Some of the added cost of a sound basic education can be covered by saving money now spent by the State and localities on their schools. This paper reviews three instances of misspent funds.

The first is misallocation of funds. State aid is given to districts that do not need the help. A school district does not need help if its tax base is sufficient to generate the full cost of a sound basic education, even with a relatively low tax effort. As explained below, about $750 million is now misallocated in this way.

The second two are inefficiencies that stem from rigid administrative and contractual arrangements. In New York City, current contract provisions cause about one-third of teacher time to be diverted from classroom instruction. Upstate, the small size of some school districts takes a significant toll in terms of excess administrative costs. Correcting these two inefficiencies would save about $475 million annually.

These are three specific examples that the Citizens Budget Commission’s analysis has identified and quantified. There are other opportunities that should be pursued. School transportation services, food services and the use of paraprofessionals should also be reviewed to determine whether new efficiencies could be achieved.