Billion Education Budget Shortfall Rings in New Year of Financial
the New York City Board of Education’s 2000-2004 capital budget
were a math test, the board would have needed a re-take. Their
1999 estimates for school construction projects undershot the
rocketing costs of school construction, resulting in a $2.4 billion
shortfall, according to a recent report issued by the New York
City Independent Budget Office (IBO). Worse, the miscalculations
will delay school construction projects citywide; news that will
come of little consolation to those districts burdened with overcrowded
classrooms, crumbling masonry, and broken windows.
School construction and renovation costs have exceeded the BOE’s
1999 estimates by more than 70 percent. Due to the higher costs,
the BOE lacks funding for its projects which means that it must
defer a range of vital projects in all five boroughs: building
of new schools, school renovations, and the construction of additions.
The BOE’s five-year capital plan, written in May 1999, underestimated
school construction costs by as much as 90 percent. For instance,
when the board estimated costs for building Frank Sinatra High
School in Astoria it was originally set at $48.9 million. Since
then, the cost has rocketed to $90.5 million. School renovation
costs grew as well. For example, renovating the roof of John Jay
High School Annex in Park Slope—originally estimated at $1.1 million—has
risen to $1.9 million.
Why the shortfall? Last summer Chancellor Levy cited a litany
of reasons including: higher than expected construction bids;
delays in project start dates; and low cost estimates due to inadequate
knowledge of work scope, location of project, or particular difficulties
associated with selected sites.
No matter what the cause, the BOE addressed the disparity by amending
the budget in December. The outlook is grim. According to the
IBO, the revised plan will result in construction delays for eight
new schools, two additions to existing facilities, one building
conversion, and improvements for seven schools in leased facilities.
In total, the revised budget will postpone the creation of over
To be fair, the board could have done little to anticipate the
soaring costs of construction brought on, in some part, by the
flagging economy. However, the current shortfall is not without
precedent. Costs for school capital projects exceeded estimates
in both the 1990-1994 and the 1995-1999 capital budgets. Deficits
from both budgets snowballed into the current plan. Without additional
funding, some projects from the current plan will likely be pushed
into the next five-year plan.
In December, Chancellor Levy announced the need to make changes
to the capital-budget planning process, “With the need for school
seats so acute, the pressure on school capital finances so intense,
and the city’s real estate market so unpredictable, particularly
following the World Trade Center attack, it is essential that
we find ways to make better use of our existing buildings.” The
chancellor also cited a need to “devise new ways of building and
renovating schools promptly, efficiently and with full public
knowledge and accountability.” To do so he proposed scrutinizing
the capital budget more closely and revising it more often. In
addition, the Chancellor has brought into the fold experts in
building design, construction, real estate, finance, and business
management to identify new strategies to “do more with less”.
While the changes look promising, they may not be enough. For
even as steps are taken to improve the capital-budget planning
process, the Mayor’s Office of Management and Budget has ordered
reductions to capital programs starting in 2002. Furthermore,
Governor Pataki’s Executive Budget proposal is expected to worsen
matters; the BOE may stand to receive $157 million less
than it anticipated for next year. As a result, the BOE may need
to revise the already-amended plan which may result in further
delays. However, those decisions are still pending.
with the proposed budget cuts we are reviewing the program; the
chancellor and the board will make a decision. None has been made
as of yet,” says Board of Education Press Officer Margie Feinberg.
With a future bleak and uncertain, even the present is still up
in the air.#
Myint, a doctoral student at Teachers College, and is an intern
at Education Update.
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