Testimony

February 14, 2017

Joint Legislative Budget Hearing - Elementary and Secondary Education

Introduction

NYSASBO is strongly disappointed with the Executive Budget proposal. Walking away from a complete phase-in of the Foundation Aid formula has significant consequences for students in high need schools. In 2007, when the state committed to the Foundation Aid formula, the numbers used were based on the real costs of providing students with an adequate education. It’s not enough to implement a “progressive” funding scheme if it falls far short of providing the resources needed to educate all students.

 

Foundation Aid

The partial phase-in of the Foundation Aid formula began the process of sending additional resources to schools in need. This was accompanied by improvements in high school graduation rates, which grew nine percentage points over the next five years, though graduation rates continue to lag for black and Hispanic students, English language learners, and students with disabilities. While we celebrate these improvements, we also know they show the potential gains of renewing the commitment of a full Foundation Aid phase-in.

NYSASBO recently analyzed student performance and found a disturbing link between school district wealth and graduation rates. Graduation rates in low need districts were 30 percent higher than in high need districts. When looking closer at variations in district fiscal capacity using NYSED’s Combined Wealth Ratio, we found even greater achievement gaps. School districts in the lowest wealth decile graduated 70 percent of their students, while districts in the wealthiest group graduated 94 percent of their students. The graduation rate increases gradually as fiscal capacity increases, with the exception of the one including New York City with its high level of student poverty despite, overall, average wealth. Disparities are even greater for children entering high school. In 8th grade standardized tests, for schools with the least wealth, seven percent of students scored proficient or better in math and 20 percent scored proficient or better in English language arts. For 8th grade students in the wealthiest group, 55 percent scored proficient or better in math and 67 percent scored proficient or better in English language arts.

These dramatic achievement gaps are closely linked with Foundation Aid still due. After factoring in the proposed increases in the Executive Budget, across districts in all high-need categories, average Foundation Aid still due is $1,460 per student; in high need urban and suburban districts, which face the largest gap, it is $3,109 per student.

 

Changes in the Components of the Foundation Aid Formula

At the same time that the governor wants to move away from the Foundation Aid commitment, his budget makes several improvements to how the formula is calculated. The three most important changes are:

  • Using small area income and poverty estimates from the Census Bureau in place of data from the 2000 decennial census that is no longer collected, which will provide a more up-to-date calculation of children living in poverty within a given district.
  • Incorporating direct certification data in place of free and reduced lunch program data, which provides a more accurate measure of poverty. The Executive Budget proposes the state begin collecting this data, presumably with a move to implementation when three years of data are available.
  • Removing the lower cap on the Income Wealth Index. The index now ranges from 0-2. More than half of all districts have scores lower than the previous .65 cap; this includes many of the poorest districts in the state. The updated measure more accurately reflects the lack of wealth in districts in need.

NYSASBO’s task force on Foundation Aid recommended all three of these changes in its state aid proposal and report, “Supporting Our Schools: A Study of New York State Foundation Aid.” These modifications are important and helpful, but only have lasting value if they are linked to full implementation of the formula to the amounts needed for success.  Eliminating the phase-in severs this link and dashes the hope of tens of thousands of New York’s children.

 

Proposed Increase in State Aid is Insufficient

The Executive Budget proposes a $961 million increase in school aid, which is far short of what is needed even to maintain existing services. In its analysis of education-specific costs and general economic trends, the Educational Conference Board, of which we are a part, determined a $1.7 billion increase will be necessary just to maintain current programs for 2017-18. NYSASBO calls for a $2.1 billion increase, with $1.2 billion focused on Foundation Aid. Our budget proposal is as follows:

Proposal

Cost

Foundation Aid Phase-In*

$1,191,810,094

Estimated Formula Enhancements*

$33,333,333

ELL Categorical

$100,000,000

Save Harmless

$253,184,777

Estimated Expense-Based Aids

$350,000,000

Subtotal

$1,928,328,204

Additional Requests

 

Career and Technical Education*

$25,391,946

Increase in Child Nutrition Reimbursement*

$25,000,000

Strategic Resource Use Grants*

$500,000

Prior Year Adjustments*

$106,598,671

Subtotal

$157,490,617

Total Increase Requested

$2,085,818,821

*Three year proposal

State aid is increasingly important because of significant variation in local resources and the constraint the tax cap has on local school budgets. 

 

Tax Cap Adjustments

For 2017-18, the allowable tax levy increase is 1.26 percent, marking the fourth consecutive year the tax cap is under 2 percent. The significant fluctuations in the tax cap create a lot of uncertainty for local districts: over the past three years, the tax cap was 1.62 percent, 0.12 percent, and for the coming year 1.26 percent. Fixing the allowable levy increase at 2 percent accomplishes the tax cap’s original goal while insulating districts from these swings.We also advocate for formalizing laws enacted in 2015 that were never implemented, including reflecting growth in taxable properties that result in Payments in Lieu of Taxes (PILOTs)  as well as excluding school district expenses for the cost of BOCES classroom construction from the tax cap. The 2015 law gave the commissioner of taxation and finance the discretion to implement these modifications and they were never enacted. 

 

Mandate Relief

The Executive Budget includes provisions for districts to seek a waiver from some special education requirements in order to implement alternative programs. We encourage the legislature to provide other mandate relief like eliminating duplicative fingerprinting requirements for school bus drivers that perform other jobs in the district, streamlining internal audit requirements and providing incentives for shared transportation between districts. 

 

Other Recommendations

Restoring the state commitment to the full phase-in of the Foundation Aid formula is NYSASBO’s central concern with the Executive Budget. Other changes we advocate include:

  • Universal pre-K programs: We support the governor’s proposed consolidation of existing pre-K programs. Merging the Universal and Priority pre-K programs will make it easier for schools to provide consistent, quality education for pre-K students. 
  • Improving child nutrition: We welcome the governor’s support of $500,000 for farm-to-school programs, but believe the state needs to increase its reimbursement rate for school lunches, which has been frozen at six cents for 40 years. Raising the reimbursement rate to 25 cents for schools that buy healthy, local food will strengthen local economies and improve children’s health and well-being. This “Drive for 25” initiative will cost the state $75 million, which we recommend phasing in over three years.
  • Strategic resource use: Providing grants to educational organizations to identify the most efficient use of resources will promote cost-effective practices and improve educational outcomes.
  • Paying off prior year adjustments: We recommend the state pay off prior year adjustments in a timely manner. These payments occur when claims are changed after the end of the claim year; adjustment reasons include updated or corrected data. The state currently budgets approximately $18 million a year for prior year adjustments, which means that it can take almost 20 years for approved claims to be paid.
  • Mid-year aid reductions: We oppose the executive proposal to, without legislative input, reduce aid mid-year if receipts are low.

 

Conclusion

The clear link between resource and achievement gaps makes restoring the Foundation Aid phase-in the central issue in the current budget. A commitment to full implementation over the next few years will make possible the constitutional promise of an adequate education for all children in the state. To download PDF version

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