Headline : District access to state aid increases to be subject to DOB, SED approval |
On Board Online • April 23, 2018
By Julie M. Marlette
Director of Governmental Relations
The final enacted state budget included a proposal many feared but few thought would be included: a requirement that every school district report to the state the amount budgeted per pupil in each school building.
The reporting requirement will be phased in over three years. If a given district's report is found incomplete or noncompliant (or is not received), the district's state aid increase can be withheld until the report is deemed compliant by both the state Division of the Budget (DOB) and the State Education Department (SED).
Reports must follow a format to be developed by DOB in consultation with SED. Each district must include "uniform decision rules regarding allocation of centralized spending to individual schools from all funding sources." Reports must include demographic data, per-pupil funding and each school's source of funds.
"This adds another layer of reporting beyond federal ESSA requirements," said NYSSBA Executive Director Timothy G. Kremer, "ESSA requires school-level expenditure reports, period. New York has come up with new requirements involving a school budget level allocation report, oversight by two state agencies and potential withholding of state aid increases based on a subjective judgment by either agency that a district has failed to fully comply."
The state approach emerged from the framework of a more modest proposal. Gov. Andrew Cuomo's executive budget proposal included a provision that, if adopted, would have required the Big 5 City school districts, along with any district with nine or more buildings that receives 50 percent or more of its aid from the state, to seek state approval of their building-level, per-pupil allocations, or forfeit their state aid increase for the year.
While the Assembly rejected this proposal outright, the Senate advanced a milder version, calling for only the Big 5 to submit their per-pupil, building-by-building budgets. Under the Senate proposal, there would have been no state approval and no link to aid.
NYSSBA opposed both the Senate and executive proposals. "The big issue is local control," said NYSSBA President Bill Miller. "We see this as an infringement on district budgeting autonomy, and that has to be opposed no matter how many districts would be affected."
When the final details of the now enacted budget were released, a far more sweeping proposal prevailed. Beginning with the 2018-19 school year, any district with at least four schools that receives at least 50 percent of its total revenue through state aid will be required to annually report its budgeted support for individual schools within the district.About 76 districts will have to file reports in year one. In 2019-20, this requirement will expand to all districts with at least four schools, regardless of state aid. This will bring the total number of reporting districts to just above 300.
In 2020-21, the requirement will apply to all districts in the state, including districts with only a single building.
In all cases, districts will have to file reports by the beginning of the school year and the state will have 30 days to respond.
While DOB or SED will not formally approve districts' school-based budgets, DOB and SED will have authority to determine whether or not the information was provided in a timely and sufficient manner.
"What's 'sufficient' is in the eye of the beholder," Kremer said. "If DOB or SED doesn't like or understand the way a district chooses to allocate funds among buildings, it can withhold state aid increases, effectively forcing local districts do things their way."
If either DOB or SED determines that a district has not properly complied, the district will have 30 days to "cure" the problem. In the event the problem is not cured in 30 days, another level of government gets involved. In cities, the city comptroller or chief financial officer will be authorized, at his or her discretion, to gather information and submit on behalf of the district. If a school district is located outside a city, the chief financial officer in the municipality where the school district is most located would be authorized to intervene.
DOB and SED are expected to provide guidance on this requirement, although no timeline has been released.
"NYSSBA will work with DOB and SED to ensure that districts get the details as quickly as possible, to allow for maximum time between voter approval of most budgets in May, and the beginning of the school year," Miller said.