State fulfills 16-year-old promise to fully fund foundation aid

On Board Online • May 15, 2023

By Matt DeLaus
Governmental Relations Representative

Late in the evening on May 2, more than a month after the state constitution's deadline, the New York Legislature finished voting on the state's 2023-24 budget. Gov. Kathy Hochul signed the bills into law the next day.

The budget is remarkable in a number of respects, beyond being the latest budget approval past the April 1 deadline since 2010.

The 2023-24 budget is the state's largest ever, coming in at over $229 billion, or a 4.1% increase from last year. A large driver of the increase was the $2.95 billion increase in education spending (bringing total education spending to $34 billion).

That increase, in turn, was largely driven by a $2.63 billion increase in foundation aid funding, which reflected full funding of the foundation aid formula plus a guarantee that all districts will receive at least a 3% increase in their total foundation aid over last year. The total annual foundation aid spending will be nearly $24 billion.

The full-funding milestone was reached 16 years after the foundation aid formula was created in 2007. At the time, then-Gov. Eliot Spitzer and legislators agreed to a four-year phase-in plan. The Great Recession halted that plan, which made foundation aid a focal point of education advocacy in New York for the following decade. In 2021, as a result of that continued advocacy and an influx of federal funds, the state budget included a three-year phase-in plan, which has now been achieved.

There were some side issues in foundation aid, including the governor's proposal that a set-aside be created for high-impact tutoring. "We spoke against the set-aside, and we are pleased that it was not included in the enacted budget," said NYSSBA President Peggy Zugibe. "On the other hand, we were unsuccessful in persuading the Legislature to re-examine the funding formula, in order to prepare for the next era of school funding."

Much has changed since the formula was first created nearly two decades ago. The current formula partially relies on U.S. Census data from the year 2000, even though individual communities and the state as a whole has changed significantly in the past 23 years, and two other censuses have occurred. Other aspects of the formula use data fixed in time or face challenges with accurate data collection.

"NYSSBA, along with other members of the Educational Conference Board, will communicate with stakeholders to study revisions to the formula, in hopes of seeing the result of those efforts in budget negotiations next year," Zugibe said.

In addition to changes to the state's bail laws, a high-profile item that led to delay in budget approval was the issue of charter schools. Originally, Gov. Hochul had proposed to lift regional caps on charter issuances, which would have increased the potential number of charters by as many as 85. Much of the focus was in New York City, where charters have hit the regional cap. With public school advocates united and the Legislature pushing back, the enacted budget contains provisions that will allow for the re-issuance of 22 revoked charters statewide (14 in New York City), without further increasing the overall regional cap.

The final budget did not include funding for statewide universal meals, as had been fiercely advocated for by NYSSBA and many education and hunger advocates. But the budget significantly expands potential growth in free breakfast and lunch service. It allocates $134 million to cover local expenses associated with participation in the federal Community Eligibility Provision. Current federal proposals could also ultimately increase the number of schools accessing this new state funding.

In addition to full funding of expense-based aids (e.g., transportation, building and special education), the budget includes $150 million in new funding to support pre-kindergarten programs for four-year-olds. Of the new funding, $50 million will be available by competitive grant to expand districts' number of full-day slots. The final budget also includes $20 million to support the establishment of new early college high school (ECHS) and Pathways in Technology ECHS (P-TECH) programs, with a focus on computer science, nursing and/or teaching.

In addition, the state Office of Information Technology Services received a more-than 50% increase in funding to provide cybersecurity services to local governments. "We were pleased to see $2.5 million to conduct a comprehensive study of alternative tuition rate-setting methodologies for special education programs and schools, including special act school districts," said NYSSBA Executive Director Robert Schneider. The final budget also amended the governor's proposal for the study to make the potential outcomes more realistic for the state's special act districts.

Regarding reporting requirements, NYSSBA was successful in advocating to allow the duplicative building-level reporting requirement to expire in June of this year. In addition, the executive's proposed reporting requirements on food procurement were not included in the enacted budget. However, the final budget included reporting requirements for district progress on the zero-emission bus transition, as well as a requirement to annually report the number of students participating in pre-kindergarten.

NYSSBA was again successful in advocating for a one-year waiver of the public retiree earnings cap, which will allow retirees to work in schools without being penalized in terms of their pension benefits.

The Legislature did not address a NYSSBA priority involving the BOCES aidable salary cap and did not increase special services aid. "These items remain on our advocacy agenda," said Brian Fessler, director of governmental relations.

One more notable budget provision is the ban on building equipment and systems that use fossil fuels in new buildings. The ban takes effect in 2026 for buildings under seven stories, other than those greater than 100,000 square feet, and for all buildings by 2029. These requirements may be foregone if the local grid does not have the capacity to support all-electric.

Full details on the final budget agreement can be accessed through NYSSBA's comprehensive analysis here: bit.ly/42C33Cq .