Stimulus Dollars Protected Classrooms: Fed Study

New York and New Jersey were able to avoid big cuts to instruction in their public schools thanks to the U.S. government's stimulus spending, according to a new report by the Federal Reserve Bank of New York. 

Economist Raji Chakrabarti said when it came to education costs, it appears cuts were made to transportation and other non-instructional areas in order to protect the classroom.

Chakrabarti compared 2008 and 2009 total spending on education, and found that federal stimulus funds offset much of the cuts in state aid. Both New York and New Jersey also directed their education cuts to transportation and other non-instructional areas in order to protect teacher salaries and classroom supplies, she said, which fit in "the category that matters more to our student learning."

However, she noted New Jersey still took an overall bigger hit than New York because its stimulus package was smaller, and because the state made deep education cuts of its own.

Affluent districts also took bigger hits than those with large percentages of students who qualify for free and reduced lunch.

The stimulus funds could not prevent Long Island schools from the largest regional decline in education spending in 2009 because its housing market was hit so hard, affecting property tax revenues. Long Island districts experienced about a 12 percent cut in expenditures in 2009 — even with stimulus money — compared to about an 8 percent cut in 2008. New York and New Jersey spend more than any other state per student because of the high cost of living and their high percentages of students in poverty, those with special needs and English as a second language learners.

Chakrabarti didn't have any hard data for the 2010-2011 school year and beyond. However, she said districts including New York City appear to be cutting after school programs and teachers now that stimulus funds have run dry.

The federal American Recovery and Reinvestment Act funding started in fall of 2009 with $5.6 billion going to New York and $2.2 billion for New Jersey.

The Federal Reserve reports overall regional job growth has slowed, despite a pickup nationally. It also said economic activity rose in the second half of 2011, but leveled off in New York State and New York City, while accelerating in New Jersey.