New York City has poured billions into its schools over two decades, yet student outcomes remain stubbornly flat. A new Manhattan Institute report argues that the problem isn’t funding — it’s a school system built for a population that no longer exists, and a thicket of state laws, union rules, and city procedures that prevent it from adapting.
For two decades, the Department of Education budget has increased substantially. Education spending doubled under Mayor Bloomberg, accompanied by structural reforms such as mayoral control, accountability ratings, and the closure of failing schools. What followed was increased spending without reform. Mayor de Blasio ended school closures and accountability ratings; under the Adams administration, the budget continued to climb even as enrollment fell. An Education Agenda for New York City shows that this spend‑more, change‑little approach has not delivered results for NYC children — and outlines how Mayor Mamdani can change course.
For years, the city’s education debates have centered on more spending, smaller class sizes, or new programs. Yet the system itself is organized for a student population that no longer exists.
Enrollment has fallen by more than 215,000 students since 2003–04 — a 21 percent decline. Pre‑K applications dropped from about 95,000 to 75,000 in a single year, and births fell 11 percent between 2019 and 2023. These demographic shifts will shape the system for years.
New York City projects 134 public schools with fewer than 150 students in the coming school year, up from 112 in the last. Schools that small still carry full fixed costs — a principal, custodial staff, and building operations. Meanwhile, the Department of Education’s adopted budget has grown to roughly $38.6 billion. After adjusting for inflation and pre‑K expansion, the Independent Budget Office (IBO) estimates per‑pupil spending has risen 21 percent over the last decade to more than $36,000 per student — the highest among the nation’s hundred largest school systems.
Yet more money has not produced better outcomes.
Last year, 83 percent of students graduated from high school. But on the 2024 National Assessment of Educational Progress, only 29 percent of eighth graders were proficient in reading and just 23 percent in math. Only one in five graduates earned an Advanced Regents diploma, and most did not meet the state’s own college‑readiness benchmarks. Under the Board of Regents’ new “local diploma,” scores below the passing threshold may count as passing on appeal.
The same mismatch appears in governance. The city’s 32 community school districts were drawn for a much larger student population. Today, the twelve smallest districts together enroll fewer pre-K–8 students than the three largest districts combined, yet each maintains its own superintendent, administrative offices, and support staff. Central administration employed 2,277 people in fiscal 2025 at a cost of roughly $448 million.
The obstacles to reform are specific — and they sit in Albany, at the bargaining table, and within the city’s own approval process.
District consolidation is effectively barred. State law prohibits any county from having fewer community school districts than it had when the provision took effect, locking NYC into 32 districts regardless of enrollment.
Consolidation also collides with the class‑size mandate, which requires more classroom space even as enrollment declines. The IBO estimated meeting staffing requirements would cost $1.6–$1.9 billion annually; a minority report from the Class Size Working Group puts the construction bill at $17–$22 billion. The city recently secured a two-year delay — but that only sets a deadline by which it must comply, obtain another extension, or persuade Albany to amend the law.
School mergers face a different constraint: collective bargaining. When two schools combine, the teacher contract determines who is excessed, where they transfer, and whether the receiving principal has any say. The city can shed a building but must keep the staff — precisely where projected savings were supposed to come from.
Another obstacle is procedural. State law requires an educational impact statement, public hearings, and a formal vote before any school closure or major change in utilization — months of process even for uncontested mergers.
These barriers explain why structural reform is so rarely attempted, even as demographic trends make it increasingly necessary.
After ending school closures, the de Blasio administration committed more than $750 million to improving low‑performing schools in place. Evaluations found little effect.
The Adams administration continued the pattern. The city funds schools per student; when enrollment drops, budgets are supposed to adjust. During the pandemic, the de Blasio administration suspended that rule under “hold harmless,” allowing schools to keep full budgets regardless of enrollment, with federal relief covering the difference. When stimulus funds expired, Adams kept the policy using city funds — after a brief attempt to phase it out collapsed under backlash. Declining enrollment carried no financial consequence.
Redesigning the system around current enrollment means fewer districts, fewer half‑empty buildings, and a smaller central office. Bringing half the students in under‑enrolled schools up to average per‑pupil funding would free roughly $109 million, before savings on maintenance and operations. A 10 percent cut to central administration — about 228 positions — would save another $26 million.
School quality must also drive reform. The city once measured performance directly, adjusting for demographics and imposing consequences for failure. That ended under de Blasio. Reinstating accountability would allow consolidation based on quality as well as enrollment.
More money will not fix the educational problems NYC faces. Mayor Mamdani should focus less on new programs and more on right‑sizing the system — merging empty schools, consolidating districts, and grading schools on results. Doing so will require Albany’s permission and the city’s willingness to take on the hard work of fixing the nation’s largest school system.