more dependent on State Aid. This is shameful… They are perpetuating a system where education is the great equalizer only if you live in the right school district. ~ Upstate rural superintendent

Special Education costs / mandates are out of control. Cost should be an allowed consideration, just as it is for regular education students. ~ Upstate suburban superintendent

Require every legislative action related to education to include a cost-benefit analysis; a cost-per-district estimate; and a benefit/impediment analysis prior to vote. For example: 1)APPR and $700 million RTTT does not reveal real costs to districts; 2) The new cyber-bullying off campus law will raise extreme costs in administrator time, legal fees, and police time/expenses. ~ Downstate suburban superintendent

NEW YORK STATE

COUNCIL OF SCHOOL SUPERINTENDENTS

7 Elk Street, Third Floor Albany, New York 12207

518.449.1063 www.nyscoss.org

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