Testimony of

The United Federation of Teachers

Michael Mulgrew, President

Before the
New York City Council
Finance Committee

Hearing on the
Fiscal Year 2011 Executive Budget

June 7, 2010
Good afternoon Chairman Recchia and distinguished members of the Council. Thank you
for this opportunity to testify before you today about education funding in the city’s
executive budget.

My message today is simple: The fact that we successfully avoided teacher layoffs is a
big victory for our students, but there is still a great deal of work to be done to protect our
children and save our schools. That work will require dedication and commitment from
each and every one of us – not just educators, not just parents, but the community as a
whole. The UFT is ready and willing to do its part.

We are facing a budget gap of between $500 and $750 million dollars, and any student or
parent can tell you that cuts that deep will devastate our school communities. Letting
these cuts go forward would mean turning our backs on children in ways not seen in
generations. It would be shameful and wrong, especially when there are reasonable
alternatives on the table, including sensible ways to increase revenues and large potential
savings at the DOE’s central headquarters.

The projected 4% cut that schools are now bracing themselves for puts an exclamation
point on a period of significant disinvestment in our schools and brings the cuts since
fiscal year 2008 to 12%. Through April 1 of this year, the school system has lost just shy
of $2 billion through seven cuts since the midyear cut in fiscal year 2008. And while
some point out that the education budget rose steeply up until 2007, we should point out
that much of that increase went to DOE administration and management initiatives, not to
classrooms.

I want to be clear that the education of New York City children has already been hurt and
compromised by cuts that have been made in the last two years. The losses our kids have
already absorbed will only get worse in the fall if these latest cuts are allowed to stand.
By losses, we’re talking about programs and services that students depend on, including
everything from art, music and after-school programs to tutoring, college prep and
academic intervention services.

Over the last three years, we have lost more than 3,000 school-based educators through
attrition and last year’s hiring freeze, contributing to the rise in class sizes across the
board in each of the last three years. Five hundred school aides were also laid off.

In our budget survey last fall, we heard from hundreds of teachers whose class sizes had
grown larger (63% of the elementary and middle school respondents and 70% of high
schools). Their supply budgets were cut to zero, paraprofessionals and aides had all been
excessed, ELL and reading recovery classes had been eliminated, and after-school,
Saturday programs and Academic Intervention Services (AIS) were all cut way back.

Another 4% cut are gong to eradicate just about every service and program out there,
especially those that the neediest students depend on. Class sizes are also going to further
increase.
Now juxtapose that with the picture emerging from the Department of Education, where
spending is unchecked by any appropriate response to our dire fiscal situation. Just last
week, the Daily News found that 45 education department administrators and other non-
school staff got $340,000 in pay hikes. This is on top of $500,00 in pay increases in the
April management reshuffling that increased deputy chancellors from 3 to 8. Outrageous
to be sure, but it’s only the tip of a sizeable iceberg.

The UFT research department has done a large amount of work looking into headcount
and spending at the central DOE. While department representatives have often spoke
about cutting bureaucracy and redirecting the savings to schools, a review of the DOE
headcount changes shows how misleading those claims really are.

The department’s own figures show central office staffing jumped 30 percent under this
administration, with non-pedagogical departments such as assessment and accountability,
human resources, public affairs, and information technology growing dramatically. The
DoE legal department has nearly doubled in size in the last nine years, and financial
operations expanded from 174 to 267 during the same period.

Recently, the DOE has claimed a significant reduction in Full Time Equivalents (FTE’s)
in Central offices and “Field” services, but an analysis of the backup to their claims
shows the reductions are overstated. For instance, the DOE has testified that between
2008 and this school year, the administrative budget has been cut 20% and this “included
a headcount reduction of 550 positions in central and field offices and comes on top of
having redirected more than $500 million in savings to school budgets during brighter
economic times.” Additional testimony says that “since mid-FY08… we have eliminated
550 central and administrative positions”.

But the DOE’s own reporting shows they had 4,663 positions in Dec. 2007 (mid FY08)
in central administration and school support organizations. In April 2010 they had only
reduced this to 4,449; a reduction of only 214 positions. Only 21 positions were reduced
from central administration.

Further, the claims of “redirecting savings” from administration to schools are even more
misleading. For instance, between 2002 and 2008 the DOE claims there were changes in
headcount as follows:
 School based positions -- up 7% (8,661 positions)
 “Field” – (i.e. District Offices) -- reduced 52% (5,179 positions)
 Central positions -- reduced by 13% (362 positions)
 Facilities -- reduced 15% (292 positions)
 Food Services – reduced 2% (97 positions)

The central offices, what most people would think of as Tweed and 65 Court Street, was
reduced by an overall 362 positions, but that reduction includes a reduction of 258 school
lunch aides and a reduction of 266 low-paid clerical aides, clerical associates and
secretaries.
The so-called reduction in “Field” services is even harder to justify. The DOE claims a
reduction of 5,179 positions, but much of the reduction is simply a reclassification of
where people are budgeted. For instance, “field’ services show a reduction of 2,112
school secretaries and 4,209 school aides of 4,209 – and “School Based” positions show
increases of the same magnitude. These employees were always in the schools – they
were not moved or redirected there from district offices.

Closer review of the staffing changes also shows another pattern – increases in the
highest paid titles. In Central, while there was a reduction of about 100 principals and
AP’s assigned to Central, those headcount changes were greatly outweighed by an
increase of 220 managers such as Administrative Education Officers, Administrative
Education Analysts and Education Analysts, all titles generally paid over $100,000
annually.

In the “field” offices, there was a similar replacement of administrators – a loss of 63

principals and deputy superintendents was dwarfed by an increase of 152 Admin Ed
Analyst, 25 Admin Ed Officers, 42 Ed. Analysts, 29 Ed. Officers, 41 Local Instructional
Supervisors and 60 Research Assistants.

As for the reduction in “facilities”, it was not bureaucrats but skilled trades people like 57
carpenters, 60 electricians, 40 plumbers and 25 steamfitters. Due to the loss of the skilled
trades the work has to be done by outside contractors with no savings, as they are subject
to pay prevailing wages similar to the employees lost.

The dramatically larger headcount and higher salaries at Tweed is just part of the
problem, however. The amount of spending being done on non-essential initiatives and
outside consultants is also rapidly rising. Month after month, the Department has been
entering into more outside vendor contracts, many of them no-bid, even as classrooms
face starvation.

Some contracts are essential, to be sure, but many are just plain bad business during an
economic downturn. Consider the ridiculousness of paying $25 million to recruit new
teachers during a hiring freeze and with layoffs looming. Consider the $3 million being
paid to conduct “satisfaction surveys” in city schools. Consider the hundreds of millions
of dollars in computer consultant contracts. The list goes on and on.

Again, some initiatives are sound investments, but many others are not, and when our
classrooms are in danger of being cut so dramatically, everything should be on the table
for discussion. Cutting the big salaries, the excessive accountability initiatives, the
outside computer and technology consultants and other waste and nonessential services at
the central DOE would save the city millions.

I also want to note that classroom spending is trending down for the second year in a row.
Next year, classroom spending will make up just 40 percent of the overall DOE budget.
Even two years ago, classroom spending made up 45 percent of the DOE total. Chairman
Jackson put it best at the May 24 expense budget hearing, where he aptly characterized
the Department’s doomsday plans as “a blindfolded attack on school spending.”

By contrast, when faced with the city’s doomsday funding projections, the UFT stepped
up in several significant ways, just as we have consistently throughout our 50 year
history. We worked with the Municipal Labor Committee to create $200 million in
annual savings for the city through health care administrative savings, and we came up
with another $100 million a year when we made pension modifications. Just months
before those landmark agreements, busloads of members went to Washington to help
secure the federal stimulus funding that injected $1 billion into the state’s coffers.

While the economic challenges we face are clearly daunting, there are smart, appropriate,
practical solutions on the table that make drastic classroom cuts unnecessary. These ideas
come from all parts of our city, from parents, community organizations and educators.
There is a broad consensus that layoffs and budget cuts are not the solution.

For starters, the Mayor and the City Council have the power to use a portion of the city’s
estimated $3.5 billion surplus to offset reductions in state education funding. That money
comes courtesy of better than expected tax revenues, and the Mayor should be factoring it
in to his calculations.

What’s more, the city could save $200 to 400 million through a retirement incentive.
With over 25,000 of my members eligible for early retirement, thousands would no doubt
take advantage of one.

Looking beyond those two significant steps, the city could generate $1 billion a year
through a 1 percent tax surcharge on incomes exceeding $1 million. What the city doesn’t
need are more regressive taxes and fees. Temporarily taxing the wealthiest 5 percent of
New Yorkers is a fair and equitable alternative.

The city could also generate $1 billion a year by closing corporate loopholes and
improving tax compliance. Both the city Comptroller and the Daily News estimate that
billions were lost in uncollected business taxes and outstanding fines from parking and
city code violations. Recouping future losses would require the city to rehire the auditors
and collection staff the mayor furloughed earlier, but it will be money well spent.

And of course, we must continue to lobby the State for our fair share, and Congress for
the $23 billion dollar federal jobs bill now making its way through Congress. The Mayor
and I will be traveling to both Albany and Washington to personally make the case with
our elected representatives.

Bottom line: This story can have a reasonably happy ending, even with the economic
challenges facing our city. If the DoE puts its own house in order and the city embraces
the smart and sensible alternatives for both savings and revenues now on the table, we
can save our schools.
The Mayor and the Council must do the responsible thing here, because inaction will
have long-term – and unacceptable -- effects on the quality of education in our city. Our
kids will pay the price for years to come in the learning and opportunities they miss.

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