New York state faces a budget hole as high as $2.5 billion this year, with even bigger shortfalls in the years ahead — and local governments are strapped, too.
Meanwhile, the economic slowdown will prompt many families who can no longer afford both taxes and private‐school tuition to move the kids into public schools — adding to the pressure. The schools will need to spend more — even as tax revenues drop.
Because so many New York kids now attend private schools, governments face a potentially massive rise in costs from a spike in public‐school enrollments.
Public schools in Manhattan have already reported a surge in interest from private‐school families hit hard by the financial meltdown. The trend is likely to move upstate as the economy dips into recession.
At current levels of per‐pupil spending, just a 1 percent drop in private‐school enrollment will put New York governments on the hook for about $100 million a year. A 10 percent swing means about $1 billion more in school spending.
A look at the numbers explains why: New York has one of the largest private‐school populations in the country, with almost 16 percent of all K-12 students opting out of government institutions. And when all costs are counted, the state’s public schools spend a whopping $20,000 per pupil.
Thankfully, there’s a way to avoid getting slammed by huge new demands for public‐school spending while saving even more money and improving education: A broad‐based, moderate‐sized education tax credit would help families stay in private schools, preventing their children from burdening taxpayers with the public school’s (much greater) price tag. The credit would also help others make the switch to the private sector, easing the burden on taxpayers even more.
Education tax credits reduce the amount a taxpayer owes the government for each dollar he spends on his own child’s education or on scholarships for children who need them. That money comes straight off a person’s tax liability, so it’s a dollar‐for‐dollar benefit: You can either pay it to the government or use it on the kind of education you want to support. Tax credits for donations to scholarship organizations help support school choice for lower‐income families, while personal‐use credits help middle‐class families send their own children to a good school.