DEPARTMENT OF EDUCATION

Budget Reductions

December 15, 2008

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The Deteriorating Economy Requires Significant Reductions Across All Government Agencies

November PEG•$180 million for FY09*

• $385 million for FY10*

• In order to close the growing and substantial deficits in the City’s budget this fall, the Mayor required all City agencies in November to reduce their budgets for FY09 and FY10 by 2.5% and 5.0%, respectively.

• With the worsening economy, the Mayor announced that all City agencies would be required to reduce their budgets by another approximately 5% and to plan for a possible additional 2% reduction.

*Adjusted from $185 million and $395 million. Budgets as of October 2008

December PEG• Additional $526 million for FY10*

• For the DOE, these percentage cuts translate into budget reductions of:

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Estimated Breakdown of DOE’s Budget – FY09 Post PEG

FY09 Figures based on FY10 November Plan. Pension & Debt Service as of FY09 Adopted Budget

Fringe & Pension included in all categories except debt service

DOE Budget

School Budgets

Teacher Salaries School staff School Supplies

& Materials

13.120.8

2.9

School Support

Services Food Facilities Transport Safety

1.0

Restricted School

Programs Multiple Pathways Learning

to Work Core Curriculum Supplemental Education

Services (NCLB)

1.2

Debt Service

Interest on bonds for capital projects

0.5

School Programs Nursing PSAL

0.4

1.4

“Pass-Throughs”

Contract Schools Special Ed / Pre-K

Field

AdminISCSSOCSE

0.3

Central Admin

Tweed (Payroll, HR,

Legal Services, etc)

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We Have Minimized Reductions To School Budgets

• Midyear cut in FY08: 2% from Central and Field and 1% from school budgets• FY09 budget reduction: Total $200 million taken outside of school budgets• Midyear cut in FY09: 6% from Central and Field (includes reduction of 475 positions) and 1% from school budgets

FY08 MIDYEAR CUTFY09 JUNE BUDGET REDUCTION

ADDITIONAL FY09 MIDYEAR REDUCTION

Central and Field $14,719 $36,560 $40,353Indirect Impact to Schools $9,500 $49,908 $26,885Schools $98,954 $0 $103,644D75 Schools $0 $0 $1,869Other (Mainly revenue adjustments and fringe) $56,973 $88,130 $7,510Purchasing Efficiencies $0 $25,746

TOTAL $180,146 $200,344 $180,261

Central and Field budgets represent 8% of the dollars available for reduction but have taken 16% of the cuts

School budgets represent 66% of the dollars available for reduction but have taken 36% of the cuts

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Bucket 1: $40 million* for a 6% cut to Central and Field

Revise scoring of state assessments in Math and ELA, grades 3-8 Reduce meeting/conference expensesCancel mid year teaching fellows program, reduce size of next cohort of teaching fellowsEliminate citywide science assessments Reduce training in DIIT

Includes reduction of 338 positions for 8% of Central and Field positions through a further rationalization of these operations.*

*Fringe savings not included here.

Bucket 2: $27 million for an indirect impact on schools

Reduce facilities work – will monitor cleanliness and make necessary repairs Elimination of 137 positions in the trades workforce and management Eliminate school bonuses for AS and WD on the progress reports

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Bucket 3: Reduce school funds by $104 million for a 1.3% reduction in FY09

• Schools were notified of targets on November 10th

• Schools have through Nov 21st to work with ISC/CFN/SSO to identify specific targets

• Guidelines on reductions were provided to schools

• An estimated cut for FY10 was provided to help schools consider impact on and from FY10

• No school layoffs

Bucket includes all funds in schools budgets plus funds for school telephones, copiers, and suspension centers where utilization is controlled by principals but the funds reside outside of school budgets.

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Teachers$4.7 billion (57.1%)

• Classroom Teacher• Homeroom Teacher• Cluster/Quota Teacher• High School Dept.

Special Needs

$1.3 Billion (15.8%)

Leadership & Supervision

$793M (9.7%)

Other Personnel Costs

$482M (5.9%)

OTPS $389M (4.8%)

Support Staff $313M (3.8%)

Set Asides, Unscheduled & Other $183M (2.2%)

• Leadership• Secretary• Supervisor/Dean/Coordinator

• Per Diem• Per Session• Prof/Curriculum Develop.

• School Aides• Family Workers• SAPIS

• Guidance/Social Workers• Paraprofessionals• SBST• Related Services

School Support Organization $54M (0.7%)

Teachers$4.7 billion (57.1%)

• Classroom Teacher• Homeroom Teacher• Cluster/Quota Teacher• High School Dept.

Includes Total Budget for Fiscal Year 2009

Data: Galaxy Data as of October 14, 2008

How Schools Budget

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Where Schools Are Taking the ReductionSummary by Service

Data: DBOR

•Surplus rollover funds from the second half of the FY08 rollover program were allocated on 11/12/08 to 838 locations, totaling $45 million. Many locations used these funds in planning their PEG reductions.

•$6.2 million of the funding swaps come from funds provided to schools for anticipated register growth.

•$2.6 million of the funding swaps comes from reimbursable (state and federal) funding sources.

FY08 Pre-Cut Amts (01/28/2008)

FY09 Pre-Cut Amts (10/14/2008) Service (All)

1,398 Locations 1,501 Locations PEG Reduction

Funding Swaps to Support Reduction

69,506,370 40,482,488 Unscheduled Funds (63,066,689) 6,224,983487,134,242 397,701,133 OTPS (14,169,979) 436,121

4,552,463,702 5,140,083,329 Teachers- Vacancies & Funding Swaps (11,900,860) 11,597,600259,391,894 215,547,872 Per Session (9,162,224) 301,474134,976,361 118,666,152 Per Diem (5,166,370) 980,055

1,807,244,497 2,185,026,447 Support Staff- Vacancies & Funding Swaps (1,055,816) 898,194586,257,298 673,177,369 Leadership & Supervision- Vacancies & Funding Swaps(622,929) 566,937183,644,696 192,680,429 Professional Development (455,453) 478,176

8,080,619,059 8,963,365,219 Net Change (105,600,319) 21,483,540

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Where Schools Are Taking The ReductionSummary Galaxy Organization Category

Galaxy Organization Category

Teachers- Vacancies & Funding Swaps

Support Staff- Vacancies & Funding Swaps

Leadership & Supervision- Vacancies & Funding Swaps Per Session Per Diem OTPS

Professional Development

CLASSROOM/CLUSTER (303,261) (44,941) (2,357) (3,677,978) (9,279,470)AFTER/BEFORE SCHOOL STUDENT PROGRAMS (8,114,848) (27,043) (670,595)ADMINISTRATIVE SUPPORT (33,470) (50,677) (15,999) (232,581) (2,400,230)PROFESSIONAL DEVELOPMENT (320,752) (146,907) (1,174,565) 22,723PUPIL PERSONNEL SERVICES (23,793) (342,364) (45,047) (42,487)PARENT INVOLVEMENT (11,235) (56,398) (52,835)SUMMER STUDENT PROGRAMS (21,389) (361) (58,628)OTHER INSTRUCTIONAL SERVICES (55,418) (12,187)RELATED SERVICES (14,307) (28,307)SPECIAL ED INSTRUCTIONAL PGMS (17,500) (12,445)ATTENDANCE / OUTREACH (11,436)BILINGUAL / ESL (2,860)LEADERSHIP 6,873Net Change (303,261) (157,622) (55,991) (8,860,750) (4,186,315) (13,733,858) 22,723

Reduction Impact On Items Budgeted By Schools (no unscheduled funds)

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NYC January Financial Plan Budget Reductions

•Department of Education is asked to propose new savings programs totaling $526.5 million in fiscal year 2010

•These new reductions will be in addition to November Financial Plan reduction of $385 million FY2010