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IBO: Mayor’s Plan for School Budget Savings Overstates Need for
Probably the most well known piece of the Mayor’s budget plan for 2012 is the proposal to eliminate more than 6,166 teacher positions, 4,278 of them through layoffs and the remainder by not hiring new teachers to replace those that leave the school system. But an analysis by IBO indicates that the calculation of the savings cited by the Mayor and the Schools Chancellor from these reductions significantly overstate the number of layoffs needed to meet the budget target. Savings from attrition could be almost $104 million higher than the budget assumes, which would reduce the number of layoffs needed by more than 1,600 to achieve the same budget cut.
The Mayor’s Executive Budget for Fiscal Year 2012 calls for the city school system to operate with 6,166 fewer teachers next year: a cut of 5,778 teachers introduced by the Mayor during this year’s budget process plus another 388 teacher reductions that are still pending for 2012 from last year’s budget cycle. The 5,778 assumes 1,500 teachers will leave voluntarily and not be replaced (attrition) and that an additional 4,278 teachers will be laid off. The remaining 388 planned reduction appears to be through attrition. IBO has estimated the savings associated with these staffing changes and compared our estimates with those included in the Mayor’s Executive Budget.
The Mayor’s budget projects savings of $269 million from the layoff of 4,278 teachers, or an average of $62,879 per teacher, while the savings from not replacing 1,500 teachers who leave voluntarily is reported as $106.8 million, an average of $71,180. The difference between the two estimates is that the city will have to pay increased unemployment insurance premiums because of the layoffs, offsetting some of the savings.
The Bloomberg Administration’s estimates don’t reflect the fact that the salaries of teachers who leave voluntarily are likely to be higher than those who are laid off. Current law requires the school system to lay off the newest teachers first within teacher license areas (English, math, science, etc.). Given that teachers who voluntarily leave the city system will almost certainly include some higher paid teachers opting for retirement and that teachers being laid off would be drawn largely from lower salary levels, on a per teacher basis, the salary savings associated with attrition will be greater than those associated with layoffs. The city is assuming the same average salary of $54,000 for both types of teachers leaving the payroll.
Using data obtained from the Department of Education on the current and past pool of teachers in the city’s public schools, including their salary “step,” IBO did its own estimate of the amount that the city can expect to save from teacher attrition in the coming year, based on the final salaries of those who left the system at the end of the 2009-2010 school year. The method we used was straightforward. We began by identifying teachers who had been assigned to classrooms in the 2009-2010 school year but who did not have classroom assignments in 2010-2011. (In neither year did we include teachers identified as being in the Absent Teacher Reserve pool.)
Next, given that DOE has the discretion to exempt teachers in certain assignments from its reduction plan, we dropped math, science, special education, bilingual education and English as a second language teachers. These are either hard to staff positions or mandated services, so we assume that the DOE will fill these positions despite its reduction plan. We were left with 2,571 teachers who had worked in the school system in 2009-2010 and who had not returned this year—well above the level of attrition assumed in the Bloomberg Administration’s estimate. The teachers we identified had an average salary of $64,731, which is $10,731 higher than the average salary assumed by DOE. Once we add in the cost of fringe benefits for such teachers, IBO estimates that each teaching position lost through attrition saved the city $81,911.
Based on the number, salaries, and benefits of teachers in nonmandated or priority assignments who voluntarily left the system at the end of last year, IBO estimates possible savings of $210.6 million if teachers leaving the system this year are not replaced for the coming year, almost twice the savings the Mayor’s Executive Budget is assuming for next school year. If the attrition pattern from 2009-2010 holds, the additional $103.8 million in attrition savings could be used to reduce the number of teachers to be laid off by 1,651.
As a final check of our analysis and data, we estimated the amount of money that would be saved by the current plan to lay off 4,278 teachers. Using the same database as we used for the attrition analysis, we identified the 4,278 least senior teachers in assignments as of November 1, 2010. Our analysis confirmed the Mayor’s estimate of $269 million in savings to be realized from those layoffs.
For the system as a whole, whether the teaching force is reduced through layoffs or attrition matters less than the number of teaching positions that are ultimately lost. But for the teachers threatened with layoffs—and the schools most heavily staffed with recent hires—it obviously means a lot if the city could rely more heavily on attrition.