FY 2007 Revenue Sources: City, State and Federal

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1 1 FISCAL YEAR 2007 EXPENDITURES This report presents fiscal year 2007 (FY07) expenditures for the New York City Department of Education (NYCDOE). The fiscal year runs from July 1 st through June 30 th. In FY07, NYCDOE served approximately 1.04 million pupils in 1,454 schools. The financial data in this report were extracted from NYCDOE s accounting system (FAMIS) and represent 2007 year-end audited financial data. The pupil enrollment data were based on audited October 2006, school registers. Total spending for FY07 was $18.4 billion, including debt service and City contributions to NYCDOE employees' pensions. Spending includes pass-through funds administered by NYCDOE for children who are not served in NYC public schools. Pass-through spending of $1.5 billion for non-public schools includes funding for general and special education, charter schools and the Fashion Institute of Technology. Excluding the pass-throughs, the remaining expenditure of approximately $16.9 billion represents New York City public school costs. The following pie chart reflects federal, State, City and private revenue sources. New York City local funding increased by 6.3%, contributing 50.5% to the NYCDOE s $18.4 billion total budget. Total State Funding increased by 6.9% and contributes to over 39% of total funds, and Federal Funding decreased by 1.1% making up 10% of total funding. FY 2007 Revenue Sources: City, State and Federal State Categorical 10.8% Federal Funds 10.0% All State Funds = 39.1% State Non-Restricted 14.1% State Operating Aid 14.2% Private Funds 0.4% City Funds 50.5% The actual proportions of total education revenues of the past two years are displayed below. Comparison of Education Funding: Fiscal Year 2007 vs ($ in Millions) FY 2006 FY 2007 FY Revenue % of total Revenue % of total Revenue % of total City Funds $8,726.3 M 50.2% $9,279.2 M 50.5% $552.9 M 0.3% Private Funds $62.2 M 0.4% $72.4 M 0.4% $10.2 M 0.0% State Operating Aid $2,564.2 M 14.8% $2,603.4 M 14.2% $39.2 M -0.6% State Non-Restricted $2,054.2 M 11.8% $2,597.8 M 14.1% $543.6 M 2.3% State Categorical $2,099.1 M 12.1% $1,979.8 M 10.8% -$119.3 M -1.3% Federal Funds $1,862.1 M 10.7% $1,841.0 M 10.0% -$21.1 M -0.7% TOTAL $17,368.1 M $18,373.6 M $1,005.5 M 1

2 2 SUMMARY OF FINDINGS Of the total expenditure increase of $1.006 billion, public school spending increased $884.5 million in FY07. As seen in the chart below, the majority of new spending directly benefited schools. $1,032.9 M FY 2007 DISTRIBUTION OF NEW SPENDING in Million $s $80.8 M Direct Srvcs to Schools -$7.5 M Regional Offices Central Offices -$221.6 M Systemwide Obligations I. Direct Services - $1.03 Billion Increase Direct Services to Schools saw the largest increase with a $1.03 billion in FY07. This was distributed across the following areas: Classroom Instruction - $434.4 million Instructional Support Services - $280.4 million Leadership, Supervision and Support - $ million Ancillary Support Services - $126.5 million Building Services - $6.8 million Additions to Salary/Projected Expenses $8.6 million Classroom Instruction - $434.4 Million Increase Net spending on Classroom Instruction increased by $434.4 million. Teacher salaries were the largest driver contributing to $314.8 million of the $434.4 million increase in addition to increases in contractual instructional services. Average teacher salaries and spending on Other Classroom Staff increased, reflecting new UFT collective bargaining costs between FY 2006 and FY Instructional Support Services - $280.4 Million Increase Instructional Support Services increased by $280.4 million. The greatest increase in expenditures, $166.4 million, was seen in the Related Services area. More Individualized Education Program (IEP) entitlements and higher rates due to collective bargaining contractual increases boosted expenses for mandated speech and counseling providers, occupational therapists, physical therapists and nurses. Referral and Evaluation Services also experienced an increase of $43.8 million due to 2

3 increases in citywide average salaries for school psychologists, social workers, and family workers on the School Based Support Teams (SBST). The rise in Parent Involvement expenditures by $16.2 million included higher spending on parent coordinators because of collective bargaining, new school openings as well as an increase in hires. Leadership and Supervision - $176.2 Million Increase School Leadership and Supervision expenditures increased by $176.2 million from FY06. In addition to staffing increases as a result of new school openings in FY07, the major reason for the cost increase was the settlement of a 7-year collective bargaining contract with the Council of Supervisors and Administrators (CSA). The contract granted CSA members, who are principals, assistant principals, and supervisors, retrospective increases starting July 1, 2003 to March 5, Secretary, school aides, and other support staff also saw a significant increase, as most titles in this category benefited from United Federation of Teachers (UFT) collective bargaining. Ancillary Support Services - $126.5 Million Increase Ancillary Support Services, which include food services, transportation, school safety and computer system support, increased by $126.5 million over FY06. Transportation costs increased due to the UFT contract that was settled in Feb 2006, which required teachers to work some extra time after school. The contract was effective in FY06 for part of the year and the full year impact was seen in FY07. Students could chose to stay after school for tutoring or leave at the regular time. The provision of extra late-bus services and the new contract with bus providers resulted in increased costs. Cost of food services rose due to higher labor costs as well as food supplies. Expenditures on School Safety also increased by $27.9 million. Building Services - $6.8 Million Increase Building services, which include spending on custodial services, building maintenance, energy and leases, increased by $6.8 million or less than 1% over the previous year. Additions to Salary/Projected Expenses $8.6 Million Increase Expenditures in this category include additions to employee salaries that are payrolled separately such as differentials, longevity, holiday pay, delayed payroll actions and technical adjustments. II. Regional Costs $7.5 Million Decrease Regional costs declined in FY07 by 2%, a $7.5 million decrease. Most of this decrease is attributable to the cost savings associated with the expansion of the Empowerment initiative and redeployment of Regional Operations Center (ROC) procurement and human resource staff. In addition, expenditures associated with the Regional Youth Development Program were transferred to Central Administration and are captured in System-Wide Costs in FY07. 3

4 III. System-Wide Costs - $80.7 Million Increase Central Instructional Support increased by $20.5 million, due to new assessment programs NYCDOE introduced to assess student performance results, such as Quality Reviews and Formative Assessments. These assessment tools are used to improve academic outcomes for all New York City public school students by enabling principals, teachers, parents and students to use evaluative and support tools, data, and research to accelerate learning. Expenditures in instructional offices under Central Administration increased by $10.9 million, mostly due to a shift of the Regional Youth Development program from Integrated Service Centers in Fiscal Year Operational offices under Central Administration experienced a $45.2 million increase. This includes expenditures related to building leases and the transfer of impartial hearing services to the Chancellor s Office. HR Connect, a centralized human resource customer service center, became fully operational in FY07 adding $3.8 million to the increase. This program aims to streamline and provide better informational services to the entire employee population of NYCDOE, including teachers, school-based staff, central administration, and support staff. Consulting expenditures to support and implement the goals of accountability and leadership for individual schools, redirecting more funds to schools, also contributed to the increase. IV. System-wide Obligations - $221.6 Million Decrease Debt service dropped by $247.5 million in FY07. There are a number of factors that impact expenditures on debt service such as debt restructuring, principal payments, interest rates, etc. These not only impact the total expenditures but can cause irregularity in payment patterns. The decline was partially offset by an increase in Retiree Health & Welfare expenditures, contributing to the overall $221.6 million decrease. V. Non-Public Schools and Pass-Throughs - $121 Million Increase Non-Public and Pass-Through spending increased by $121 million over the previous year. Charter school enrollment increased from 11,187 in FY06 to 15,576 in FY07 and new schools were opened resulting in an expenditure increase of $63.5 million. Moreover, expenditures related to special and general education students attending non-public contract schools also rose, contributing to the overall increase in this category. 4

5 The following pages exhibit various views of spending trends in New York City's public schools. 5

6 PUBLIC SCHOOL EXPENDITURE COMPARISON: 2005 through 2007 (Dollars in 000's) FY07 - FY06 % of public school spending $ diff Classroom Instruction: $7,487,411 $8,028,490 $8,462, , % 50.2% 50.1% Teachers 5,891,835 6,248,068 6,562, , % 39.1% 38.9% Education Paraprofessionals 276, , ,613 9, % 2.1% 2.0% Other Classroom Staff 15,172 14,648 15, % 0.1% 0.1% Text Books 130, , ,750 2, % 0.9% 0.8% Librarians & Library Books 82,043 88,395 91,057 2, % 0.6% 0.5% Instructional Supplies & Equipment 229, , ,391 16, % 1.5% 1.5% Professional Development 473, , ,165 (19,625) 3.2% 3.6% 3.3% Contracted Instructional Services 212, , , , % 1.3% 1.9% Summer & Evening School 175, , ,720 5, % 1.1% 1.1% Instructional Support Services: $1,744,618 $1,930,283 $2,210, , % 12.1% 13.1% Counseling 298, , ,267 34, % 2.1% 2.2% Attendance & Outreach Services 100, , ,785 17, % 0.7% 0.7% Related Services 723, , , , % 5.1% 5.8% Drug Prevention Programs 37,851 38,169 37,595 (574) 0.3% 0.2% 0.2% Referral & Evaluation Services 251, , ,216 43, % 1.6% 1.8% After School & Student Activities 247, , ,934 2, % 1.7% 1.6% Parent Involvement 84, , ,873 16, % 0.6% 0.7% Leadership/Supervision/Support: $1,328,563 $1,341,033 $1,517, , % 8.4% 9.0% Principals 235, , ,285 26, % 1.5% 1.6% Assistant Principals 393, , ,687 51, % 2.4% 2.6% Supervisors 105,458 85,731 94,698 8, % 0.5% 0.6% Sec'y, Schl Aides & Other Suppt Staff 498, , ,233 70, % 3.1% 3.4% Supplies, Material, Equipment & Tel. 94, , ,410 19, % 0.8% 0.9% Ancillary Support Services: $1,275,018 $1,436,110 $1,562, , % 9.0% 9.3% Food Services 404, , ,931 42, % 2.5% 2.7% Transportation 571, , ,329 52, % 4.5% 4.6% School Safety 192, , ,799 27, % 1.3% 1.4% Computer System Support 106, , ,549 3, % 0.7% 0.6% Building Services: $963,665 $1,086,913 $1,093,664 6, % 6.8% 6.5% Custodial Services 551, , ,407 (259) 3.8% 3.7% 3.5% Building Maintenance 159, , ,709 (1,283) 1.1% 1.3% 1.2% Leases 74,039 86,093 85,868 (225) 0.5% 0.5% 0.5% Energy 178, , ,680 8, % 1.3% 1.3% Direct Service Add to Salary/Proj Expense 71,105 30,951 39,588 8, % 0.2% 0.2% Additions to Salary / Projected Expenses 71,105 30,951 39,588 8, % 0.2% 0.2% Direct Services to Schools Subtotal 12,870,380 13,853,780 14,886,671 1,032, % 86.6% 88.2% Regional Costs: $400,007 $350,918 $343,376 (7,541) 2.7% 2.2% 2.0% Instructional Support & Administration 280, , ,811 (14,974) 1.9% 1.7% 1.5% Sabbatical, Leaves, Termination Pay 119,133 71,736 75,622 3, % 0.4% 0.4% Additions to Regular Salary 244 2,490 1,516 (974) 0.0% 0.0% 0.0% Projected Expenditures 156 1,907 6,428 4, % 0.0% 0.0% Systemwide Costs: $300,572 $300,685 $381,458 80, % 1.9% 2.3% Central Instructional Support 27,314 32,506 52,978 20, % 0.2% 0.3% Central Administration: Instructional Offices 71,594 70,280 81,227 10, % 0.4% 0.5% Central Administration: Operational Offices 178, , ,065 45, % 1.1% 1.3% Central Educ Policy & Chancellor's Offices 23,594 24,081 28,187, 4, % 0.2% 0.2% Systemwide Obligations: $1,008,865 $1,486,906 $1,265,304 (221,602) 6.9% 9.3% 7.5% Debt Service 771,922 1,163, ,972 (247,468) 5.3% 7.3% 5.4% Retiree Hlth & Welfare 231, , ,184 25, % 2.0% 2.0% Spec Commr Investigation 5,046 5,316 6, % 0.0% 0.0% Total Public School Expenditures 14,579,824 15,992,290 16,876, ,517 6

7 COMPARISON OF SPENDING: FISCAL YEARS Total Expenditures $ bil $ bil $ bil $ bil Public School Spending $ bil $ bil $ bil $ bil Enrollment 1,075,338 1,055,986 1,042,078 (33,260) DISTRIBUTION OF SPENDING: Fiscal Years SCHOOL BASED SERVICES Instructional Services* Ancillary Support & Building Services $ in Billions % 70.9% $ B $ B 72.5% $ B % of Total Spending 50% % $2.239 Bil 15.8% $2.523 Bil 15.7% $2.651 Bil % of Total Spending % 0.0 0% DISTRICT and CENTRAL OFFICES District/Regional Administration & Support Systemwide Costs $ in Millions % 2.2% 2.0% $ M $ M $ M 0% % of Total Spending % 2.3% 1.9% $ M $ M $ M 0% % of Total Spending * Instructional Services" combines "Classroom Instruction", "Instructional Support Services" and "Leadership/Supervision/Support". 7

8 WHERE PUBLIC SCHOOLS SPENDING IS CONTROLLED NYC Dept. of Education*: Where Funds were Controlled ** $14.58B $15.99B $16.88B 29.4% 31.4% 31.3% Central 5.3% 5.0% 4.5% Region 65.3% 63.6% 64.2% School FY'05 FY'06 FY'07 NYC Dept. of Education*: Where Funds for Direct Services to Schools were Controlled $12.87B $13.85B $14.88B 22.79% 4.26% 23.21% 3.90% 24.20% 3.53% Central Region 72.9% 72.9% 72.3% School FY'05 FY'06 FY'07 NYC Dept. of Education*: Where Professional Development Funds were Controlled $473.44M $575.79M $556.17M 25.41% 22.51% 24.18% Central 22.50% 19.85% 16.06% Region 52.1% 57.6% 59.8% School FY'05 FY'06 FY'07 * New York City Department of Education School Based Expenditure Reports. ** Percentage of school spending declined due to a large increase in debt service payments. 8

9 PER PUPIL SPENDING TRENDS: Fiscal Year 2005 through 2007 Distribution of Per Pupil Spending by Function Per Pupil Spending Direct Services: Classroom Instruction $6,963 $7,603 $8,151 $1,188 Instructional Support 1,622 1,828 2, Leadership and Support 1,235 1,270 1, Ancillary Support Srvcs 1,186 1,360 1, Building Services 896 1,029 1, Add to Sal/Proj Exp. ** (58) Total Direct Services $11,968 $13,119 $14,280 $2,312 Regional $372 $332 $322 ($50) Systemwide * $1,218 $1,693 $1,592 $374 Total Public Schools $13,557 $15,144 $16,195 $2,638 *Includes Systemwide Costs and Systemwide Obligations. ** All "Additions to Salary" were reported in District/Superintendency Costs prior to Totals may differ from sum of components due to rounding. Per Pupil Spending in Specific Functions Classroom Teachers Professional Development 5,479 5,917 6, Textbooks After School Programs