Public education from preschool to grade 12 in New York is a $60 billion enterprise, accounting for one in three state and local tax dollars. Per pupil spending in New York is well above national norms – $18,825 per student per year compared to $10,292 nationally – and ranks second among states behind Connecticut. But recent years have not been easy for school districts.

Facing a slow economic recovery and persistent budget gaps, Governor Andrew Cuomo and the legislature have reduced school aid from its peak of $21.7 billion in school year 2009-10 to $19.5 billion in school year 2011-12.2 While aid growth resumed in the current school year by $805 million and is expected to increase another $715 million (or 3.5 percent) in the next school year, these increases are far more modest than the annual increases of $1 billion before the recession. In addition local property taxes are now limited by a tax growth cap of 2 percent. For the 2012-13 school year, 92 percent of school districts adhered to their maximum levy cap in the first round of budget votes.

Given these constraints, it is more important than ever for school districts and the state to find ways to improve the cost-effectiveness of educational services. Toward that end Governor Cuomo recently announced the creation of the New NY Education Reform Commission, which is expected to submit preliminary recommendations this month. The Commission’s goals include examining education funding, distribution and costs.

The Commission’s recommendations should include reforms to the aid formulas to better target resources to the neediest districts and promote greater efficiency in school district management. One area that needs improvement is the administration and cost of pupil transportation. Pupil transportation is a major expense in New York State, accounting for 5.7 percent of total school spending at a cost of $2.97 billion per year.6 State aid funds $1.62 billion, or 54 percent, and the remainder is funded by local school districts.7 Pupil transportation spending is growing rapidly, more than doubling on a per pupil basis from fiscal year 2001 to 2010.