[music]

Brian Lehrer: Brian Lehrer on WNYC. The news broke yesterday that the US hit a 9% annual rate of inflation last month for the first time in 40 years. In other words, if prices keep going up at the rate they did in June, things will be 9% more expensive in a year than they are today, and that would be on top of the increases we're already experiencing. We all know how that's affecting our own individual and our own family budgets, but what are the implications of inflation for the public services we depend on from the government?

We will ask New York City Comptroller, Brad Lander, in a minute. We'll also talk to the comptroller about his audit of the New York City Ferry system, and also the planned cuts for the coming school year to New York City public schools that have seen their enrollments decline. Now, Mayor Adams is making those cuts based on the formula that gives money to schools per child, so if enrollments go down, the total funding to a school goes down, the funding per child stays the same. Here's the mayor in the spring.

Mayor Adams: We believe we're going to get the enrollment counts up and then we will make the adjustment if those numbers don't get back up to the proper head count.

Brian Lehrer: With me now is New York City Comptroller, Brad Lander, who may also be the only politician from Brooklyn not running in the 10th congressional district primary, but that's another show. Hi, Comptroller. Welcome back to WNYC.

Brad Lander: [laughs] Good morning, Brian. Good to be with you. Yes, you can't walk around the neighborhood without running into people who are running for office and I'm really happy to be comptroller and working hard for all New Yorkers and not one of them.

Brian Lehrer: Now, we've made news, Brad Lander not throwing his hat in the ring at this opportunity. All right, but to remind people where you came from, you were a founder of the City Council's Progressive Caucus before being elected comptroller last year. In the news today, we have a letter to the mayor from 40 of the 51 Council members, led by Council Speaker, Adrienne Adams, protesting these school funding cuts. Can you, as comptroller, start by just explaining to our listeners how some of this works? How does this funding per child system from the DOE, the Department of Education, work?

Brad Lander: First, I think it's important to remember we don't get the money on a per-student basis. For the most part, the money, the largest chunk is from our tax revenue, we'll talk about that more in relationship to the economy, and then we get money from the state and federal government. During COVID, we've gotten $7 billion, $4 billion of which we still have not spent from the federal government for COVID relief specifically for our schools.

There's more money in the overall Department of Education budget this year than last year, but the City uses what it calls a fair student funding formula and essentially sends funding to schools on a per child basis, a little more for a low-income student, a range of other needs and adjustments. Now because through the pandemic, and even starting before that enrollment has been down, about three-quarters of our schools, 77% of our schools the Department of Education projects will have declines in their enrollment for September.

It's cutting the budgets of 77% of our schools, an average of $400,000. That means those schools are forced to access teachers or eliminate the art or music program. I do stand with the Council on this. This is exactly what the federal funds were designed to help us avoid precisely so that families could feel more confident in our schools and principals and teachers can get back to something a little more like normal.

Brian Lehrer: Did you say that that $7 billion of unspent money from the federal government in pandemic relief is specifically targeted by Washington for schools?

Brad Lander: Yes. The $7 billion is just what's going to the New York City Department of Education. There's billions more for other uses; for testing and COVID-specific public health and transit. $7 billion just for schools. Department of Education has spent a little over $3 billion of that but we have over $4 billion remaining that we can spend over the next two fiscal years and that's more than enough to offset these cuts. We calculate that the cuts to those 77% of schools total $469 million, but as I said, there's $4 billion in that one-time federal COVID money remaining.

Actually, this year DOE budgeted to spend about $3 billion in the COVID money, but it actually came up about at least $620 million short in just what it wasn't able to spend. If we just take that rollover and apply it to these cuts, we don't have to force our schools to make cuts to go down from four third grades to three third grades or eliminate the art or music program right as we're coming through the pandemic.

Brian Lehrer: As fairly as you can characterize it being on the other side of the issue, what's the mayor's argument here? If there are billions sitting around, and if I understood you correctly, that money has to be used in the next two years, then why aren't they using it to avoid these cuts?

Brad Lander: I think the mayor is anxious about what's on the horizon. When you get one-time money, you want to spend it thoughtfully because you don't want to do new things that are continuing, except that several hundred million of that is going to go to create new 3K seats and new 3K seats are wonderful, but they're going to hit the same fiscal cliff in two years when the federal money runs out.

It is prudent to pay attention to the long term. We do have to really look carefully at enrollment declines and make a good plan for what to do to strengthen our schools. We do need to be mindful about the harms that the dark clouds on the economic horizon could bring. That's why I was delighted that the mayor and the Council put $2.5 billion this year in the City's Rainy Day Fund, something that we strongly advised.

We do want to be saving for that rainy day but I do believe we should use the COVID money specifically for our schools to prevent the cuts to our schools. Let's give them a little more time to deal with enrollment adjustments and also, obviously, it doesn't help with enrollment if people think my third grader's going to be in a class of 32 kids and not going to have art or music next year.

Brian Lehrer: We'll get to some of those dark clouds, as you call them, on the horizon and that's going to be part of the economy portion of this discussion and inflation and other pressures that you expect in the City budget in the next few years, but listeners, on the school funding piece, humanize this budgeting story for us if you can, listeners.

If you are a teacher principal, parent, student, or anyone else connected with a New York City public school facing budget cuts because of declining enrollment, tell us the story of your school and why the same money per student would mean fewer services for them or anything else you want to say, or to ask New York City Comptroller, Brad Lander. 212-433-WNYC, 212-433-9692, or tweet @BrianLehrer. By the way, Comptroller-- [crosstalk] Yes, go.

Brad Lander: I was at a middle school for a graduation a couple of weeks ago where the principal told me her enrollment has been coming down but she used to have five different arts programs; dance and music, and now she's down to one, and the cuts that she's getting are going to take the last arts program that middle school has. As I've traveled around the City hearing from parents and teachers and principals what it really means, it's really devastating in a lot of cases.

Brian Lehrer: How much has enrollment declined in recent years? Do you have that number?

Brad Lander: Oh, I don't have that number right to hand. There's been a steady decline, and this was pre-pandemic. There's no doubt the pandemic accelerated it but it was already pre-pandemic. Some of that is kids going to charter schools, some of that is lower demographic birth rates. The population of younger people in the country broadly is declining, and then obviously, some of that was pandemic.

Brian Lehrer: Zoe in the Bronx, you're on WNYC with Comptroller Brad Lander. Hi, Zoe.

Zoe: Hi. We've been talking about how desirable it would be to have smaller class size, but a less expensive alternative to that is to have a second teacher in the room in the elementary grades. Why can't the surplus money be used for that? That's my question.

Brian Lehrer: Right. It's interesting. Thank you. We touched this, I don't know if this is in your portfolio enough as comptroller, but on the topic of education, we're waiting for Governor Hochul to decide whether she's going to sign that bill that the state legislature passed that would mandate smaller class sizes in the New York City public schools and statewide. From 20 in the lower grades to 25 in high school, that would be a significant reduction.

The question came up in one of our earlier shows about would it be better, instead of having to incur construction costs, for example, to build additional buildings for additional classes to have enough room for all those smaller class size classes, or enough rooms, why not add teachers? One thing that I read in doing research for that is that the research seems to indicate that a second teacher in a room does not do as much additional for the students as a smaller class size, but I don't know if that's definitive.

Brad Lander: I love the second teacher model. I've seen a lot of places where people do a collaborative team teaching approach. It's especially good where you have some of the kids in the classroom who are kids with special needs, kids with IEPs. What that second teacher can do is really focus on the kids who need a little extra help or support, so I really like the idea of reducing student-teacher ratio by saying, look, where you've got a small class, great, where you only have 20, 21 kids in a class, super, but where you have more in the upper 20's or low 30's, put a second teacher in, as you point out.

Then, we don't have to build a whole new classroom which is expensive, takes a long time, and with enrollment declines, put that second teacher in. Anyway, I agree with your caller. I've seen the model of collaborative team teaching work really well in classes. There's a great school called the Brooklyn Children's School in Brooklyn that's really pioneered that model. I looked it up. It's about 80,000-- The enrollment decline's about 80,000 over the last two years, which is about 8% of students over the last two years.

Brian Lehrer: Right. That would be 0.8% probably.

Brad Lander: We had roughly a million students. We're down 80,000 over the last two years.

Brian Lehrer: Oh, yes, so that's like 8%.

Brad Lander: We're down about 8%.

Brian Lehrer: Interesting. By the way, do you have any idea what's going on with Governor Hochul and that bill? I don't know how long-- Presidents don't get a month to decide whether to sign a bill. It's been a month so far, I think. How long can she sit on that? Do you have any idea?

Brad Lander: I believe that the governor has until the end of the year. I think the legislator passed a thousand bills toward the end of the session, and I know that the governor's office is working their way through that thousand bills. Not all of them, obviously, as high-profile as this one, but it's my understanding that in their normal process, the governor has until the end of the year to work her way through all those thousand bills and to decide which ones to sign and which ones to veto.

Brian Lehrer: End of the year, wow. Heather, who teaches in the Bronx, you're on WNYC. Hi, Heather.

Heather: Hi. I'm a middle school teacher in a dual language Title 1 school in the Bronx. It's an excellent school. We stand to lose about $1.5 million from our budget, and I can only say that I feel like this kind-- I feel jerked around, let me just put it that way, real simple. I feel so jerked around because during the pandemic, there was discussion about smaller class sizes and how we were going to get that. This year, we did have smaller class sizes, thank God. It really helped. Now, I'm looking at the next year and thinking, "How many kids am I going to have? Am I going to have 30 again per class?"

The disturbing and frightening thing in that is that we're still under this heavy responsibility to bring our kids up to reading level, and it's a struggle. It is a big struggle. I'm an ELA teacher. I just think this throws planning off. I sympathize with my admin. How can they put together a plan with all this uncertainty next year, let alone our challenges? That's all I'll say.

Brian Lehrer: In fact, Heather, let me invite you to say something else in reaction to the letter from 40 of the 51 City Council members to the mayor and I guess to the chancellor. It says DOE's significant reductions to school budgets will hurt those with the greatest needs; Black and brown students, those from low-income communities and families, students with disabilities, and English-language learners. I wonder if that rings true to you as someone who teaches in a dual language middle school.

Heather: Absolutely. We have a very large population of English-language learners in our school, as well as students with learning disabilities. The pandemic put a tremendous pressure on our families, which many of them were forced, for economic reasons, to be out of their homes, and the kids struggled. They really, really struggled. It does feel super unfair right now to take that money away when it was dedicated in the first place.

Brian Lehrer: Thank you for your call, Heather. We really appreciate it. Let's get a parent's voice on here. Alison in Brooklyn, you're on WNYC. Hi.

Alison: Hi, Brian. Hi, Brad. My child is entering second grade at a District 13 school in Brooklyn. Enrollment is not going down in our school. Enrollment is not going down in other District 13 schools. I think Chalkbeat published these enrolment numbers. I have them. I was just looking for them before you brought me on the air. My question is, in schools were enrolment is going up, why are these cuts being applied here? Can you help us understand that? I'll take my answer off-air.

Brian Lehrer: Well, are they? Because theoretically, according to what the mayor says, there wouldn't be cuts to your school because it's following an X dollars per child formula. If enrollment is going down, then the funding to your school wouldn't be going down. Comptroller, go ahead.

Brad Lander: First of all, what Heather had to say really tracks with what I'm hearing, and I want to thank her for the work she's doing in the Bronx with our middle school students. To Alison's point, and the Department of Education's been asked about this, it's based on a DOE projection of enrollment in September. One thing that we think they've done is just used a trend line if there was-- The formula says, okay if you were down X percent last year, we're going to say you're going to be down X times 2% next year. They're taking what may have been one-time pandemic declines and projecting them forward.

I've talked to some schools who believe their numbers are going to be higher than what is projected but they've still gotten assigned this cut that they have to make now for the fall.

Alison: Thank you.

Brad Lander: The mayor and the chancellor have said, well, if you have more people in September, we'll give you the money back, but that enrollment calculation doesn't happen until October, and often, the money doesn't arrive until January, and principals are deciding now how many second grades there are going to be in that school. If they decide three rather than four, that's the difference between a class size of 24 students and a class size of 32 students.

Brian Lehrer: Alison, go ahead.

Alison: The question that I'm on the PTA in my school, I'm a new parent in this school. I'm just trying to be part of the system that I grew up in. I went to public school in Queens in the '70s and '80s Anyway, what do parents do? Knowing what Brad just said about how these numbers are actually currently influx, or rather, the money being distributed is based on not a real enrollment number, what can parents do? Because our principal is saying like, we're not going to get the third admin that we need, we're going to lose the second class teacher, et cetera. What is the action, Brad, now that we can take as parents and maybe across the district to try to push against this calculation? Because the money could be given now and then taken away next year, right? I understand the rainy day fund, but why hold it? It's a downward cascade, right, so how do we make this argument more clear?

Brad Lander: There is an appeals process for individual school. If you think they have your enrollment numbers wrong, you can appeal, and a principal can bring data that says, "Here's why I'm confident we're going to have more students in September." It's hard to win those arguments because it's all projections, but if you can really show here are the families that we know are coming to school next fall, it's possible for an individual school to win an appeal even now over the summer and not wait until enrollment numbers in October and get that money in January. Hard and not really fair to those schools, but at least an opportunity to appeal.

There are parents speaking up citywide. Look, that's why the City Council, 40 City Council members signed that letter yesterday. Make sure your council member was on that letter. If they were, thank them, and if they were not, say, "Sign on to that letter." Obviously, keep speaking up and communicating. This is a change that could be made now. The mayor could take that remaining federal COVID money and say we're going to put it into our schools to prevent these cuts. Then next year, the deal we did agree to take another look at that fair student funding formula. That's going to be a longer-term conversation to make sure we get it right and get a budget in process that works better for schools going forward with all the real realities we have.

Brian Lehrer: Alison, thank you for your call. A few minutes left with New York City Comptroller, Brad Lander. We've spent most of our time on this one issue out of three that we wanted to touch with the comptroller today. I think it was worth doing what we did partly because of new developments in the story about the school funding, and partly because of how important it is to so many people out there listening right now.

Let's touch on inflation in the City budget. The US is at roughly a 9% annual rate of inflation now. Are you, as comptroller, keeping tabs on where City government expenses are inflating the most?

Brad Lander: Absolutely. Actually, we've put some interesting data out about fuel expense increase. One thing I will say is the City has been increasing the number of hybrid and electric vehicles and that helped but the City fuel costs are up substantially. We had a good story in the Post about that. Look, it's a really confusing and mixed message time in the economy. We just put out some new data this week. Job growth is strong in the City. 14,000 new jobs in May, we're back at 95% of pre-pandemic levels. Unemployment is down from 10.2% a year ago to 5.7% in May.

My favorite stat from our economic newsletter on Monday, 2,285 new establishments around the City that are unclassified because the Bureau of Labor Standards doesn't even have categories for what they are yet. Hopefully, those are innovative new companies. All that is great but yes, that 9.1% inflation is really eating at those gains for people. One stat on that, workers in the lowest one-fourth, lower-wage workers in the City are now back in real purchasing power terms because of inflation to where they were in 2016 when the minimum wage was just $11 an hour, so it really is taking a bite.

Brian Lehrer: What are the implications for City services in the current fiscal year if any?

Brad Lander: City services are somewhat less affected by inflation than by stock market declines because that really hits our tax revenues, and by the threat of an economic downturn in the economy. We just saw June tax receipts were down substantially from a year ago. Those really closely tracked capital gains and so that's the first sign that stock market declines are taking a bite out of City tax revenues, and that's when we get into challenges paying the bills.

For the City inflation, most of our costs are relatively fixed. We've already got a contract with our workers, we already have rented our own, our spaces. In that way, we're a little more like a homeowner who's got a steady job and whose mortgage isn't going up that much. There are some things, as we mentioned, like fuel costs that hit, but for the City really, the risks are an economic downturn risks taking a big bite out of the revenues with which we pay our teachers and firefighters and police.

Brian Lehrer: What are you forecasting for the next year or a couple of years, or maybe nobody can forecast anything anymore but Mayor de Blasio-- [crostalk]

Brad Lander: We make forecasts even--

Brian Lehrer: Mayor de Blasio got lucky. This is not a criticism of him but I think it's so accurate and fair to say he got lucky with growing tax revenues in the years of business growth during his time in office. He really didn't have to make a lot of hard choices in the way that some mayors have had to in the past. Are you projecting tougher choices ahead based on City revenues?

Brad Lander: Yes, we are. It turned out that the fiscal year that just ended on June 30th was actually surprisingly good. We had more than $3 billion in unanticipated tax revenues come in just at the end of the year. That's why we pushed the Mayor and the Council. I really do want to give them credit here because taking $2.5 billion, $2.2 billion, excuse me. We encouraged $2.5 but they took $2.2 billion and put it in rainy day funds for the future because yes, what we are projecting for the current fiscal year and the next one are declining tax revenues for the reasons that we have been talking about.

The mayor presented and the Council adopted a balanced budget for this current fiscal year that started on July 1st. So far, we think we're on track to hit that. It already projected several areas of declining tax revenue. When I talked about those dark clouds with the Fed raising interest rates, which may be necessary to get inflation under control, what that means is less investment in the economy, less new job creation, and that could show up next year in further decline. We make a lot of projections, that's why you put money in the rainy day fund, why you try to do long-term planning, but boy, we live in uncertain times.

Brian Lehrer: I'll let you just touch on the third topic that we are originally going to spend a little more time on but you did an audit of the City's ferry system recently. For people who don't know, it's a lot more than to and from Staten Island these days, right?

Brad Lander: [chuckles] Oh, yes. This is now a five-borough ferry system that got built out over the last five years. I'll be honest, on the one hand, I love taking the ferry. I read some Walt Whitman when we released the audit from Crossing Brooklyn Ferry 150 years ago, but what we found is that from 2016 to 2021 during the De Blasio's administration, the New York City Economic Development Corporation understated the actual cost of the ferry system by $224 million trying to brush under the table many of the expenses that really were ferry-related.

As a result, where they had originally projected it to cost $6.60 in City subsidy per ride and were reporting last year that it was actually $8.59, our auditors found it was actually $12.88 in City subsidy, about twice what had been projected originally.

Brian Lehrer: Therefore, is the City ferry system, popular with the people who use it, too expensive per ride to be sustainable?

Brad Lander: What we recommend is two things. We recommend the City issue a new RFP for an operator. We think there's a lot of problems with the current contract and they've accepted that recommendation. They're planning to issue a new RFP. One thing that we could look at is having rides priced differently depending on what they are. Because if you're a regular commuter, especially if you're a low-income or working-class person from the Rockaways who doesn't have a lot of transit options, then maybe subsidizing city subsidy just so you can pay $2.75 makes sense.

If you're a tourist or a weekender who's going from Manhattan out to Rockaway Beach, then yes, I think you should probably pay something closer to the full cost of your ride and not expect a taxpayer subsidy for it.

Brian Lehrer: New York City Comptroller, Brad Lander, always a pleasure. Thank you very much.

Brad Lander: Really nice to talk to you, Brian. Thanks as always.

Copyright © 2022 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.