Watchdog urges NYC to tie school funding to enrollment

(The Center Square) – New York City officials are weighing potential changes to school funding as enrollment declines, with fiscal analysts warning the current system is increasingly disconnected from student needs.

At a hearing Monday on the NYC Department of Education’s $38 billion Fiscal Year 2027 preliminary budget, the Citizens Budget Commission told the city council that New York could save more than $400 million annually by tying school funding more closely to actual enrollment.

Public school enrollment has dropped 17% over the past decade, and overall enrollment across all school types is down by more than 118,000 students. Projections show a further decline of nearly 70,000 students by 2033.

Ana Champeny, the commission’s vice president for research, said the trend is driven by falling birth rates and families leaving the Big Apple.

“This provides city lawmakers the opportunity to rationalize school budgets, saving money without shortchanging students or schools by allocating resources based on actual enrollment,” Champeny said.

Since the 2020–21 school year, the city has maintained a policy allowing schools to keep funding levels even as enrollment declines. Analysts say that approach has led to a growing gap between school budgets and student populations.

Hundreds of school buildings are now underused, with 380 operating below 60% capacity, while many schools have shrunk to sizes that drive up per-student costs, the commission showed. In 2024, New York leads as the highest per-pupil spending state, at $32,284.

Some lawmakers questioned whether New York City should continue funding schools with declining enrollment.

City Councilmember Phil Wong, D-District 30, raised concerns during the hearing.

“At what point do we acknowledge are we funding empty seats?” Wong said.

Education officials caution against abrupt funding changes, arguing that stability remains critical for schools serving vulnerable communities and recovering from the pandemic.

“Nobody wants to think about removing funds, if you will, from a school,” New York City Schools Chancellor Kamar Samuels responded. “We’re continuing to have those difficult conversations within DOE, and no decision has been made.”

The commission also called for changes at the state level, including relief from the class size reduction mandate, which is projected to cost the city $1.6 billion in fiscal year 2027.

The chancellor’s office did not respond to The Center Square’s request for comment.