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Civic Report
No. 42 July 2004

No Strings Attached?
Ensuring that “CFE” Funds are Spent Effectively


  1. The official Law Reporting Bureau citation for the Court of Appeals decision in the CFE case is 100 NY2d893. Subsequent references in this report are to the opinion as issued by the court on June 26, 2003.
  2. The 1982-83 ranking, in which New York State's per-pupil spending was exceeded only by Alaska's, is derived from data published in the U.S. Department of Education's Digest of Education Statistics 2002. The 2001-02 ranking is based on estimates derived from federal data and published in Education Vital Signs: An American School Board Journal Special Report, February 2003. Preliminary data from the same source indicate New York State per-pupil expenditures were also the highest in the nation as of 2002-03.
  3. Counting all sources of revenue (local, state and federal), total public school funding in New York City rose during this period from $3.8 billion to $11.3 billion, while per pupil spending went from $4,165 to $10,842. In the rest of the state, total funding rose from $7.7 billion to $21.3 billion, and per-pupil spending increased from $4,329 to $11,937.
  4. By 2003-04, the city's share of state school aid (37.1 percent) actually exceeded its share of statewide enrollment (36.1 percent), according to Governor Pataki.
  5. The class size ratio used here is for Grades 1 through 6. Class sizes and trends in class size reduction were very similar for higher-grade levels throughout the period, however. Prior to 1994-95, the State Education Department publicly reported class size averages only once every five years, rather than annually. As shown in Table 1 in the Appendix, the available data indicate the statewide average Grade 1-6 class size hovered just under 24 students during the 1980s.
  6. A class size of 21.8 pupils per teacher translates into 218 pupils per 10 teachers. But the total, statewide total pupil-teacher ratio of 12.6 pupils per teacher would translate into just over 17 teachers for 218 pupils.
  7. These data are taken from school district fiscal profiles by the State Education department and include reported expenditures for teacher salaries, pupil personnel service salaries, curriculum development salaries and other instructional salaries, health benefits and other employee benefits.
  8. This was largely in response to changes in federal law governing special education in the 1970s. As public school districts came into compliance with this law and subsequent legal challenges to old practice in this area, many more students were designated as entitled to special education. This designation indicates that the student has been discovered to have a handicapping condition requiring either special services or modifications to his educational program.
  9. In New York City as of 2001-02, the school system allocated $9,059 per pupil for general education and $30,464 for special education, according to the Education Department's School-Based Budget Reports.
  10. This period coincides with the Legislature's approval of a new category of funding - the LADDER program, which set aside money for both pre-kindergarten and early grade class size reduction.
  11. Specific data breaking down full- and half-day kindergarten enrollments in the state are not available, however.
  12. In 1996-97, the state began to exempt many more students from testing due to their limited proficiency in English. (These were students who came from non-English speaking homes.) The state estimated that at least half of the increase in test scores from 1995-96 to 1996-97 was due to this change in the tested population.
  13. Some of that five-point increase was caused by the change in the testing population in 1996-97, so achievement on this test was essentially stagnant during the 1980s and 90s.
  14. The respective New York City to statewide NAEP scores in 2003 were as follows: On the Grade 4 NAEP reading test, 226 in the city and 236 for the state; on grade 8 reading, 266 for the city and 280 for the state; on grade 4 math, 210 compared to 222; and, grade 8 math, 252 compared to 265.
  15. The dropout rate calculated by the state reports the percentage of all high school students in a given year. Since there are traditionally four years of high school, the annual dropout rate reported by the state can be thought of as indicating slightly less than one-fourth of the "cohort" dropout; i.e., that percentage of a class that does not graduate. If five percent of all high school students drop out in a single year, then a class would lose slightly less than 20 percent of its students over a four-year period.
  16. What is going on? It is known that there is some slippage in the reporting of dropout statistics. Schools have some flexibility in deciding when they formally count a student as a dropout. That flexibility can affect year-to-year comparisons. Also, schools can record discharged students in many different ways, some of which don't count the student as a dropout. Audits in the city in recent years uncovered abuses of this system, and a tightening of the procedures may account for the spike in the dropout rate in recent years. Of course, if that is the case, it would indicate that the reported decline in the dropout rate between 1982 and 1997 was nothing more than an accounting illusion.
  17. The most recent report indicates a small uptick in the city's graduation rate, to 53 percent as of 2003, as reported in Class of 2003 Four-Year Longitudinal Report and 2002-03 Event Drop Out Rates, issued by the Department of Education. It is too early to say whether this indicates any definitive trend, however.
  18. In the past, students could earn a local diploma by demonstrating basic competency on a series of tests known as the Regents Competency Tests. These tests are no longer in use. In the past, more advanced students could earn a "Regents-endorsed" diploma by passing a sequence of state-developed Regents exams in a variety of subject areas. (1 English test, 2 math tests, 2 science and 2 history/global studies tests and 1 foreign language test.) Since the late 1990s, all students must pass a sequence of five Regents exams (1 English, 1 Math, 1 Science, American History and Global Studies) to earn a diploma of any type. In order to obtain a "Regents Diploma" students must pass additional exams in science, history and math. A student earning a local high school diploma in New York State today is being asked to demonstrate a higher level of achievement than local diploma recipients of ten or twenty years ago. Data do indicate that more students in the state are taking and passing a minimal number of Regents level classes (albeit at a lowered "transitional" passing grade of 55.) Changes in reporting over the years, as these new policies have been adopted, render any long-term comparison of the results of the Regents exams meaningless, so they are not presented in this report.
  19. New York State Education Department, A Report to the Governor and the Legislature on the Educational Status of the State's Schools: The Chapter 655 Report, various years.
  20. The UFT and the city Department of Education recently agreed to devote the remaining extra time to 100-minute blocks of additional professional development time, to be spread over 18 specified Mondays during the school year.
  21. The statewide figures are compiled by the New York State School Boards Association.
  22. Campaign for Fiscal Equity v. State of New York,, New York State Court of Appeals, No. 74, June 26, 2003, p. 15.
  23. Metro Industrial Areas Foundation (IAF), "Analysis of the Allocation of Teachers in the New York City Public School System," March 2003.
  24. Campaign for Fiscal Equity v. State of New York, 86 NY2d 307.
  25. Ibid.
  26. Campaign for Fiscal Equity v. State of New York,, New York State Court of Appeals, No. 74, June 26, 2003, pp. 13-14.
  27. 719 N.Y.S. 2d 475
  28. Campaign for Fiscal Equity v. State of New York,, New York State Court of Appeals, No. 74, June 26, 2003, p. 42.
  29. Ibid. p. 17.
  30. Ibid., p. 18.
  31. The Zarb Commission did not recommend a specific funding figure, but said $2.5 billion to $5.6 billion from state, local and federal sources over five years would be "a reasonable place to start."
  32. The New York State Commission on Education Reform, Final Report, March 29, 2004, p. 20.
  33. CFE Sound Basic Education Task Force report, Part III, posted at
  34. An "adequacy study" conducted for CFE by the American Institutes for Research and Management Analysis and Planning, Inc., recommended a class size of 16 pupils for "average poverty" schools (those with about one-third eligible for free lunch), and 14 for "very high poverty" schools (those with 90 percent eligible for free lunch). The study also recommended universal all-day kindergarten (see The New York Adequacy Study: "Adequate" Education Cost in New York State, which can be downloaded from In releasing the Assembly Democrats' CFE compliance plan, Speaker Sheldon Silver stressed support for class-size reduction, without citing a specific target (see Silver's June 2 press conference remarks, posted at
  35. While the trial court in the CFE case embraced the claim that smaller class sizes will produce better results, the issue remains highly contested among educators and education researchers. For example, noting that more than half of the state's eighth grade classes with below-average English Language Arts test scores also had below-average class sizes as of 2003, The Standard & Poor's study conducted for the Zarb Commission concluded that smaller class sizes "are neither a guarantee nor a prerequisite of above-average achievement in all school districts."
  36. A recruitment website run by the city Department of Education ( lists shortages of teachers in Math, Science, Special Education, Bilingual Education, English, Spanish and Physical Education.
  37. For example, $2 billion could presumably "purchase" 20,000 new teachers at an average salary and benefit cost of $100,000 per teacher. What would do more to assure a sound-basic education for all students -- spreading those 20,000 teachers across the city and/or state, or assigning them to a more limited number of schools with the 200,000 most needy students, thereby reducing class size in those schools to single digits? But are 20,000 truly qualified teachers looking for work at this moment? What if there are not? Does class size reduction make as much sense if quality teachers cannot be found?
  38. Campaign for Fiscal Equity v. State of New York,, New York State Court of Appeals, No. 74, June 26, 2003, p. 38


Center for Civic Innovation.


CR 42 PDF (175 kb)


Labor Contract Could Waste School Windfall: Report Says Changes Needed in Teacher Deal, New York Sun, 7-14-04
Think tank: Reform Doomed Without Teacher Contract Changes
By Joel Stashenko, Associated Press Writer The Associated Press State & Local Wire, 7-13-04

The 2003 New York State Court of Appeals ruling in the Campaign for Fiscal Equity case has created a historic opportunity to reform New York City's troubled schools. Unfortunately, state officials seem focused on increasing funding statewide without mandating change in how the city manages its schools. This report reviews two decades of evidence showing that increasing school aid without structural reforms does not improve city schools. Instead, the data point to the city's real problem: poor management, and contractual restrictions that make it virtually impossible to assign more good teachers to the schools that need them most. If state officials do not mandate structural reforms through the CFE ruling, they will only succeed in mandating a higher price tag for failure.


Executive Summary

About the Authors



Enrollment Steady, Funding Up

New York City's State Aid Edge

More Spending = More Staff

More Money = New Programs

Did More Staff + More Programs = Better Education?

State Test Score Data

NAEP Test Scores

High School Graduation Rates

Regents Diploma Attainment Rates

Number of Students Enrolled in SURR Schools

What These Data Mean


The Source of the Problem: the Teachers' Contract


The Responses to Date


The Bottom Line


Figure 1. Public School Enrollment in New York State

Figure 2. Public School Spending in New York State, Total and Per-Pupil

Figure 3. Per-Pupil State Aid to Public Schools

Figure 4. Staffing in New York State Public Schools

Figure 5. Staffing Ratios in NY Schools

Table 1. Average Class Size: Grades 1-6

Table 2. Enrollment in Special Education: Public and Private Schools

Table 3. Student Achievement: Reading/English Language Arts - Elementary School

Table 4. Student Achievement: Mathematics - Elementary School

Table 5. Student Achievement: Reading/English Language Arts - Middle School

Table 6. Student Achievement: Mathematics - Middle School

Table 7. National Assessment of Educational Progress New York State Vs. National Average

Table 8. Annual Dropout Rate (Percent of High School Population)

Table 9. Number of Schools and Students Under Registration Review

Table 10. Comparison of School Districts of Various Wealth Levels 2000-01 School Year

Table 11. Selected Teacher Characteristics In Schools With Different Populations 2001-02 School Year

Table 12. Teacher Salaries and Student "Needs" in New York City Schools Districts Ranked in Descending Order of Average Teacher Salary



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