Monthly Archives: June 2010

Education, Health

School Nurse Cuts Would Hit Private Schools the Hardest

Posted by Jenna Libersky, June 11, 2010

Six years ago the City Council passed a law requiring more nurses on site at public and private elementary schools in the city. Mayor Bloomberg’s Executive Budget would “expel” some of those additional nurses from their schools.

The nurses affected by the Mayor’s plan are funded through the Department of Health and Mental Hygiene. The proposal has some challenges ahead, including the need to first have a change in existing law which requires the presence of a nurse at schools with a certain number of enrolled students. For the cuts to take effect, that threshold number would have to rise.

If that happens, the health department estimates that 19 public schools and 127 private and parochial schools would lose publicly funded nursing coverage for about 33,000 students. Others outside the Bloomberg Administration have cited larger effects.

The Mayor’s proposal would have a minimal effect on middle and high schools, as they are not currently required by law to have nurses on staff. The budget would reduce the number of full-time equivalent school nurses directly employed by the health department by 62 through attrition, saving the department $3.1 million in 2011 and more in subsequent years. Contracts with nurse providers that supplement the nurses on the health department’s payroll would also be reduced.

The department’s school health budget has grown from $53.4 million in 2004 to $90.6 million in 2009, with about 60 percent of the total coming from city funds. The number of full-time equivalent nurses on the department’s staff has increased from 697 in 2004 to 802 in 2009, with the bulk of the positions in both years filled with part-time nurses. The department also contracts out for nurses; currently, an additional 84 nurses work under contract with the agency.

The growing school health budget is largely the result of the changes in city policy. In 2004 the City Council enacted Local Law 57 to require more elementary schools to have nurses on staff. The law lowered the enrollment threshold at which an elementary school was required to have a nurse on staff to 200 students. The Department of Education has also been pushing the development of new small schools, further increasing the number of nurses required. Between 2004 and 2009, 68 new elementary schools were added to the list of sites requiring nurses. The total number of public elementary school sites with health department nurses now totals 717, excluding 52 sites where special School Based Health Centers provide more intensive primary health care services to children.

Not all of the schools that would lose a health department nurse due to the proposed increase in the eligibility threshold would be left without access to a health care professional during the school day. The Department of Education is responsible for providing nurses to public schools enrolling students with special medical needs as required by Section 504 of the federal Rehabilitation Act and the Individuals with Disabilities Education Act. The education department employed 549 full-time school nurses of its own in 2009, up 24 percent since 2004. The Executive Budget does not cut funding for Department of Education nurses.

The joint Office of School Health manages both the education department and the health department school nurses but maintains their budgets separately. Since there are many schools that qualify for a nurse based on both local and federal standards, the two agencies have reached a labor agreement to avoid duplicating efforts. Schools that fall into this category are assigned either an education department or health department nurse. The nurses from both departments are licensed professionals with either associate or bachelor’s degrees in nursing, have similar skill sets, and according to the labor agreement, provide similar services in the schools they serve.

The overlapping requirements that govern school nurse coverage mean that enrollment is not the only factor used to determine which public schools would lose their nurses under the plan. The Bloomberg Administration estimates that the proposed change to Local Law 57 would leave 68 public schools at risk of losing nurses based on current enrollment; however, 36 of these sites enroll students with daily medical needs that would qualify them for nurses under Section 504, leaving 32 schools at risk of losing coverage.

Moreover, many of the public schools in New York City are co-located with other schools. Even though co-located schools are administratively separate, the Department of Health and Mental Hygiene stresses that they could share a nurse if needed. Of the 32 schools that are eligible to lose a nurse, 13 of the schools share a site with another school whose nurse would remain. Consequently, if Local Law 57 is amended and the Executive Budget cut is not restored, 19 public elementary schools would lose nursing coverage, according to the Mayor’s estimate.

While Department of Health and Mental Hygiene officials estimate that 19 public schools would stand to lose a nurse, the result would be greater at private and parochial schools. The Bloomberg Administration estimates that 127 private and parochial schools would lose nurse services, meaning that 3,000 public school children and 30,000 nonpublic elementary school children could lose access to the services that school nurses provide. These services include monitoring vaccine compliance, administering daily medication, screening for hearing or visual impairments, and linking children to additional health services. Losing these services might be a hard pill for some New Yorkers to swallow.

Local Economy

Wall Street Wages: A Rough Ride on Easy Street

1 Comment

Posted by David Belkin, June 8, 2010

Much has been made in recent months of last year’s record profits on Wall Street, the myriad ways (near-zero interest rates, bailouts, accounting rules changes) that government policy boosted those profits, and the seven or eight figure bonus packages that some Wall Street executives awarded themselves from those profits. There has been less said, however, about what happened to aggregate wages and salaries across the securities industry in New York City in 2009. Not only did wages fall, but the fall was the steepest in modern history—including the Great Depression.

Real average annual wages—including baseline salaries, cash bonuses, and exercised stock options—in the city’s securities industry slipped from $412,915 in 2007 to $396,370 in 2008, and then tumbled to $311,279 in 2009. (All amounts here and below are in constant 2009 dollars.) Adjusted for inflation, average wages in the securities industry plummeted 21.5 percent in 2009 and 24.6 percent over two years.

How could wages nose-dive in 2009 while Wall Street profits skyrocketed? First, most of last year’s wage decline reflected the industry’s crack-up in 2008: New York Stock Exchange member firms posting record losses, revenues dropping almost in half, and the year-end bonus pool shrinking in tandem—those bonus reductions were almost entirely felt in the first quarter of 2009. Real average bonus payments for the year as a whole fell 38.2 percent in 2009, on top of a 6.6 percent drop in 2008. It should be noted that bonuses measured here do not count grants of stock options; rather, reported wages include the gains realized on previously awarded options when they are exercised. But many options were “underwater” in 2009 due to the steep slide in the stock market, and this also depressed wages.

At the same time, while Wall Street profits surged in 2009, firm revenues did not recover. One result was continued pressure on employment—the securities industry lost 18,400 jobs in New York City in 2009, more than twice the decline over the course of 2008—and this appears to have weighed down baseline salary growth. The negative effects on options and salaries combined to reduce real average non-bonus wages in the city’s securities sector by 7.4 percent in 2009.

By comparison, securities industry job losses were much greater in the post-9/11 slump, but prior year bonuses and current year baseline salaries and option realizations never all fell at the same time. As a result, real average wages declined by “just” 10.1 percent in 2002 (and 11.2 percent over 2002 and 2003). Before that, there have been only three occasions since 1929 when real average securities wages fell by at least 10 percent in a year. None of these were during the Great Depression itself. That epoch was marked by drastically shrinking securities employment but surprisingly limited effect on industry average real wages; long-term stagnation rather than precipitous drops was the rule. There was much more securities wage volatility during the 1940s, a reflection of both wartime dislocations and two major bear markets. Trading controls may have also contributed to the steep postwar slide in real average wages, which included a nearly 18.0 percent decline in 1947. There was also a slightly larger than 10.0 percent drop in 1969—auguring the onset of the “Slow Crash” of the 1970s—and lastly a 13.7 percent dive in 1994, partly due to a crash in the bond markets that year, but mostly an artifact of a shift in the timing of bonus payments.

These episodes were all eclipsed in 2009. Also without modern precedent was the 29.4 percent plunge in real aggregate wages on Wall Street in 2009. Reflecting the combined effect of wage declines and layoffs, an estimated $21.4 billion in wages and salaries vanished in the city’s securities sector last year. Even in inflation-adjusted terms, the hit to aggregate industry wages last year was almost twice as large as in 2002.

But was the magnitude of last year’s wage drop actually just an effect of the prior years’ soaring—but ultimately insupportable—compensation growth? “What-goes-up…” may indeed be part of the explanation. However, workers on Wall Street saw their real average wages rise by $64,000 at the peak of the DotCom boom in 2000-2001, and then gave back 50 percent of those gains ($32,000) during the 2002-2003 slump. Over 2006-2007 real average wages grew by almost $100,400—and in 2008-2009, over 100 percent of those gains ($101,600) evaporated. Perhaps what has happened in the past two years can be viewed as a correction to the entire era.

What would a less lucrative but also less volatile securities industry, one that did not generate cycles of frenzied wage growth but also was less susceptible to catastrophic meltdowns of earnings, have meant for New York City’s economy? Just how lucrative and how volatile can be seen from the fact that from 1990-2009 there were nine years of double-digit percent increases in securities real average wages (including a high of +36.0 percent in 1992) and three of double-digit percent decreases (the worst was the -21.5 percent in 2009), all this yielding 5.4 percent annual average real growth over the whole period.

In the rest of the city’s financial sector (banking and insurance), by contrast, there were four years of double-digit real wage growth (the highest +14.5 percent in 1999) and no years of double digit decline (the worst, last year, was -6.8 percent), and annual average real growth over the period was 4.1 percent. Outside of finance, annual New York City private sector real wage growth averaged 1.6 percent, and never exceeded +6.2 percent (2000) or fell below -2.5 percent (2009) in any year.

So a securities industry that, from 1990 on, grew compensation at “merely” the robust pace of the rest of finance would have (all else being equal) delivered a much milder jolt to aggregate wages in 2009. But it would have also delivered much lower real aggregate wages—lower by $11.3 billion (22.0 percent) in 2009 and by an average of $15.7 billion (28.3 percent) per year over the past decade—than the securities wages actually paid in New York City.

This is just by way of illustration, but it does give something of the flavor of the challenge New York City could face adjusting to a securities industry that is unable to return to the kind of breakneck earnings growth it exhibited during the last 20 years—spectacular crashes and all. Just what kind of securities industry will emerge as Congress and regulators thrash out changes intended to protect borrowers, investors, and the broader economy is one of the great unknowns for both the city and the nation.

Community Boards, Social and Community Services, Youth

Some Community Board Budget Priorities Face Budget Axe, Again

Posted by Eddie Vega, June 4, 2010

As part of the city’s budget process, New York’s 59 Community Boards are provided surveys each year that ask them to rank, by order of importance, government services in their districts. The survey lists 90 services provided by 24 public agencies. This year 46 Community Boards, two less than last year, submitted responses. Some top priorities align with the Mayor’s budget. Most do not. (Click here for the survey.)

While there was some reordering from last year, for example, child protection services jumped from 8th to 4th place, the same items appear in the top 10 priorities for both years. Taking care of the city’s elderly continued to be an important concern for the Community Boards; for the second year in a row, services for the elderly ranked first. Likewise, protecting young people and developing their talents has weighed heavily in the boards’ considerations. Programs and services intended to help young people find jobs and access educational opportunities and to protect children from abuse scored high in the rankings: youth development services, after school/summer school programs, and child protection services, took 2nd, 3rd, and 4th place, respectively. Also important were parks and public safety: parks maintenance (down from last year’s 2nd place finish) and police patrols of public housing and transit along with auxiliary patrols tied for 5th place. (See IBO’s blog About Those Services You Prioritized on last year’s Community Board rankings.)

The surveys also identified the priorities by borough. Services for the elderly were among the top two priorities for each of the boroughs except Staten Island, where it dropped to 14th from 12th place last year. Youth development services were among the top five priorities in each of the boroughs except Staten Island, where it ranked 24th. There was greater variation in rankings of after-school programs: after-school was included among the top three priorities in Brooklyn, the Bronx, and Manhattan, but was ranked 11th in Queens and 38th in Staten Island. And while branch library services ranked in the top 10 citywide (with a rank of 7th), Brooklyn and Staten Island community boards ranked it even higher at 2nd and 3rd, respectively.

As was the case last year, the Mayor’s Executive Budget proposes cuts to some of the services at the top of the Community Boards’ priorities. If enacted as written, the budget for 2011 would provide the elderly with fewer places to socialize and receive services because 50 senior citizens centers serving a total of 1,600 seniors would close. There would be fewer and busier child protection specialists to investigate complaints of abuse and neglect after the elimination of 32 units in the Division of Child Protection and a projected increase of the average workload for investigators from 9.5 cases to 10.9 cases. The parks might not be as well maintained after a reduction of 113 full-time equivalent positions for seasonal workers who clean, maintain, and provide security in the parks; also, four swimming pools would close and the pool season would be shortened by two weeks.

Other youth service-related cuts proposed in the Mayor’s budget include the elimination of Out-of-School Time programs at 33 schools that currently provide activities for 4,110 elementary and middle school children—about 7 percent of the 61,000 youth now served by the program. Additionally, there’s a $2.7 million reduction (7 percent) to school-based Beacon Centers, which provide after-school and other youth and family oriented programs.

A proposed $31.2 million cut in subsidies to the city’s public library systems would have a substantial effect on another of the Community Boards’ top priorities. This reduction, along with previously planned cuts, would bring the city’s subsidy for the libraries down about 20 percent to $247 million compared to this year’s level of nearly $310 million. The Brooklyn, New York, and Queens library systems have said that the reduced subsidy will mean branch closings and shorter hours of operation at many of the libraries that remain open.

While proposed cuts to youth, seniors, parks, and library services are often reversed in negotiations between the Mayor and the City Council, the challenging budget climate for the next few years means that the restoration of these reductions is far from certain.