New York City spends $36.9 billion—more than one-third of its annual budget—educating children. CBC’s new brief, School Spending, Enrollment, and Fiscal Cliffs 101: The NYC Department of Education Budget Before, During, and After the Pandemic, finds that spending per student increased 47 percent, to $37,136, between fiscal years 2016 and 2022, and is likely to increase another 18 percent, to nearly $44,000, by 2026, once the costs of likely employee raises are included.

Per-student spending during the pandemic (between fiscal years 2020 and 2022) increased 19 percent due to an infusion of $3.0 billion in federal COVID-19 pandemic aid and an enrollment decline of 90,000 K-12 Department of Education (DOE) students. As federal pandemic aid is exhausted, total spending declines slightly in fiscal years 2023 and 2024, before resuming growth in the subsequent years.

CBC’s brief examines DOE spending, funding, and enrollment trends for fiscal years 2016 through 2026. It further finds:

• DOE spending grew 4.8 percent annually between fiscal years 2016 and 2022, to $37.6 million, including the agency operating budget plus benefits and debt service allocated centrally, with 30 percent of that growth due to federal pandemic aid;
• The fiscal year 2024 budget is projected to decrease by $401 million to $36.5 billion, primarily due to a $243 million decrease in federal pandemic aid;
• Spending growth resumes in fiscal year 2025 and is budgeted to reach $37.3 billion in fiscal year 2026, without the benefit of federal pandemic aid; costs for likely raises would bring this to $39.8 billion;
• Enrollment declines accelerated during the pandemic. Between school years 2015-16 and 2021-22, K-12 DOE enrollment declined by more than 141,000 students, with the largest losses (90,000 students) occurring during the pandemic;
• Spending increases and enrollment declines led per-student spending to increase rapidly, 46.9 percent between fiscal years 2016 and 2022, while total spending grew 32.5 percent;
• As projected enrollment continues to decline, per-student spending will increase to nearly $38,000 in fiscal year 2024 and more than $41,000 in fiscal year 2026, or nearly $44,000 with likely collective bargaining costs;
• The recently announced Program to Eliminate the Gap (PEG) directs the DOE to reduce City-funded spending by 3 percent, which totals $421 million or roughly $392 per student in fiscal year 2024. Given projected enrollment declines, per-student K-12 DOE spending in fiscal year 2024 would still be $555 higher than in fiscal year 2023; and
• Federal pandemic aid continues to support ongoing programs that face an estimated fiscal cliff of $556 million in fiscal year 2026.

Decisions about the DOE’s budget should consider enrollment declines and the City’s precarious fiscal condition. CBC urges the City and the DOE to:

• Consider per-student spending and recognize that declining enrollment could yield flat or reduced total spending;
• Diligently manage the impact of enrollment declines in individual schools with appropriate changes in funding and staffing to ensure the smoothest possible continuity and equity of services;
• Identify priority programs funded by expiring federal pandemic aid and be transparent about whether the DOE plans to replace the one-time federal funds with recurring City and State resources or to shrink or end the programs; and
• Evaluate and modify DOE programs and initiatives to prioritize those that deliver maximum impact to the target populations.

Read the full brief and the accompanying chartbook.