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NYC's New Budget and Kids


New York City's new budget, which went into effect July 1st, has real goodies for kids in it, for the first time in years. Some examples:

  • $20 million to the Board of Education to put gym classes back into elementary schools for the first time in 25 years, when they were eliminated during the 1975 fiscal crisis.
  • $25 million for construction of new day care centers
  • $34 million to expand, by 15 percent, the Department of Health's Early Intervention program for at-risk infants.

    "We started in the seventh circle of hell and six or seven years later we're in a city that has a completely different view of its obligation to children and families," says Gail Nayowith, executive director of the Citizens' Committee for Children, a group that lobbies City Hall on behalf of kids. "There's still a long way to go - it's not a perfect situation, but it's significantly better than it was for children and the people who care for them."

    New York City children can thank the robust economy. A large percentage of the $2.9 billion surplus in city coffers comes from income taxes on Wall Street bonuses. Overall, the new City expense budget, which runs from July 1, 2000 to June 30, 2001, increases City spending by $1.3 billion, to over $26 billion, according to an analysis by the Independent Budget Office, a government agency that provides non-partisan information on the City budget to the public. And a sizable portion of the budget is going to children's programs. According to figures provided by the Independent Budget Office and the Citizens' Committee for Children, nearly 20% of the increase, or about $256 million of the City's money, is earmarked for programs that directly benefit children, including tens of millions for summer school, for extended-day programs at the City's lowest performing schools, for new health initiatives and for child welfare services. This tally omits major institutions that kids use extensively but not exclusively, such as the Department of Parks and Recreation, the libraries, and the Department of Cultural Affairs. Kids also come out ahead in the City's four-year capital plan. The plan calls for $24.9 billion in investments over Fiscal Years 2001 - 2004. A whopping 22% of this budget is devoted to school construction. Only a package of environmental protection projects claims a larger share of the capital budget. For all the good news, the budget still contains major disappointments for frontline child advocates. Mike Arsham, for one, wishes the City had done something to address the huge disparity at the Administration for Children's Services between the amount spent on removing children from their homes and the amount spent on services to make removals unnecessary. The City added only $4.4 million for preventive services to a $2 billion child welfare budget. Arsham, director of the Child Welfare Organizing project, says, "Time and time again what we're saying to families is we know what you need, but all we have to offer is foster care placements." And Nayowith was happier before the New York State legislature got its hands on the City budget in late June. The City Council and Mayor Rudolph Giuliani wanted to give low-income New Yorkers a $73 million package of earned income and child care tax credits, but the legislature, which has final say on such matters, rejected the plan. "That would have been the best case scenario," Nayowith says of the budget before the legislature killed the tax package. "You would have seen strategic investment, and then you would have seen, through the tax system, some very enterprising ways of helping families. We're now in the next best scenario, where the mayor and the City Council did a very god job of thinking about the best way to take care of kids."

    Peggy J. Farber is freelance journalist specializing in children's issues. Her reporting on conditions of NYC children has appeared in City Limits Magazine as well as on National Public Radio.

A Trust Fund For America


From The Wall Street Journal, June 16, 2005

By FELIX ROHATYN
June 16, 2005; Page A16

 

Thomas Jefferson committed the U.S. to acquire the Louisiana Territory from France for $15 million. In so doing he doubled the size of the U.S., guaranteed navigation on the Mississippi, and opened the American West. But Jefferson, Madison, and Congress were understandably worried about the size of the commitment. After all, total revenues from import duties then were only $12,280,000. Nevertheless, Congress approved the purchase and the greatest investment in American history was completed when a British bank and a Dutch one underwrote the bonds required to pay Napoleon on schedule. In doing so, they were confirming America's creditworthiness and recognizing the huge present and future value of the assets acquired by America.

Under today's budget rules, the Louisiana Purchase would have been regarded as a budget-buster and the Congress might well have turned it down. As a result, Jefferson might have had to go to war with France to accomplish the same purpose, an alternative that was under consideration at the time. This may be an extreme example, but it illustrates a much-overlooked reality -- borrowing for investments is different from borrowing for recurring expenditure and should be treated as such. This fundamental reality is sadly missing in the current debate about deficits and economic policy.

The partisan crossfire over deficits has two poles -- the one marked out by Vice President Dick Cheney's remark that "deficits don't matter" -- and the position associated with former Treasury Secretary Robert Rubin, that current deficits are unsustainable and that drastic spending and tax changes are urgently required. Both sides are likely to remain firmly entrenched in their respective positions, despite the risk of a dollar crisis if current policies are continued over the next few years. However, regardless of which side of this debate you subscribe to, an even more fundamental crisis could grip our economy if we turn away from the investments that determine our future standard of living. We risk balancing the budget but leaving our long-term growth needs unmet.

Public investment has, by tradition, meant infrastructure: Roads, trains and bridges, public transportation, schools, etc., have provided the private sector with the complementary investments that improve business productivity and improve our standard of living. Largely the product of a federal-state-local partnership, it has been badly neglected over the years. A biannual "balance sheet" provided by the American Society of Civil Engineers, grading the categories of infrastructure from schools to sewers, indicates a need for $1.6 trillion over 5 years to bring national infrastructure up to reasonable standards; that need increases by $300 billion every two years.

In addition to traditional physical capital, an even more important component of our infrastructure is our intellectual infrastructure. In the last two years, Arnold Schwarzenegger has asked his legislature for $3 billion to finance stem-cell research and Jennifer Granholm has asked hers for authority to sell $2 billion of Michigan state bonds to finance research aimed at improving the competitiveness of its auto industry. By doing so, Govs. Schwarzenegger and Granholm are doing what the private sector does daily -- financing R&D. Corporate America does this mostly by equity; the governors, lacking the ability to issue stock, propose to do this with state debt. That is entirely appropriate. We cannot compete with China by making cheaper T-shirts or forcing them to revalue the yuan by 10%. We can only do so by fighting tooth and nail for supremacy in education, intellectual capital and R&D, and both the federal government and the States must play a role in that fight.

In 1865, when Lincoln created a system of land grant colleges (which ultimately totaled 213), he initially provided America with 75% of its engineers; when FDR proposed the GI Bill, he allowed millions of young Americans who would not have had a college degree to become the source of our technical and industrial power. Through the years, the Bill has provided $70 billion in aid to veterans. Can anyone doubt that the investment has been returned manyfold? Eisenhower continued the tradition of federal involvement in infrastructure with the Federal Aid Highway Act, which generated millions of jobs and created a suburban economy now basic to the U.S., with enormous incremental value.

Not much of this found its way onto a federal balance sheet. The budget does not recognize assets; it only recognizes expenditures and liabilities. The Louisiana Purchase would have been reflected by the debt issued to Napoleon and have resulted in a large deficit. Land grant colleges and the education of GIs were treated as simple expenses. It is bad enough to try to deal with large and growing deficits created by ongoing expenditures, but the process will produce even worse choices if important, albeit intangible, assets are carried as liabilities.

A federal capital budget would help correct this problem, but would be so fraught with political difficulties that it is not worth the attempt. Yet there is a recent development which suggests a remedy: the return of the 30-year Treasury bond. Long-term bonds should finance capital assets and their issuance should be dedicated to that purpose. Even longer maturities than 30 years can be envisaged; corporations and governments have issued up to 50-year bonds.

To help deal with our shortage of public capital investment, the Congress should authorize a trust fund of up to $100 billion, to be financed over a five-year period by special 50-year Treasury bonds created for that specific purpose. The fund should be used to co-finance high priority state and local investment programs, including physical infrastructure and projects to create intellectual property. Tight outside controls will be applied to the operations of the fund, and it should also be subject to the federal debt limit.

In addition to cutbacks on infrastructure, globalization puts pressure on domestic employment. This impacts heavily on certain industries like the auto industry, and on the states where they are concentrated. An infrastructure trust fund could be helpful in making investments on a regional basis where appropriate. Creating such a fund would also allow us to redesign programs that deliver these investments, balancing new construction with more effective life-cycle management. A special commission under the aegis of the Center for Strategic and International Studies is rethinking program delivery and should provide new directions soon. In the meantime it is counterproductive to starve long-term investment because of presently excessive recurring spending; over the long run it only makes our economic challenges worse by slowing the creation of national wealth.

Jefferson, Lincoln, FDR and Eisenhower proved that public investment could generate vast returns. The federal budget should be a tool to encourage national investment instead of writing it off. Let us adopt a different perspective of our national wealth and how to increase it.

Mr. Rohatyn is chairman of the CSIS Commission on Public Infrastructure.

 

 

A Bloomberg-Era Reform Worth Saving?


bloomberg-walcott-tisch

In the waning days of the Bloomberg administration, when many of the mayor’s controversial education ideas are once again under attack, one chief target of critics has been the school network structure, which broke up the geographically organized school districts and allowed principals to self-select into one of about 60 support organizations.

These days, just about everyone from the principals’ union (the Council of Supervisors and Administrators) to Merryl Tisch, Chancellor of the NY State Board of Regents, to Mayor-elect Bill de Blasio are targeting the networks for elimination. Tisch recently charged that the networks have “basically failed children” who are English Language Learners and have special needs. Last January, de Blasio said: “I am dubious about whether this current network structure can be kept.”

But now, a group of 120 principals has issued a plea, in the form of a letter, in support of the network structure. The letter, which is reproduced below, was sent to Mayor-elect de Blasio, the UFT, the CSA, Schools Chancellor Dennis Walcott and Shael Polakow-Suransky, the Senior Deputy Chancellor last Friday.

It says the networks offer the following supports, which were not “necessarily” provided through other more traditional structures at the Department of Education:

1. The gathering of schools of similar visions or purpose: the internationals, special ed reform focused, collaboratively structured, and schools committed to alternative assessment. This enables these schools to work more closely together and support each other towards better meeting their missions.

 

2. Shifting the supervisory structure into an advisory and support structure. It makes all the difference in the world that the network leader and team members are not the principals’ rating officer. Our networks have been responsive to us and in many cases network principals have had a say in the selection of network staff.

3. Networks support professional development that better meets the needs of the teachers, administrators, and other support staff in our schools and that allows for cross-pollination across our schools.

4. Because of racial and economic segregation by neighborhood in New York City, geographic districts are often segregated as well. Self-selected networks offer the option of racially and economically diverse schools working together and benefitting greatly from this collaboration.

The networks go to the heart of what might be the most important education initiative of the Bloomberg years: An effort to turn principals into educational leaders by giving them both greater autonomy and support in exchange for increased accountability. Under the network structure, principals were no longer just accountable to superintendents. The networks represented a countervailing power designed to support principals—and, through them, the needs of students in each individual school—by providing information and advice on everything from budgets to professional development. Principals could—and did—vote with their feet if they were unsatisfied with the services they got from their networks.

Continue reading on Andrea Gabor's website



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