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Manhattan Institute

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The Cash Excuse


The Cash Excuse

April 13, 2004
Urban PolicyNYC
EducationPre K-12

IN his Martin Luther King Day speech in January 2003, Mayor Bloomberg bravely rejected the popular but misguided idea that inadequate funding was the reason for the miseducation of the city's children. The $12 billion schools budget would be sufficient, Bloomberg suggested, if his administration succeeded in ending the system's "bureaucratic sclerosis" and improved the teaching of basic skills.

Fifteen months later Bloomberg is creating a handy excuse for failure: He's now saying that he needs an additional $5 billion in state funds for his school reforms to succeed. This would bring spending in the city up to an astronomical $18,000 per pupil - close to the cost of elite private schools.

The money is supposedly due the city because of last year's Court of Appeals ruling upholding a decision by Judge Leland DeGrasse in the lawsuit brought by the Campaign for Fiscal Equity. Unfortunately, both courts managed to ignore a mountain of evidence that lack of money isn't the culprit for the failure of city schools.

When the case landed in Judge DeGrasse's court in 1993, it was good fortune for the city's educrats. DeGrasse was picked for the bench in 1988 by New York County Democratic boss Herman (Denny) Farrell, who then rammed his choices through the party judicial convention. Thus, in a case that basically pitted the local political and education establishment against Republican Gov. Pataki, the presiding judge in a non-jury trial owed his appointment to a Democratic Party boss who wanted more state education dollars for the city.

In what often seemed like a show trial, CFE enjoyed virtual free rein in DeGrasse's courtroom to play to the media and public. It trooped high school students into the courtroom, ostensibly to teach them how democracy and the court system work but in reality to keep the purported beneficiaries of a pro-CFE ruling always in the media eye. At one session, Schools Chancellor Harold Levy theatrically stormed out after a state witness dared claim that the city had sufficient money to run the schools effectively.

DeGrasse's lack of even-handedness extended to what testimony he would allow. While he let teachers-union President Randi Weingarten and Chancellor Levy testify - despite their institutional ties to the school system - he excluded potentially significant evidence offered by the state.

An independent research group, Management Analysis and Planning, did a study on how much a "sound basic education" in New York City should cost. A "professional judgment" panel, made up mainly of principals and superintendents from districts outside the city, constructed an imaginary "adequate" budget for an education system with demographic characteristics similar to New York's. It found that "the financial resources available to New York City public schools are adequate to provide the state-specified 'opportunity of a sound basic education.' "

Judges have allowed this methodology in school funding cases in other states, but DeGrasse quickly agreed with the CFE lawyers that it was mere "hearsay" and chucked it out.

Overall, DeGrasse accepted almost every piece of evidence that the plaintiffs presented as "probative," yet consistently rejected scholarly evidence offered by the state. One example will suffice:

DeGrasse writes: "Plaintiffs offered probative evidence that the totality of conditions in crumbling facilities can have a pernicious effect on student achievement."

What evidence? DeGrasse points to this rumination from former state Education Commissioner Thomas Sobol: "If you ask the children to attend school in conditions where plaster is crumbling, the roof is leaking . . . that says something to the child about how you diminish the value of the activity and . . . perhaps of the child himself." If, Sobol continued, "you send a child to a school in well-appointed facilities, that sends the opposite message. That says this counts. You count. Do well."

DeGrasse found this persuasive. But he rejected a rigorous statistical study by Eric Hanushek, one of the nation's leading education economists, which demolished the hypothesis that schools in disrepair cause poor student performance.

Astonishingly, even as the judicial process moved along, CFE's argument that more money would improve New York City's public schools was receiving a real-life test. According to the city's Independent Budget Office, from 1997 to 2002, spending on the city's public schools rocketed from $8.8 billion to $12.5 billion. That added $3.7 billion brought per-pupil spending in the city almost to $12,000, well above virtually every other state in the nation.

The results? Underwhelming: More than half of the city's children still can't read at grade level, and only 15 percent of the students graduate with a Regents diploma.

If the courts were unimpressed by the extra $3.7 billion per year spent by the city schools, though, you would think that they would at least say exactly how much more money would meet the constitutional standard. Nope: The judges tossed that hot potato back to the Legislature and the governor.

The premise behind the fiscal equity decision is absurd. There is no magic level of funding that will provide all children an opportunity for a decent education. Nevertheless, CFE revels in the absurdity: It even spent $1 million on yet another costing-out study for city schools.

Indeed, CFE hired MAP - the same group whose earlier report it had thrown out of evidence in the trial - to do the new report. This time, though, the professional-judgment panels preparing the funding calculations consisted solely of administrators, principals and teachers on the city's Department of Education payroll.

Not surprisingly, the DOE employees proved very generous with taxpayer money: their report concluded that the city schools needed yet another $3.7 billion per year. A few weeks later, CFE arbitrarily raised the amount by another couple of billion dollars.

Unmentioned was the fact that the state's budget deficit is $6 billion. In other words, after a decade of litigation that cost taxpayers $50 million, the fiscal equity case has managed to divert public discussion away from serious education reform to an Alice in Wonderland dispute about money the state doesn't even have.

It's tragic that the Bloomberg administration is now complicit in this diversion.