Budget Concerns and Education Spending in NYC

Mayor Zoran Mamdani is facing a significant budget shortfall, estimated between $5.4 billion and $7.1 billion, yet seems reluctant to reduce spending in the Education Ministry.

Continuing to invest heavily in the city’s public schools may not be sustainable financially. Mamdani’s proposed budget includes $38 billion for Department of Education (DOE) operations, reflecting an increase of about $3 billion, or 8%, from the previous fiscal year.

Education already consumes roughly a third of the city’s budget, with the Citizens’ Budget Commission estimating expenditures of over $42,000 per student, making it the costliest educational system among metropolitan areas.

Enrollment in schools, though boosted by around 50,000 new immigrant students, has dropped by 12% since 2020. Additionally, births in the city have decreased by 20% since 2000, yet the DOE budget continues to rise.

Many families, regardless of income level—from working-class to affluent—are seeking alternatives to schools that are not meeting performance standards.

Recent national assessment results reveal that only 28% of fourth graders in New York City are proficient in reading, and a mere 33% are adept in math.

There’s a growing sentiment that New Yorkers are not receiving adequate educational value for the taxes levied, largely because public schools frequently favor the interests of teachers over those of students and families.

For instance, the city intends to allocate $1.6 billion next year for hiring teachers to comply with Albany’s small-class mandate, a move influenced by the American Federation of Teachers’ hiring initiative.

Simultaneously, the number of schools with enrollments under 150 students is on the rise, increasing from 80 expected in the 2024-25 academic year to 112 this year.

While these smaller schools face viability challenges, they benefit from the DOE’s “hold harmless” policy, which guarantees them at least the same funding as the previous year, costing the city approximately $250 million annually.

Previous efforts by Mayor Eric Adams to reduce funding for schools with declining enrollment were met with protests and lawsuits from parents and teachers, ultimately leading him to retract those plans.

Mamdani could begin addressing the budget gap by revising the Department of Energy’s policies.

A straightforward first step might involve considering state Senator John Lieu’s suggestion to pause the enforcement of further mandates regarding class sizes. Currently, about 64% of classes already adhere to this requirement, and many schools lack the physical space to comply.

City Council President Julie Menin has also proposed that Albany cover the costs for mandates imposed by state legislators.

In addition, it would be prudent for Mamdani to examine the procedures tied to the Carter case, which has seen city reimbursements for private school tuition for students with disabilities balloon from $47 million in 2005 to an estimated $1.3 billion in 2025, as highlighted by Manhattan Institute fellow Jennifer Weber.

Many of the families filing for these reimbursements—averaging $101,757 each—are typically affluent, capable of affording high attorney fees and tuition costs upfront before receiving restitution.

Under Mayor Bill de Blasio’s policies, these families can initiate a lawsuit once, allowing for automatic renewals thereafter, which increases the financial drain on the city.

Interestingly, the city might actually save money by requiring families to reapply for reimbursement annually.

Additionally, the Mayor should heed Mr. Menin’s suggestion to audit and competitively re-bid the DOE’s contracts with outside vendors, which could yield savings of around $175 million over two years.

Good government practices are essential, but they often seem lacking in New York City.

Finally, the DOE should consolidate smaller, unsustainable schools and districts, as they incur unnecessary costs related to fixed overheads while serving fewer students.

Indeed, even as construction plans for new schools progress, the city is anticipated to waste $1.4 billion through 2029 on electrifying school buildings under Local Law 97, intended for decarbonization.

In a time of financial strain, it feels irresponsible to continue funding education initiatives that do not lead to improved outcomes for students.

The current organizational framework for city schools is also problematic. Mayor Mike Bloomberg had reorganized schools into ten geographical regions for more effective management, but de Blasio reverted to a structure of 32 separate districts that still exists today.

The size of these districts varies greatly, from under 4,000 students in Brooklyn’s District 16 to more than 38,000 in Staten Island’s District 31.

Streamlining school districts to a more uniform size could facilitate the reduction of redundancies in non-teaching roles, which have noticeably increased from 12,717 in 2022 to 13,636 now, even amid declining enrollment.

Given that per-pupil spending is now comparable to tuition at elite private institutions, one would expect New York’s public school system to thrive in attracting families. However, that is not the case—it feels more like a financial sinkhole driving families away.

The initiative to make education affordable will likely falter if urban school systems continue to fall short in providing essential services.