Midyear Budget Cuts Loom for NYC Schools With Decreasing Enrollment

NYC schools with student count shortfalls are facing funding cuts as the state tightens its budget amid expiring COVID relief and its immigration crisis.

Students walk to class at Yung Wing School P.S. 124 in New York on March 7, 2022. Michael Loccisano/Getty Images

For the first time in four years, New York City schools with enrollments that fall below projected numbers will have their budgets slashed come November.

Once the enrolment audits on Oct. 31 are complete, schools that fall short of projected enrolment will have to repay the New York City Department of Education DOE, while those that surpass expectations will receive increased funding.

The bleak prospect has been anticipated due to the city’s challenging financial circumstances with the increased costs from the immigration crisis and diminishing federal COVID-19 relief funds.

Dozens of recently arrived illegal immigrants camp outside of New York's Roosevelt Hotel, which has been made into a reception center, as they try to secure temporary housing in New York City on Aug. 1, 2023. Spencer Platt/Getty Images

The funding for most schools in New York City, known as Fair Student Funding (FSF), depends on the number of enrolled students and the specific needs they have.

Therefore, student enrollment has significant ramifications for public schools. Decreases in enrollment can result in reduced funding and the consolidation or closure of schools.

This controversial practice received widespread criticism last year when certain schools were liable to repay large sums to the DOE.

NYC Public Schools Funding

Over the past three school years, city officials had relied on federal funding to prevent midyear cuts and ensure schools were not affected if their student rosters were lower than the DOE’s projections.

Since the pandemic struck, the city had to resort to stimulus funds to hold schools harmless and maintain consistent individual school budgets, even with a dip in student enrollment.

Now, the DOE has stated that the stimulus funds are depleting, necessitating a revert to the pre-COVID budgeting policies.

“Temporary federal stimulus funding runs out in September 2024. This funding supports over $700 million in recurring expenses such as 3-K, Public Schools Athletic League (PSAL), the Arts, community schools, and social workers,” the DOE states.

“The State’s new class size mandate is expected to cost $1.3 billion annually by 2028, in addition to $30-$35 billion in facilities costs.”

Economic factors such as inflation and stock market downturns have also impacted the city’s tax revenue, leading to reduced funding for municipal services, including for schools.

On the other hand, mandatory expenditures such as Carter cases under the Individuals with Disabilities Education Act and benefits are skyrocketing.

New York City schools, already struggling from pandemic-related challenges, are dealt a significant blow with the re-implementation of midyear budget cuts.

On top of that, New York City’s resources and budgets are under immense pressure due to the influx of immigrants.

NYC Schools Face Significant Challenges

In September, Mayor Eric Adams issued a directive for all city agencies to reduce their budgets by 5 percent in November, followed by an additional cut of 5 percent in January 2024 and another 5 percent in April 2024.

This decision was made due to the financial strain caused by sheltering and supporting tens of thousands of asylum seekers and unvetted immigrants from the southern border since April 2022.

According to Mayor Adams, the influx of immigrants has resulted in a $12 billion budget deficit.

The mayor’s office announced that the upcoming budget cuts would focus on reducing expenses without resorting to layoffs.

Nevertheless, the savings plan might also incorporate a freeze on hiring that would prevent agencies from filling vacancies aimed at resolving the disruptions in certain operations and services within the city.

Mayor Eric Adams speaks during a press conference near the site of a parking garage collapse in New York on April 18, 2023. Michael M. Santiago/Getty Images

“Never in my life have I had a problem that I didn’t see an ending to, I don’t see an ending to this,” Mayor Adams said in a townhall meeting. “This issue will destroy New York City.”

“Desperate times calls for desperate measures, and these are desperate times,” said Chief Advisor Ingrid P. Lewis-Martin. “The federal government has all but abandoned New York City, and the state is not doing its fair share to assist New York City, which is managing a federal humanitarian crisis on a municipality’s budget. As a result, our administration has to make tough decisions.”

The announcement of budget cuts has sparked pushback from education officials.

A classroom at Yung Wing School P.S. 124 on July 22, 2021, in New York City. Michael Loccisano/Getty Images

Michael Mulgrew, the president of the United Federation of Teachers, said of the budget cuts, “It is unacceptable for NYC to cut funding to its public schools especially when the state has made such a strong financial commitment to our students.”

According to Jasmine Gripper, executive director of Alliance for Quality Education, the spending freeze, which extends from the state government, in the 2023-24 budget proposals will translate to limitations in access to education for New York children.

“In the face of growing student needs, flat funding from the State translates into fewer resources in our classrooms that students desperately need. New York has the responsibility and means to care for every child in the state, regardless of race, income, or immigration status,” Ms. Gripper said. “If revenue projections are falling short, we should balance the budget with a tax increase on the ultra-wealthy, not on the backs of children.

“We urge the State Education Department to ignore the Governor’s order, and prioritize students with a budget request that is based on meeting students’ needs, not reactive to political posturing,” she said.