Fact-checking Cuomo, Nixon on school aid, tax incentives and college tuition

ISSUE: Has New York met its school funding obligations per a 2003 court order?

BACKGROUND: New York’s highest court in 2003 ordered the state to spend more money on New York City schools to ensure a “sound, basic” education. A later appeal set the number at $1.9 billion for city schools. Then-Gov. Eliot Spitzer offered a multiyear plan in 2007 to boost spending for the city and needy urban schools around the state by around $7 billion through a dedicated fund called “Foundation Aid.” Then came the 2008 stock market meltdown and subsequent cuts to education.

CUOMO: Gov. Andrew M. Cuomo contends that the terms of the court decision have been met, that the lone specific, mandated outlay was the $1.9 billion to the city and that the state has increased funding far more than that over the last 12 years (about $27 billion statewide for K-12 currently compared with roughly $19 billion in 2007). He points out a state court in 2017 largely rejected a lawsuit by advocates that claimed the funding promises — on a statewide basis — were never met. He contends the New York City school district isn’t poor as a whole but rather has a mix of well-funded and poorly funded schools and more attention should be paid to equity within the district.

NIXON: Cynthia Nixon agrees with advocates who assert the state “owes” New York City and other districts about $6 billion (if you count the original judgment plus interest). Since the recession-triggered cutbacks, the spending gap between rich and poor districts has increased, she says. She proposed boosting K-12 funding by $4.2 billion over the next three years to fulfill the Foundation Aid promise. She’d pay for it by raising income taxes on those couples earning $500,000 or more annually and restoring corporate tax rates to 9 percent (currently at 6.5 percent).

REALITY CHECK: Cuomo has been accused of splitting hairs in claiming the original funding obligation has been met. While the state has sent more money to New York City, the ambitious, statewide plan of 2007 never was fully enacted — statewide, Foundation Aid has increased from $14.9 billion then to about $17 billion now, far below the $7 billion increase envisioned. But the 2008 recession and courts’ subsequent rulings limiting the original award placed both practical and legal roadblocks to a significant spending increase. Nixon’s plan hinges on Democrats’ retaking the Republican-led Senate and agreeing to go as far as she would on taxes.

ISSUE: A recent report finds New York gives out more in tax incentives to businesses than any other state. Yet the incentives haven’t proven especially effective. Gov. Andrew M. Cuomo says incentives are needed to woo businesses; his election rivals say they often waste taxpayers’ dollars.

BACKGROUND: The Upjohn Institute, an independent research organization, issued a report in 2017 evaluating economic incentives offered by states. It found New York provided the most ($8.2 billion, without including a film-tax credit that would’ve pushed the figure higher) in the study. A previous study by the Citizens Budget Commission, a watchdog group, showed New York relying more and more on discretionary, targeted grants and less on across-the-board tax cuts.

CUOMO: Under Cuomo, New York has become more aggressive in offering grants for targeted industries and specific businesses. Economic development incentives more than doubled from 2010 to 2014 (from $3.3 billion to $7 billion). Among the most high-profile was the $750 million for the SolarCity project in Buffalo. His administration also has handed out annual grants to regional economic councils he created in his first year, earmarked for specific projects such as a YMCA in Wyandanch and an automated warehouse for a grocery chain in Suffolk County. “Businesses don’t come to New York state without government incentives,” Cuomo said recently. “Why? Because they can get them from any other state.”

NIXON: Democratic challenger Cynthia Nixon said Cuomo’s approach has been “misguided” and tainted by corruption convictions associated with some high-profile projects. She says the state has handed out billions of dollars of incentives but failed to produce the number of jobs promised. Her economic platform calls for fewer subsidies and incentives and more oversight of existing giveaways. She would focus on a higher statewide minimum wage, and shift spending away from economic development and toward infrastructure and institute a “pollution tax” to help pay for it.

REALITY CHECK: Cuomo is correct in saying states are competing with one another to lure businesses. The Upjohn study estimated 33 states spent about $45 billion in 2015 — about three times the value of incentives in the 1990s. But the governor is overstating when he says companies won’t come to New York without giveaways. The Upjohn study found local tax incentives impacted siting decisions only 20 percent of the time. More often, location, transportation and number of skilled workers were bigger factors. Further, the CBC found the state didn’t track companies well on their job promises and sometimes softened the job-number requirements. It concluded the broad shift to direct grants “has not been justified” by the results.

ISSUE: Has New York truly made public colleges “tuition free” and how many students are participating?

BACKGROUND: New York already had a “Tuition Assistance Program” that essentially made college tuition free for families earning $50,000 or less annually. The new “Excelsior Scholarship,” approved by Gov. Andrew M. Cuomo and state legislators in 2017, gradually raising the income limit to $125,000 annually. Prior to that, the idea of “free tuition” gained national attention in Sen. Bernie Sanders’ 2016 presidential campaign. Tuition at the SUNY system is $6,670 annually for four-year schools. The  Excelsior program doesn’t cover housing and fees, which can run another $15,000 or more.

CUOMO: The governor says the Excelsior Scholarship is the first in the nation to make public universities tuition free. But besides income limits, it also mandates other qualifications. Students must take and pass 30 hours of courses per year (not including any remedial courses) and, importantly, graduate within four years. Residents also must live and work in New York for four years after graduation, otherwise the grant converts to a loan. Cuomo said the conditions are meant to ensure students progress to graduation and deter any from moving to New York just to get free tuition.

NIXON: Cynthia Nixon says calling public colleges “tuition free” is an overstatement because so few qualify. She would change the rules to lower the class hours mandate to 24 (and include remedial courses), eliminate the graduate-in-four-years mandate and remove the residency mandate. She said her plan would greatly expand the number of students who can attend tuition-free; she’d pay for it by raising tax rates for households earning $500,000 or more annually and for corporations.

REALITY CHECK: About 60,000 students already were going to New York’s public colleges tuition free, thanks to the Tuition Assistance Program. The Excelsior Scholarship basically expanded it to families earning between about $50,000 and $125,000  annually. In the first year, nearly 21,000 students received Excelsior awards — but that’s a small share of the 440,000 full-time students at New York’s four-year universities and two-year community colleges. A recent survey found the course requirement was the biggest hindrance for students — nearly twice as many applicants were rejected for insufficient credits as were accepted. Further, the bulk of college costs (dorms, fees) aren’t covered. In sum, SUNY schools aren’t tuition-free; Excelsior made public colleges more affordable for a small segment of New Yorkers.