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2017-18 Executive Budget Analysis with State Aid Runs - Updated

Governor Cuomo presented his Executive Budget to the public on January 17. The FY 2018 Executive Budget allocates $961 million in State Aid to school districts.

 

Aid Category Change (in millions)
Additional Foundation Aid
     $50 Million Community Schools Set-Aside
$428
Reimbursement for Expense-Based Aids/Other $333
Fiscal Stabilization Fund $150
Empire State After-School Program $35
Expanded Pre-K for Three- and Four-Year-Olds $5
Early College High Schools $5
Other Education Initiatives $5
Total School Aid $961

 

In its school aid proposal, NYSASBO recommended a $2.1 billion overall increase in education aid for 2017-18, including a three-year phase in to fully fund the Foundation Aid formula. The Executive Budget recommends that Foundation Aid be increased by $428 million, an amount that does not cover the increase resulting from inflation and other data changes from 2016-17 to 2017-18. The governor’s proposal essentially replaces the foundation aid formula with a new formula based on prior year aid plus a base increase and a community schools aid increase for districts with failing or persistently failing schools or a concentration of English language learners.

While this includes some improvements NYSASBO had recommended, such as using direct certification data and small area income and poverty estimates to improve the measurement of student poverty, the change is troubling because the link to full foundation aid would be severed. The phasein to full foundation aid was a top priority of the NYSASBO Foundation Aid Task Force, and aid proposals advanced by NYSASBO, the Regents and the Education Conference Board. The governor’s proposal sets aside $50 million of the Foundation Aid increase to be used for community schools, putting the total amount set aside for community schools at $150 million.

NYSASBO, the Educational Conference Board and the Regents recommended that the state fully fund expense-based aids. The Executive Budget concurs, requesting $333 million for this task.

The Executive Budget allocates $22 million to be used to create a new tier of Charter School Transitional Aid to reimburse school districts for tuition payments made to charter schools.

The governor also proposed that the State allocate an additional $35 million for public after-school programs in the State’s 16 Empire State Poverty Reduction Initiative communities, this would bring the total funding of these programs to $100 million annually. In addition, the Executive Budget includes a $5 million increase to expand prekindergarten programs in high-need school districts. Preference for these funds will be given to high need districts which currently do not have prekindergarten programs.

A chart comparing the Executive Budget proposal to proposals from NYSASBO, the Regents, and the Educational Conference Board can be found here.


The Division of Budget has released school aid runs for the 2017-18 year based on his Executive Budget Proposal. They can be found here or in traditional format here. 

Update: January 27, 2017

NYSASBO and other members of the Educational Conference Board (ECB) met recently with Executive Chamber staff to get clarification on several items in the 2017-18 Executive Budget proposal.

 
Why did the Governor’s proposal break the connection with the full phase- in of the Foundation Aid proposal?
 
The Governor’s office staff responded that they have retained and improved many aspects of the formula that NYSASBO and the Regents had recommended (such as eliminating the .65 floor on income wealth to calculate the local share of foundation aid, and using direct certification and small area income and poverty estimates instead of FRPL and 2000 Census data).   The executive proposal targets more than 80 percent of the foundation aid increase to high need school districts, which they said was more progressive than the current formula.  In addition, every district got a minimum 1 percent increase to address stability.
 
The phase-in targets they argue are aspirational and not necessary to provide a sound basic education to all students.   The courts had accepted the low Zarb Commission targets of a $1.9 billion increase in state aid to the New York City School District as satisfying the requirements of the Campaign for Fiscal Equity (CFE) court case, which had already been met in 2007.  That the Governor and Legislature went beyond that amount in their enactment of the 2007 formula was not binding into the future.
 
NYSASBO commentary.   The Foundation formula enacted in 2007 was an adequacy formula to provide the resources so that all of New York’s children could have the opportunity to meet state learning standards. Adequacy differs from equity.  Equity is providing funds fairly and in ways that give certain groups of students more resources because they have been documented to need more time and help to meet learning standards.  Adequacy is linking funds to a particular performance standard such as being successful with state learning standards.  Adequacy includes equity, but equity does not necessarily include adequacy.  The 2007 formula met the demands of our constitution, which has an adequacy clause: the state shall provide a system of schools “wherein all the children may be educated.”   
 
The Governor’s proposal provides an equity solution to school funding.  By eliminating the connection to the phase-in he is eliminating the adequacy of the funding formula and the connection of funding to the goal of educating all kids.  The phase-in is determined by looking at real spending on real students in a cost study that has been updated every three years.  The amounts identified in the cost study, when provided to school districts, represent an unwritten contract between the state and school district that if the state provides the resources and the school district manages the money effectively, that the school district will achieve the performance success with students.  Current data show that the resource and achievement gap is increasing and that student needs are growing.

Legal advocate and attorney Michael Rebell has vehemently protested the state’s rationale and claims the executive proposal disregards students’ constitutional rights.  ECB’s chair John Yagielski, said that by eliminating the phase in the Governor is taking away the hope of many students from poverty backgrounds that education will prepare them to be successful.  NYSASBO agrees and will advocate vigorously for the reinstatement and implementation of the foundation aid phase-in.
 
Can you clarify if the Community School’s set asides enacted in 2016 and the increase proposed by the governor for 2017-18 can be used to fund existing services?
 
The laws of 2016 enacted a $100 million foundation aid set aside to support the transformation of school buildings into community hubs “to deliver co-located or school-linked academic, health, mental health, nutrition, counseling, legal and/or other services to students and their families, including but not limited to providing a community school site coordinator, or to support other costs incurred to maximize students' academic achievement.”  We learned that the law requires funds to be restricted to specific community based schools.  The $50 million increase can be used to fund either new programs or what currently exists.  The Governor’s staff also clarified that the set-aside amount included on the Governor’s first run was from the $50 million increase proposed by the Governor. Staff noted that the 2017-18 language is more restrictive than the 2016-17 law.
 
Did the governor adopt the Regents proposal for consolidating Universal Pre-Kindergarten? 

Essentially yes.  The Governor has proposed consolidating into one program the Universal Prekindergarten and Priority Full-Day and Expanded Half-Day Prekindergarten Programs, giving districts 2017-18 aid equivalent to the sum of aid they received from these programs in 2016-17.
The Executive Budget includes the Regent’s proposal of using the allocation process for the UPK program begun in 1997 and absorbing other separate funds into this formula with certain enhancements for quality indicators, which were part of the Priority Full-Day program and which the Department also supports.  This means the program will be funded at $385 million plus funds from the Priority Full-Day program, which was set to expire, for a total allocation of $415 million.

What are the $150 million Fiscal Stabilization Grants for?  

This is an amount set aside for additions by the Legislature to be negotiated into the final budget.

Why is there language in the Governor’s aid to localities budget bill allowing the governor to control mid-year reductions?

There is language in almost all parts of the Executive Budget that would allow the Director of the Budget to reduce state spending in response to any potential mid-year reductions in either federal support or state revenue.   

What does the Governor’s proposal say about school districts accepting partial payments of taxes? 

Part F (page 45) of the Governor’s Article VII Revenue Bill would allow school districts to receive partial payment of taxes.   Partial payments would only be allowed until the close of the warrant, for most districts, October 31.  Districts could opt out of partial payments even if the municipality that collects the taxes chooses not to.  What this does is allow the district to accept a partial payment.  So if a taxpayer owed $1000 and paid $800, for their own cash flow reasons, the district could accept the $800 and the tax payer would still be obligated to pay the balance ($200) plus interest and a $10 fee.  This would affect the time when the warrant was active (for most districts September and October) and would not change the process the rest of the year.  For districts where counties collect taxes on their behalf, the financial benefit or loss would accrue to the county since they reimburse school districts for unpaid taxes.

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