NCPA - National Center for Policy Analysis

More Stimulus Poison

August 9, 2010

Just when it looked like New York's free-spending public schools were about to do some serious belt-tightening, along comes the U.S. Senate to clear the way for another $26 billion "stimulus" dose, says E.J. McMahon, director of the Manhattan Institute's Empire Center for New York State Policy. 

The $26 billion "stimulus" package will be enough to undo a large chunk of the $1.4 billion school aid cut that Gov. Paterson fought to preserve in the recently enacted 2010-2011 state budget.  The state, the city and local school districts have burned through about $17 billion in federal stimulus funds, including amounts budgeted for this year.  Assuming the next round of state and local stimulus wins House approval next week, the result will be even more spending that New York taxpayers cannot possibly sustain -- and that Washington cannot indefinitely subsidize, says McMahon. 

Keep in mind: 

  • New York's school spending of $17,173 per pupil as of 2007-2008 was the highest of any state -- 67 percent above the national average, according to the latest Census Bureau data.
  • Between 2000-2001 and 2008-2009, New York schools added 14,746 teachers and 8,655 nonteaching professionals -- even as enrollment was dropping by 121,280 pupils.
  • Confronted with an average 5 percent state-aid cut, school districts tapped their reserves, trimmed programs and held down tax hikes in their proposed 2010-2011 budgets.
  • Mayor Bloomberg announced in June that he would avoid layoffs in New York City schools by withdrawing his offer of a pay hike for city teachers.  

Congressional Republicans who opposed the latest stimulus measure are right on the money when they point out that the new package -- including funds that must be spent to rehire teachers or sustain payrolls -- is an enormous gift by Democrats to their public-employee union allies, says McMahon. 

Lt. Gov. Richard Ravitch is of the opinion that federal stimulus aid comes with strings that prevent states from economizing in areas such as education and health care.  

"The federal stimulus has led states to increase overall spending in these core areas," he says, "which in effect has only raised the height of the cliff from which state spending will fall if stimulus funds evaporate." 

Source:  E.J. McMahon, "More stimulus poison," New York Post, August 6, 2010. 

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