Long Island schools: Where taxpayers' money goes

Administrative costs in Long Island's 124 public school districts for the current academic year now top $1 billion, and total expenses — including teachers, student programs and infrastructure — are approaching $13 billion, a Newsday review of state-mandated budget figures finds. 

School spending in Nassau and Suffolk counties has substantially outpaced inflation since New York's property tax cap took effect in 2012-13, with overall expenses up nearly 18 percent and administrative expenses up 16 percent. In contrast, the national Consumer Price Index, which measures inflation, has risen 10 percent during the same time frame.

One focus of the review was administrative overhead, a longtime target of taxpayer advocates and others who contend that the sheer number of the Island's school districts and other local government entities leads to duplication and waste. Newsday looked at administrative costs not only for districts' central offices but for individual schools, a multiyear examination involving more than 8,000 calculations. 

Analysis found that such spending represents a significantly larger share of district budgets than is often recognized publicly, even by financial analysts. In addition, such expenses can vary widely — by as many as 30 percentage points — from one district to another.

Efforts to contain school costs and the high taxes that go with them intensified this month when lawmakers in Albany agreed to permanently extend the state's cap system, which limits taxation by school districts and municipalities.

The system, one of Gov. Andrew M. Cuomo's signature initiatives, is aimed in large part at containing school spending, which on Long Island accounts for more than 60 percent of property-tax bills. The cap sets a baseline of 2 percent or the CPI inflation rate, whichever is lower, on annual hikes in tax levies.

To give taxpayers who foot the bills a clearer picture of public school costs, Newsday for the first time collected data from all Long Island districts showing the breakdown of money spent in three major buckets: administrative costs; student programs, including instructional costs; and capital expenses.

Those three cost categories are defined under state education law, which requires that districts each year provide property owners with a “three-component budget” drawn from their proposed spending plans for the coming school year, before votes on the school budget and school board. District residents soon will receive this information based on their system's proposed 2019-20 budget, before this year's vote on May 21.

Here's the Islandwide breakdown of figures for the current school year:

•  Administrative costs — including salaries of superintendents, principals and other administrators, school board expenses and most legal fees — represent 10 percent of overall spending in the Nassau-Suffolk region. Dollars spent on administration Islandwide total $1.28 billion. 
• Program costs — including regular instruction, special education, extracurricular activities, sports and busing — make up 77 percent of spending. Total dollars spent are $9.87 billion. 
• Capital costs — including school-building operation, maintenance and borrowing costs for construction and renovation — constitute 13 percent of spending. Total dollars spent are $1.67 billion.

Even in an era of tax caps, the Island's school districts have managed to keep spending at relatively high levels, these numbers indicate. One major reason is that state government, with Cuomo's backing, has maintained a flow of financial support for school operations. In the coming school year, this state aid will top $3 billion in the Nassau-Suffolk region alone. 

"On education, we should be very proud of the amount of money we spend," the governor said in his January budget address, citing state-by-state comparisons from 2016-17. "We spend the most money per pupil in the nation. We spend two times the national average."

Generous spending, for most schools, translates into high-quality programs and services for students, a point that education leaders like to emphasize. 

At a February forum in Westbury, a veteran school superintendent, Joseph Famularo, ran through a familiar list of benchmarks showing how the region's schools excel when compared with other schools across the state and nation: high graduation rates, high passing percentages on college-level Advanced Placement tests, dozens of prizewinners in the national Regeneron science research competition.  

"I would say over the last few years, we have been provided support," Famularo acknowledged later when asked if state aid has been a factor in schools' success.

He added that he and his colleagues would continue pressing for a larger share of state money. School leaders contend that state and federal governments have a particular obligation to fund public schools, because they impose mandates for programs such as special education that require big expenditures.  

"The issue is that we're partners with the state now, and we're relying more on state aid. We're very dependent," said Famularo, who is the schools chief in Bellmore and a past president of the Nassau County Council of School Superintendents.

The call for more state funding is echoed by education lobbies in Albany — representing teachers, parents and administrators — which assert that boosts in statewide support should be doubled from about $1 billion to $2 billion annually. Such arguments don't go down well with taxpayer advocates, who note that New York already ranks No. 1 among states in funds allotted.

In 2016-17, New York spent an average $23,265 per student, the highest amount for any state, according to figures provided by the National Education Association, a national teachers union. 

"How many years have we heard the same story? It's never enough, and it will never be enough, until taxpayers get tired of being taken advantage of," said Andrea Vecchio of East Islip, founder of a local TaxPac group. She also is active with Long Islanders for Educational Reform, a regional taxpayer organization.

On the issue of administrative costs, Newsday's examination found that the share of school dollars going to this funding bucket Islandwide averages about 10 percent of total spending. That percentage has remained consistent over the years Newsday reviewed, starting in 2012-13. 

In contrast, annual reports published by the state Education Department indicate that administrative costs on the Island constitute less than 2 percent of total expenditures. The state's data, however, covers only "central" administration — that is, the activities of superintendents and their headquarters staff — and is much narrower in scope than the districtwide administrative expenses reported by local systems in the annual budget notices required by law.

Districtwide administration can vary widely between individual districts, Newsday found. Variations ranged from more than 14 percent of total costs in such districts as Miller Place, New Suffolk, Roslyn and Sagaponack, to less than 8 percent in Bayport-Blue Point, East Moriches and Great Neck, among others.

New Suffolk's administrative costs represented more than 40 percent of overall expenses, according to Newsday's calculations — by far the highest figure on the Island. 

School officials in New Suffolk and Sagaponack, both located on the East End, cited the tiny size of their districts as a major reason why administrative costs run high, proportionately speaking. Sagaponack, with its one-room building known as the "Little Red Schoolhouse," enrolls 15 students in kindergarten through third grade; New Suffolk enrolls 17 in prekindergarten through sixth grade.

Alan Van Cott, who doubles as Sagaponack's part-time superintendent and principal, noted that his district must have secretarial and clerical workers, just as larger systems do, though on a smaller scale. 

"We couldn't run on 10 percent," Van Cott said. 

Tony Dill, the school board president in New Suffolk, said the issue of administrative costs had not been raised in his district, and parents seem happy with the high level of personal attention their children receive.

"I think that kids get a superior education," said Dill, who added that the unusually high administrative numbers recorded for his district might have stemmed in part from a clerical mistake.  

Miller Place and Roslyn are both mid-sized districts with enrollments of about 2,600 students and 3,100 students, respectively. 

A representative for the Miller Place district said that figures indicating the district spent more than 16 percent of its budget on administration this year stemmed from an accounting error. The actual figure was slightly over 11 percent and would be corrected, the representative said. 

Roslyn's allocations for administration represented more than 14 percent of total spending during the current school year, and ranged above 15 percent for some of the years covered by Newsday's study.  

Joseph Dragone, the district's assistant superintendent for business and administration, said expenses there reflected, in part, the temporary assignment of an extra administrator to one elementary school to look after student safety during a reconstruction project. 

Dragone added that cost comparisons were inexact because individual districts exercise a degree of discretion in how they account for certain expenses. For example, he said, some legal fees were counted as administrative in nature, while others were associated with student programs such as special education.  

"I try to be as transparent as possible and ascribe most legal costs to administration," Dragone said. "Some districts may not do that."

On the other end of the spectrum, East Moriches is spending slightly more than 5 percent of its budget on administration this year. Superintendent Charles Russo said the district has worked to keep overhead costs lean since 2005, when a $3 million gap between expenditures and revenues was discovered and Russo was brought in to help straighten out finances. East Moriches enrolls 750 students in kindergarten through eighth grade. 

"Ever since, there's been a real effort to make sure the lion's share of spending goes to the instructional program," Russo said.

In Great Neck, retirements and departures by principals in recent years, and their replacement by others at lower salaries, have helped hold down administrative costs, said John Powell, the district's assistant superintendent for business. In addition, the system has eliminated two administrative positions by combining assignments, he said.

Powell noted that Great Neck has added only one administrator in the past dozen years even as enrollment has risen by 366 students during that period. The district's total enrollment is 5,565 in kindergarten through 12th grade.

"So yes, we have kept our administrative expenses just below 8 percent of total costs during that 12-year period," Powell said.  

One aspect of administrative spending that has attracted the attention of politicians and the public are superintendents' salaries and benefits. Cuomo, in the early days of his administration, once famously joked during a major speech that he had applied for the job of a certain Nassau County schools chief who made more money than he did. 

Islandwide, annual compensation this year for individual superintendents reached a median $300,000, including $250,000 in salaries alone. Figures are provided annually by the state Education Department under a law requiring release of payments for top administrators in every district.

"It's a lot of money for one person to make — more than that paid to the county executive in either of our two counties," said Michael Dawidziak, a pollster and political consultant based in Sayville, commenting on why districts' administrative expenses are controversial. "I think resistance will always key in on money not used directly for kids' educations."

Outrage over administrative costs has prompted dozens of government studies, some indicating that large-scale mergers of school districts on the Island and elsewhere could eliminate scores of administrative positions.

Financial analysts point out, however, that district consolidations have proved a hard sell with voters in recent years, and that the amount of money involved represents a relatively small share of overall spending.  

E.J. McMahon, research director of the Empire Center for Public Policy, a conservative Albany think tank, estimated that per-pupil costs of general school administration average $582 in Nassau County. In contrast, he said, per-pupil costs of instructional wages and benefits average $14,976, based on 2012 figures from the U.S. Census Bureau. 

"Don't be distracted by the superintendent's high salary and the large number of school districts and assume that those are the major culprits behind your tax bill, because they're not," McMahon said. "As a political and practical matter, anybody who concentrates on trying to consolidate school districts is just wasting their time." 

With that in mind, some school organizations are pushing for cost-cutting measures on a broader scale. A particular target is the Triborough Amendment, a provision of state labor law adopted in 1982 that allows public employees to retain all benefits in their union contracts even when those agreements have expired and are being renegotiated.

This means, for example, that teachers and other unionized school employees continue to receive annual pay raises built into contractual schedules, commonly called step increases, even when those contracts expire.

The New York State School Boards Association, representing more than 700 boards statewide, has called for changing the law to halt payment of step increases upon contracts' expiration. Under that approach, teachers would retain health insurance and other benefits.

The school boards association contends the current law gives unions an unfair negotiating advantage because "there is little incentive for re-negotiation of an expired contract" when step payments continue to flow automatically. 

Teacher unions respond that abolition of automatic step increases would put them at a disadvantage because they face potential financial penalties under state law if they go on strike. 

Matt Hamilton, a spokesman for New York State United Teachers, which represents more than 600,000 teachers and others statewide, said in an emailed statement: "The Triborough Amendment is an important law that ensures hardworking men and women who are prohibited from striking will continue to receive fair salaries that reflect their hard work and high levels of expertise and education as they negotiate in good faith for a new contract."