DEPARTMENT

OF EDUCATION
FY09 Executive
Budget

Preliminary

June 23, 2008

FY09 Executive Budget Overview
The New York City Department of Education’s FY09 Executive Budget climbs to
over $21 billion in FY09, which is up $8 billion since FY02.

> $21.05 Billion in Total Funding

 Inclusive of Pension and Debt Service at $3.5
Billion
> Funding Sources
 City (includes intra-city funds): $10.5 Billion
 State: $8.7 Billion
 Federal: $1.8 Billion
 Other Categorical: $51 Million

2
 FY09 vs FY08 budgets by UA
The chart below highlights the year over year increase by UA.

FY08 and FY09 Budget as of FY09 Executive Budget

FY08 FY09 FY08 vs

FY09
Program Area UA's PS OTPS Total PS OTPS Total
GE Instruction & Schl Ldrshp 401/402 $5,413,807 $653,911 $6,067,718 $5,521,266 $720,226 $6,241,492 $173,774
SE Instruction & School Ldrshp 403/404 1,065,371 4,839 1,070,210 1,385,390 6,143 1,391,533 321,323
Regional & CW Instruc and Op Admin. 415/416 206,862 25,469 232,331 196,736 21,096 217,832 (14,499)
CW SE Instruction & School Ldrshp 421/422 672,582 24,615 697,197 685,656 23,415 709,071 11,874
SE Instructional Support 423/424 221,455 170,851 392,306 209,978 153,251 363,229 (29,077)
School Facilities 435/436 401,077 163,249 564,326 388,077 137,628 525,705 (38,621)
Pupil Transportation 438 1,016,525 1,016,525 1,068,988 1,068,988 52,463
School Food Services 439/440 188,415 198,593 387,008 188,167 221,473 409,640 22,632
School Safety 442 204,086 204,086 214,086 214,086 10,000
Energy & Leases 444 398,611 398,611 436,699 436,699 38,088
Central Administration 453/454 163,518 224,786 388,304 161,962 198,987 360,949 (27,355)
Fringe Benefits 461 2,153,146 2,153,146 2,283,441 2,283,441 130,295
SE Pre-K Contract Payments 470 622,650 622,650 653,496 653,496 30,846
Charter/Contract/Foster Care Payments 472 595,345 595,345 673,771 673,771 78,426
NPS and FIT Payments 474 63,894 63,894 60,673 60,673 (3,221)
Categorical Programs 481/482 1,251,927 671,278 1,923,205 1,279,509 636,074 1,915,583 (7,622)
Collective Bargaining 491 22,396 22,396 70,251 70,251 47,855
TOTAL (Excluding pensions/debt service) $11,760,556 $5,038,702 $16,799,258 $12,370,433 $5,226,006 $17,596,439 $797,181

$ in thousands 3
FY09 Executive Budget Overview
The Department’s budget is up almost $800 million in operating funds in FY09
bringing its total operating budget to $17.6 billion.

> New City Revenue = $243 million

 Net $129 million without the surplus roll adjustment of
$112 million and factoring in the decline of intra-city
funding of $2 million
 Increase is after Program to Eliminate the Gap (PEG)
> New State Revenue = $608 million ($644 with pension need
and charge-backs)
 Net $535 million without PreK, building aid funding and
charge-backs
> Other Categorical and Federal Revenue = -$53 million

4
 Despite New Funding, Budget Reductions
Are Needed
We understand it is difficult to comprehend why budget reductions are necessary
when we have millions in new revenue.
> Needs have outpaced our new revenues
> A large part of our new revenues are restricted and cannot be used
to cover our needs

NEW NYC SCHOOL REVENUES NEW NYC SCHOOL COSTS $809 million
in non-discretionary
Costs Increases
$129 million City
$664 $963
million million
$535 million State
$774 $154 million
million
in public commitments
GAP
$299m
and necessary improvements
to DOE operations

5
$963 million of Costs by UA
Below is a summary of the needs by UA. Details can be found in the appendix.
As you can see, most of these funds are going to schools.

UA UA Description Total
401/402 GE Instruction & Schl Ldrshp $ 364,923
403/404 SE Instruction & School Ldrshp 102,533
415/416 Regional & Citywide Instruc and Op Admin. 1,750
423/424 SE Instructional Support 92,397
435/436 School Facilities 5,003
438 Pupil Transportation 22,500
439/440 Food 10,000
444 Heat, Light, Power, Leases 10,000
453/454 Central Administration 33,793
461 Fringe 69,467
470 Special Ed PreK - Pass-thru 47,258
472 Charter Schools/School Age SE Contracts - Pass-thru 126,000
491 CB Reserve 48,000
NA Pension Set Aside for Formerly Reimbursable Funds 30,000
$ 963,625

$ in thousands 6
$299 million of Savings by UA
$299 million of savings were identified, of which $200 million were taken from non-
school budgets. Please note that 401/402 includes school budgets as well as
school supports and services that reside outside of school budgets.
401/402 GE Instruction & Schl Ldrshp
School Budgets (99,000)
Purchasing Efficiencies (25,000)
Deferred purchasing of hard-cover textbooks/phased-in implementation of new social studies curriculum (10,100)
Eliminate allocations for phase-outs (3,130)
Reduce ELL reserve allocation (maintaining commitment) (4,000)
Revise purchasing calendar by one week (10,000)
Capture uncollected food money (5,000)
Eliminate computer repairs for equipment older than 5 yrs (2,627)
Negotiated reduction in contracted computer support costs (515)
Increase response time for network harware maintenance (231)
Reduce NYC Early Literacy Learning program (181)
Reduction Children First Intensive funding (2,450)
Reduce Quality Reviews by transitioning in-house and changing frequency for some schools (1,300)
Reduce periodic assessments and associated professional development contracts (1,410)
401/402 (164,944)
415/416 Regional & CW Instruc and Op Admin. (6,949)
435/436 School Facilities (21,000)
439/440 Food (1,000)
453/454 Central Administration (24,538)
461 Fringe (10,000)
470 Special Ed PreK - Pass-thru (33,000)
472 Charter Schools/School Age SE Contracts - Pass-thru (12,000)
NA Revenue (14,000)
TBD Adjustments to budgeted allocations from OMB (12,000)
$(299,431)

$ in thousands – preliminary figures 7

 $299 million of Savings vs PEGs
The $180 million reduction in FY08 plus another $248 million reduction in FY09
totals to the $428 million PEG figure in the FY09 Executive Budget.

Since the Executive Budget, we have identified an additional $51 million to

generate $299 million in savings. Incremental
FY08 PEG PEG in FY09 PEG
FY09
School (part of $324 million PEG) $ (100) $ (80) $ (180)
Non-School (part of $324 million PEG) (80) $ (64) (144)
Non-School ($104 million PEG) $ (104) (104)
$ (180) $ (248) $ (428)

Incremental PEG in FY09 $ (248)

Proposed Savigs for FY09 $ (299)
Additional Savings to Fund Needs $ (51)

> Of the $51 million, over $30 million from non-school budgets
> Additional PEG of $215 million was reduced to $104 million
> Department was provided with over $104 million in new needs

$ in millions 8
 Promises Kept
The Campaign for Fiscal Equity settlement last year committed New York City to
contribute $2.2 billion over 4 years. As you can see from the chart below, we are
on track to meet this target by FY11.

Increase
FY07 FY08 FY09 FY10 FY11
Since FY07
City Operating Funds $6.8 $7.0 $7.3 $7.8 $8.4 $1.6
City Pension $1.6 $1.9 $2.1 $2.3 $2.3 $0.8
City Debt Service $1.1 $1.5 $1.1 $0.7 $1.4 $0.2
Total City Funding $9.5 $10.5 $10.5 $10.8 $12.1 $2.6

> City operating funds include all PEGs

> City operating funds assume all new expenses are self funded so expenses
equal revenues

$ in billions and as of the FY09 Executive Budget 9

Appendix

•Details on $963 million of Needs by UA

•Details on $299 million of Savings by UA and PEG
•$963 million = $809 million vs $154 million
•School Budget Process

10
 Details on $963 million of Needs by UA
UA Need Total
401/402 Collective Bargaining $ 191,440
401/402 Support School Phase-outs and Closures 30,000
401/402 School Level Funding for Fair Student Funding Student Attributes 26,700
401/402 Incentive Pay for UFT Members 25,000
401/402 School Reserve (special ed and other adjustments) 20,000
401/402 New Schools 13,000
401/402 Principal Training 10,000
401/402 Scoring of ELA/Math Exams 10,000
401/402 Multiple Pathways to Graduation Expansion 6,588
401/402 PreK Full Day Expansion (including custodial costs) 5,000
401/402 OMS (scanning project) 5,000
401/402 School Funding for Transfers 4,000
401/402 Children First Intensive (previously privately funded) 2,784
401/402 ELL Summer School Funds 2,000
401/402 CSA Bonus 2,000
401/402 Additional G&T Classes 2,000
401/402 Out of School Time Expansion 2,000
401/402 Assessments (Science, Summative and Periodic) 3,388
401/402 Miscellaneous Needs Under $1 million each (e.g. translation funding, vision screening, dual language books) 2,023
401/402 Fitnessgram 1,000
401/402 New schools onto HSST system 1,000
$ 364,923

$ in thousands 11
 Details on $963 million of Needs by UA
– cont’d
UA Need Total
403/404 CTT Growth $ 64,390
403/404 Self Contained and SETSS SPED Growth 19,700
403/404 Collective Bargaining 13,043
403/404 Autistic Spectrum Disorder Expansion 5,400
$ 102,533
415/416 Collective Bargaining $ 1,750
421/422 Collective Bargaining 22,125
423/424 Related Services $ 50,000
423/424 Medicaid Revenue Shortfall 17,000
423/424 Collective Bargaining 3,143
423/424 Miscellaneous Needs Under $1 million each (e.g. translation funding, vision screening, dual language books) 130
$ 70,273
435/436 Facilities $ 5,000
435/436 Collective Bargaining 3
$ 5,003
438 Transportation $ 18,000
438 GPS 4,500
$ 22,500
439/440 Food $ 10,000
444 Heat, Light, Power, Leases $ 10,000

$ in thousands 12
 Details on $963 million of Needs by UA
– cont’d

UA Need Total
453/454 OSEPO Enrollment RFP $ 9,000
453/454 Per Diem Arbitrators to clear backlog of Administrative Trials Unit Cases and TPU attorneys 6,000
453/454 Miscellaneous Needs Under $1 million each (e.g. translation funding, vision screening, dual language books) 5,387
453/454 Special Ed System (SESIS) 5,000
453/454 Other IT 3,400
453/454 Talent Initiatives 2,290
453/454 CEC Elections 1,940
453/454 Collective Bargaining 496
453/454 Assessments (Science, Summative and Periodic) 280
$ 33,793
461 Fringe $ 69,467
470 Special Ed PreK - Pass-thru $ 47,258
472 Charter Schools $ 70,000
472 School Age SE Contracts - Pass-thru $ 56,000
491 CB Reserve $ 48,000
NA Pension Set Aside for Formerly Reimbursable Funds $ 30,000

$ 963,625

$ in thousands 13
 Details on $299 million of Savings by UA and
PEG
UA Cut Total Cut PEG Additions PEG Title
401/402 General Education and School Leadership
Capture uncollected food money (5,000) (5,000) Food Efficiencies
Deferred purchasing of hard-cover textbooks and phased-in
(10,100) (10,100)
implementation of new social studies curriculum
Eliminate allocations for phase - outs (3,130) (3,130) - Hiring Freeze and Other Administration
Eliminate computer repairs for equipment older than 5 years (2,627) (2,627) School Based DIIT
Eliminate NYC Early Literacy Learning family literacy program (181) - (181)
Increase response time for network hardware maintenance (231) (231) School Based DIIT
Negotiated reduction in contracted computer support costs (515) (515) School Based DIIT
Purchasing efficiencies (25,000) (23,000) (2,000) Purchasing Efficiencies
Reduce Children First Intensive funding (2,450) (2,450)
Reduce ELL reserve allocation (maintaining commitment) (4,000) (5,000) 1,000 Reduce ELL Reserve Allocation
Reduce periodic assessments and associated professional
(1,410) (1,000) (410) Periodic Assessment
development contracts
Reduce Quality Reviews by transitioning in house and changing
(1,300) - (1,300)
frequency for some schools
Revise purchasing calendar by one week (10,000) (10,000) Reduction in OTPS Expenditure
415/416 Regional and CW Instructional and Op Administration
Other PS field reductions (335) (335) Hiring Freeze and Vacancy Reduction Program
Reduce staff across Integrated Service Centers (5,792) (5,000) (792) Central & Field Administration
Restructure family engagement support staff (821) (821) Hiring Freeze and Vacancy Reduction Program

$ in thousands 14
 Details on $299 million of Savings by UA and
PEG – cont’d
UA Cut Total Cut PEG Additions PEG Title
435/436 School Facilities
Facility Efficiencies/Repairs & Maintenance/Facility
Infrastructure and facilities reductions (21,000) (20,000) (1,000)
& Infrastructure Reduction
439/440 Food
Reduce staff at small (less than 100 meals served/day) summer
(1,000) (1,000)
school sites
453/454 Central Administration
Convert contracted DIIT consultants to full-time employees (500) (500) Hiring Freeze and Other Administration
Decrease the number of contracted IT consultants and consultant
(1,980) (1,980) Hiring Freeze and Other Administration
overtime spend in Applications group
Deferred bandwith upgrades to schools (4,500) (4,500) - School Based DIIT
Eliminate educational housing contracts (385) (100) (285) Central & Field Administration
Other PS/OTPS cuts across Central Offices (11,059) (11,059) Central & Field Administration
PBX (phone) maintenance costs shifted to central offices (100) (100) Central & Field Administration
Reduce cost of admissions publications (1,193) (1,190) (3) Central & Field Administration
Reduce funds for LEARN internship program (750) - (750)
Reduce HRA (Human Resource Assistants) spend (225) (225) - Central & Field Administration
Reduced contracted advertising spending for teacher recruitment (500) (500) Hiring Freeze and Other Administration

Reductions to NYC Teaching Fellows cohort, tuition and stipends (2,747) - (2,747)
Savings from telecom vendors through re-negotiated rate
(600) (600) Central & Field Administration
reductions

$ in thousands 15
 Details on $299 million of Savings by UA and
PEG – cont’d
UA Cut Total Cut PEG Additions PEG Title
461 Fringe
Fringe savings (estimate based on staff reductions) (10,000) (10,000) Fringe
470 Special Ed Pre - K - Pass-thru
Cash management efficiencies (33,000) (33,000) - Lower Accrual Reserve
472 Charter Schools/School Age SE Contracts - Pass-thru
Cash management efficiencies (12,000) (12,000) - Lower Accrual Reserve
Other
NA Improved revenue claiming operations (14,000) (14,000) Revenue
TBD Adjustments to budgeted allocations from OMB (12,000) (12,000)
Grand Total of Non School Cuts (200,431) (166,413) (34,018)

General Ed Instruction and School Leadership

401/461 (99,000) (81,724) (17,276)
Grand Total of School Cuts (99,000) (81,724) (17,276)

Grand Total (School + Non School Cuts) (299,431) (248,137) (51,294)

$ in thousands 16
$963 million - $809 million vs $154 million
$809 million
Increased Staff Costs $ 381,467
Collective Bargaining 232,000
Fringe 69,467
CB Reserve 48,000
Pension Set Aside for Formerly Reimbursable Funds 30,000
CSA Bonus 2,000

Pass-throughs Special Education School Age, Special $ 173,258

Education PreK Contract Schools and Charters
School Age SE Contracts - Pass-thru 56,000
Special Ed PreK - Pass-thru 47,258
Charters 70,000
Special Education Growth (related services, classroom $ 151,090
growth)
Related Services 50,000
CTT Growth 64,390
Self Contained and SETSS SPED Growth 19,700
Medicaid Revenue Shortfall 17,000

$ in thousands 17
$963 million - $809 million vs $154 million
$809 million – cont’d

School Funding and Programs $ 56,700

Support School Phase-outs and Closures 30,000
School Level Funding for Fair Student Funding Student
26,700
Attributes

Transportation, Facilities, Food, Leases and Energy $ 43,000

Transportation 18,000
Facilities 5,000
Food 10,000
Heat, Light, Power, Leases 10,000

Out of School Time Expansion $ 2,000

CEC Elections $ 1,940

Total $ 809,455

$ in thousands 18
$963 million - $809 million vs $154 million
$154 million
Increased Staff Costs $ 25,000
Incentive Pay for UFT Members 25,000
School Funding and Programs $ 72,980
School Reserve (special ed and other adjustments) 20,000
New Schools 13,000
Scoring of ELA/Math Exams 10,000
Multiple Pathways to Graduation Expansion 6,588
Autistic Spectrum Disorder Expansion 5,400
School Funding for Transfers 4,000
Assessments (Science, Summative and Periodic) 3,668
Children First Intensive (previously privately funded) 2,784
Miscellaneous Needs Under $1 million each (e.g., translation
7,540
funding, vision screening, dual language books)

Necessary Investments in IT Projects $ 28,900

Special Ed System (SESIS) 5,000
GPS 4,500
OMS (scanning project) 5,000
Fitnessgram 1,000
Other IT 3,400
OSEPO Enrollment RFP 9,000
New schools onto HSST system 1,000

$ in thousands 19
$963 million - $809 million vs $154 million
$154 million – cont’d
Leadership and Staff Development $ 12,290
Talent Initiatives 2,290
Principal Training 10,000
Cost Avoidance Initiative $ 6,000
Per Diem Arbitrators to clear backlog of Administrative Trials
6,000
Unit Cases and TPU attorneys
PreK Full Day Expansion (incl custodial costs) $ 5,000

Additional G&T Classes $ 2,000

ELL Summer School Funds $ 2,000

Total $ 154,170

$ in thousands 20