Funding Education: The Case of NY State

• In Event: Education Finance in times of Global Crises: Lessons from Comparative Studies

Proposal

The Covid-19 world health crisis, has led to worldwide school closures, loss in learning, as well as economic and social crises. Challenges such as globalization, democracies, technological development, power, poverty and rampant inequality, have become widespread. As the economic losses have heighten social inequality, the more disadvantage students will fall further behind their advantaged peers thereby exacerbating the inequity of social divide, consequently translating into greater losses of lifetime earnings. The world will not be the same after this pandemic, and neither will k-12 or higher education institutional systems.
In their paper, Eric A. Hanushek and Ludger Woessmann “THE ECONOMIC IMPACTS OF LEARNING LOSSES OECD” Education Working Paper No. 225, September 8, 2020, wrote that the worldwide school closures, led to losses in learning that cannot be made up for. These losses will have lasting economic impacts on both the students and nations. “While the precise learning losses are not yet known, existing research suggests that the students in grades 1-12 affected by the closures might expect some 3 percent lower income over their entire lifetimes. For nations, the lower long-term growth related to such losses might yield an average of 1.5 percent lower annual GDP for the remainder of the century.” (1)
While the true impact of COVID-19 will not be known for months, or years, it will have a devastating effect on Education, and Social Responsibility. Specifically, in NYS schools, a $10 billion loss in revenue was projected impacting support for schools for a total of a flat $27.9 billion in school aid. (2)
In April 2020, at the request of NYS DOB, the Boston Consulting Group (BCG) compiled an in-depth economic impact analysis of COVID-19 on the State economy. The paper pointed to the possibility that General Fund receipts for NYS schools are projected to decline by $13.3B for SFY 2021 and $61B from 2021-24. (3)
A significant issue affecting P-12 and/or Higher Education Funding in NYS is that the Governor’s administration as a result of the COVID-19 pandemic, began to temporarily hold back 20 percent of its payments to local governments as state is faces a revenue loss of $14.5 billion for just one year. (4) In response, New York State United Teachers Union, has prepared to sue the state because without these funds, NYSUT assesses that school districts that rely on the state for their funding would face massive layoffs. (5)
The most recent year with census data on education expenditures, for the 2017-2018 school year, New York spent $24,040 per K-12 pupil, almost doubling the national average of $12,612. That year, 39.6 percent of K-12 revenue in New York came from the state. If districts lost 20 percent of that revenue stream, per-pupil expenditures would fall to $22,136. (6)
In the post-crisis era, educational institutions will have to operate in a very different economic, social and political climate, as new expectations will be put on educational institutions in terms of equity quality, value, and accountability.


(1)https://www.oecd-ilibrary.org/docserver/21908d74-en.pdf?expires=1602439930&id=id&accname=guest&checksum=74DF61DEA7FC1419B7D1BB655230F3EA
(2) https://www.budget.ny.gov/pubs/press/2020/fy-2021-state-budget-highlights.html
(3) https://www.budget.ny.gov/pubs/archive/fy21/ny-covid19-economic-impact-prelim.pdf
(4) https://www.empirecenter.org/publications/even-after-aid-cut-new-york-will-spend-most/
(5)https://spectrumlocalnews.com/nys/central-ny/ny-state-of-politics/2020/09/09/nysut-state-suit-school-aid
(6)https://www.empirecenter.org/publications/even-after-aid-cut-new-york-will-spend-most/

 

Author

• Osnat Zaken, Touro College, Graduate School of Education