Why Cuomo's proposed 3% aid boost wouldn't be that for most districts

by Brian Fessler

On Board Online • February 5, 2018

By Brian Fessler
Deputy Director of Governmental Relations

The initial media coverage of Gov. Andrew Cuomo's eighth executive budget proposal touted a proposed 3 percent increase in education spending. That percentage exceeded the self-imposed state spending growth cap of 2 percent and is double what would have been allowed under a state benchmark called the personal income growth metric.

However, if your school district is one of the approximately 175 across the state slated for an operating aid increase of only 0.25 percent, the governor's plan to improve educational investments probably is of little comfort.

The governor's executive budget included restrictions on how the new money can be spent and includes millions in funding for the charter school industry. So if this proposal were enacted, school districts across the state would still face difficult decisions regarding increasing local tax levies, making spending cuts, or both.

Recognizing that the executive proposal is a floor, not a ceiling for educational spending, here are the details every board member should know about the governor's proposal.

What's included in a proposed $769 million increase?

Faced with a projected state budget gap of more than $4 billion, Cuomo proposed a $168 billion state budget including $769 million in additional school aid. A review of the governor's briefing book and accompanying budget legislation detailed how that number was reached. A bit less than half the amount would be provided through an increase in foundation aid of $338 million, bringing the operating aid category up to $17.5 billion statewide. (That's more than 10 percent of the entire state budget.)

Notably, this would be the sixth straight year school districts see a collective foundation aid increase of at least $100 million. However, it would still leave the state $3.9 billion behind full funding for more than 400 districts.

Within the proposed foundation aid increase, the governor would expand the practice of restricting the use of some of those funds, known as a "set-aside," for funding community school programs. The executive proposal would set-aside $50 million of the 2018-19 foundation aid increase, to bring the total community school set-aside within foundation aid to $200 million statewide.

More than a third of the districts in the state would have some portion of the foundation aid restricted for use in community schools, under the governor's plan. This would leave just $288 million of the proposed foundation aid increase as truly unrestricted aid.

That increase would be distributed with a single-year formula, under which every district would receive a minimum increase of 0.25 percent, with a handful of districts receiving an increase of 5 percent or more.

The executive budget would continue to fully fund expense-based aids, which are state reimbursements for a variety of school districts expenses, including transportation, capital construction, BOCES and special education. Based on current data, this would provide $317 million over 2017-18 amounts. A few minor aid categories are also included in that figure. But while the governor proposed to fund those reimbursements in 2018-19, he also included a plan to cap the growth in some of those categories in 2019-20 and beyond.

Targeted funding for initiatives

The budget proposal also included targeted funding for a number of initiatives that have seen increased investments by state policymakers in recent years. These included $15 million for new prekindergarten programs for 3- and 4-year-olds, $10 million for an estimated 6,000 new seats in after-school programs and an additional $9 million for early college high school programs. Less than $20 million in total was proposed for a variety of other programs, including funding to support the governor's recently announced Breakfast After the Bell initiative.

In addition to the 3 percent school aid increase, $23 million in new funding is proposed to support the charter school industry in New York City.

That still leaves $64 million of the proposed $769 million increase unaccounted for.

The governor has proposed that money be a "fiscal stabilization fund." The money would be directed for school district use, but no details are available. The fund also lacks any distribution formula, meaning there is no way to know how much any single district would receive. That also explains why this funding is not listed anywhere on any district's state aid runs.

"This is actually a strategy the governor has used multiple times in recent years as part of his executive budget proposals," said Julie Marlette, NYSSBA's director of governmental relations. "The funding is then negotiated between the Legislature and the governor, allowing the Legislature to increase direct school aid for school districts (the money often becomes additional foundation aid) without requiring the governor to fit higher overall amounts of education funding within the state budget."

In addition to a potential cap on state reimbursements, the governor also made policy proposals that could affect district finances.

Legislative hearings to listen to feedback on the executive budget have already begun. NYSSBA delivered testimony on the education portion of the budget on Jan. 31. The deadline for an on-time approved budget is April 1.

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