The New York Times reports that the budget of individual NYC public schools will be cut 5 percent next year, following a cut of 3 percent last year. Despite the federal government borrowing $trillions our children and grandchildren will have to sacrifice to repay to provide stimulus money to those schools. Despite a huge New York State tax increase for the well off, to be followed by additional state tax increases on everyone else, to increase school state aid. Despite NYC property and sales tax increase, disproportionately directed to the schools. Despite the fact that total spending on the New York City schools, including retirement benefits, will be going up not down, even as the money most New Yorkers earn, and wht they can afford, is going down. Total spending up, spending in schools down. But the Times doesn’t ask the question why.
Recently we read that teachers that no principal wants to take responsibility for, previously paid to do nothing, will be stuck in some children’s classroom. Today the Times reports that Fair Student funding, which would have ended the practice of qualified teachers moving on to the schools of the affluent while the poor get a revolving door of the uncertified and unqualified, will be postponed a year — and probably forever. The teacher’s union is thrilled. Also reported by the Times the schools face “deep cuts in after-school and weekend programs,” the kind that give disadvantaged children a chance. An end to summer school and a return of fiscal social promotion seems certain. That is where the money isn’t going. Where is it going? No one will say.
Well I guess Joel Klein couldn’t contain himself. He did say, according to the Times, that cuts were needed because most of the federal stimulus money “will be used to pay for annual increases in areas like pension contributions.” More pension contributions? Over and above the 23.6% of payroll that the City of New York paid for teacher pensions in fiscal 2009 (teachers with more than 10 years’ seniority contributed nothing to their own pensions)? Was it only 14 months ago that then-Governor Spitzer signed the deal to allow teachers to retire at age 55 instead of 62, after working 25 years instead of 30, without those already at 55 contributing an extra dime, and with those near retirement contributing a little extra for just a few years? A deal that is irrevocable, retirement benefits that must be paid even if public education must be eliminated, even if property taxes must be raised to 100% and everyone’s home seized, no matter what the cost, no matter what the consequences?
The 25/55 pension plan was pushed by the UFT and Randi Weingarten, agreed by Mayor Bloomberg, passed by the Democratic Assembly with almost no votes against, and passed by the then Republican-led State Senate without any no votes in exchange for UFT support in a special election upstate. The now defunct New York Sun managed to ferret out the moment when the State Senate secretly passed it, along with much trumpeted bill to revise the management of the horse racing industry. I wrote this post to beg then-Governor Eliot Spitzer not to sign it.
The law was signed by then-Governor Spitzer a week or two before Client 9. No press release was issued by a man who was then running around the state announcing little grants of mere hundreds of thousands of dollars. This, in contrast, was an irrevocable multi-billion decision that has determined that the fate of future New York City children will, for a generation, will be no better than the fate of past NYC children. The Voice of Doom Barry Popik ferreted out this press release from the UFT, and let me know about about it. I promptly demanded a refund of the money I and contributed to Spitzer’s Empire Fund. Before Client 9. I already knew he was screwing the young.
It read (in case they see this and take it down) “after 14 years of work – and much frustration and false starts – New York City teachers can thank both the collective bargaining and the political process, specifically Governor Spitzer and the leadership in the state Legislature, for approving this measure and Mayor Bloomberg and his team for jointly supporting it…This program, negotiated by the United Federation of Teachers and the city, arises from the 2005 collective bargaining agreement where the parties jointly agreed to support legislation of this kind if it was cost-neutral to the city. That is exactly what the parties did on terms comparable to what other unions negotiated over the past 15 years.” Emphasis mine. The terms are fraud. Lies. Heads the powerful win today, tails they still win and everyone else loses forever, and the odds of heads were near zero. Most of these deals pass as financial bubbles are at their peak, and assume above average returns forever from those levels. Everyone involved knows this is a fraud.
In reality, after one pension enhancement after another, and inadequate past funding of even the pensions that existed before them, the city’s pension are retiree health care costs are soaring, and services and benefits are being gutted and taxes raised to pay for it. I don’t always agree with the New York Post, but this article is the absolute truth. “The city faces potentially catastrophic costs of up to $43 billion from recent pension investment losses, which threaten to drain the municipal budget and put taxpayers on the hook for years…Taxes could ‘go through the roof,’ and city services such as police and fire protection, schools and sanitation could suffer from forced cuts, experts said.”
But the Post, like the Times, doesn’t talk about the 25/55 pension deal for teachers. Neither does the Daily News. (Just as they don’t talk about how sky-high school spending is in the rest of the state). No other publications have written about the link between greater and greater benefits for tax-exempt senior citizens, and a diminished future for everyone else, either. It might offend their aging readers. Moreover the newspapers are “all in” with Bloomberg, after backing an end to term limits (temporarily disguised as an extension). There is nothing they can really say about anything he has done or will do. I certainly don’t want to hear it. They have been far more supportive of the worst things that man has done than the best.
Incumbent Republicans won’t bring it up. They voted for it, and would prefer that money not be wasted on New York City’s children anyway. Getting rid of Fair Student Funding is the first step in meeting their limited interest in buying off the yuppies. Incumbent Democrats have the same concern, and the same interest in pandering to those who matter, like teachers who commute in from the suburbs and retire to Florida, to make sure there is no competition for office.
Speaking of competition for office, hey Rock Hackshaw do you remember this post in which I explained what the consequence of this enormous expense would be? And your misguided but hopeful response?
“EDUCATION is off the table Larry. Even though I feel we could get a better bang for our education bucks right now. It's a sacred cow that cannot be sacrificed.” Well guess what? Most of the cost of 25/55 has been deferred to the future. It hasn’t even hit yet. And in two years the federal stimulus money runs out, and the way things are going the federal government will be slashing everything at that time to prevent bankruptcy. So what happens then?
The Mayor is desperate. He wants to cut benefits (and probably wages too, like he did a few years ago), for future public employees. From whom even less will be expected, the public employee unions will gleefully insist, and while they are at it, those about to retire shouldn’t be expected to do much either, because they would have “sacrificed” by (once again) going along with less for those coming after.
But that won’t save any money up front. Evidently there are some things even actuaries who are hired to lie won’t go along with. According to the Post “an April 30 letter from City Actuary Robert North shows "zero" savings in fiscal years 2010 and 2011 if the law passes this year, and only $43 million starting in 2012. North told The Post the city wants him to adopt a new methodology, called a ‘forecast method,’ that would calculate costs of future as well as current employees and let the city claim savings upfront from reduced costs in the future.” Ie. future public employees are going to be paid much less in overall compensation someday, so let’s spend that future savings right now when I need it to put some distance between my political deals and the consequences! As if not enough future revenues have already been spent, and not enough costs shifted to the future.
Hey Rock, you didn’t know the cost of having people retire seven years earlier, with unlimited health care for ten years before Medicare shares the load rather than three. I did. Get mad buddy.
Bill Thompson never complained about a school system that the New York State Court of Appeals later found to be unconstitutional. And evidently he didn’t mind a school funding formula that allowed more money to be spent in the schools with a concentration of affluent students than in schools that serve the disadvantaged, because he never mentioned it. So I guess he won’t mind getting rid of Fair Student Funding, or at least won’t dare to bring it up, because he is also in the inside. Neither will Anthony Weiner, who has staked his career on attracting the support of those with existing advantages by promising to enhance them. A man with far more intelligence and ambition that I do, as such things are commonly mentioned, and less morals that the cup sitting next to me. Christine Quinn once dared to suggest that teachers in more difficult schools should be paid more; those kind of girlish fancies are gone. Perhaps she agrees that what we really need to do is argue about issue like gay marriage. A lot, to the exclusion of all else. Republicans and Democrats love those sorts of issues.
That Court of Appeals allowed the conditions it described as unconstitutional to go on for a decade, and will now sit by as the additional funding from the Campaign for Fiscal Equity lawsuit is limited to earlier retirement for New York City teachers and higher spending, funded by New York City taxpayers, in the rest of the state. After all, the one constitutional provision that actually matters is that pensions may not be reduced, even after they are retroactively enhanced and are neither worked nor bargained for. Judges are de facto appointed by the very same political class, and they get pensions too. But they don’t send their kids to NYC public schools, other than the special deal schools.
Now that the city and state and in a downward economic spiral, you won’t see the UFT criticizing the gutting of actual education. According to the Times it said the administration had “gone a long way to protect the classroom and maintain services for students in these difficult times.” The one service for student that matters being the right to be paid to do nothing for one year for each year actually worked. And you won’t see the Campaign for Fiscal Equity objecting to the diversion of all the extra money New Yorkers are paying to the retired. After all, its lawsuit was backed by the UFT, and the New York State Association of School Boards, which represents school districts in the rest of the state. The New York City Board of Education was prevented by the Court of Appeals from being a party to the suit, so it was the UFT and the NYSASB that claimed the mantle of representing New York City’s children.
I provided a whole lot of data for the CFE. I wish I never had. In FY 1996 the State of New York, seeking a away out of a prior fiscal crisis, slashed state school aid for New York City and increased it for the rest of the state, at a time of rising enrollment. The effect went on for years. I sent my children to Catholic School, other friends left the city, others spent the last 15 years fighting to get their children into the “special deal schools” where the UFT allows an actual education to be provided to the limited number of people who matter. I had hope that things might be different for the next generation. I was a fool. The money had been diverted to early retirement for NYC teachers and massive excess education spending in the rest of the state before a single dime was spent on providing a decent education for the city’s children. And now those dimes will be taken away year by year for a decade — and massively two years from now.
I saw what was happening, and see what is coming, just as a matter of arithmetic, even the back of the envelope kind possible when the actuaries and others don’t provide the real facts. Both of my daughters passed the test for one of those special deal high schools. I told the second one what might be coming, how there would be no after school activities, and then no electives, and then perhaps no senior years. She decided to go there anyway, but will not be disappointed. I was worried. But thanks to the stimulus package, the full collapse is likely postponed until the end of her junior year. We’re ready for what is coming. Anyone else?
Mayoral control? Who cares! It’s over. The future has already been taken, and everyone who matters has an incentive to claim that everything is great except for “challenges” due to “circumstances beyond our control” until none of the rest believes it anymore. And then? Find someone to blame, keep power, and don’t worry about anything but yourself. That’s what they have done, and it’s too late to do anything else short of bankruptcy. And no one will even ask questions.