Governor's budget pulls back on foundation aid progress

On Board Online • February 5, 2024

By Brian Fessler
Director of Governmental Relations

This year, school districts in New York State are seeing the benefits of full funding of foundation aid for the first time since the formula was enacted in 2007. But when Gov. Kathy Hochul released her 2024-25 executive budget proposal on Jan.16, foundation aid was on the chopping block for hundreds of districts across the state.

The top line school aid figures might seem healthy enough as the governor proposed a year-over-year increase of $825 million, or 2.4%.

The $825 million figure included a proposed $507 million increase in foundation aid plus a $318 million increase from the current full funding of expense-based and other traditional categorical aids (e.g., transportation aid and BOCES aid).

But the proposed $507 million increase for foundation aid would fall far short of the more than $900 million increase needed to maintain full funding per formula. And that is before consideration of any guaranteed minimum increase.

"We're disappointed that the governor's proposal falls hundreds of millions of dollars short of full funding," said NYSSBA Executive Director Bob Schneider.

What's behind these numbers? First, the governor chose to use a 10-year average inflation figure (dropping the highest and lowest years) rather than benchmarking off the inflation rate of the previous year. As a result, the executive budget factors in inflation of 2.4% while the foundation aid formula would project 3.8%.

Second, the executive budget proposal would use a district wealth-based calculation in order to reduce foundation aid for 337 districts. Meanwhile, 336 districts would see a year-over-year increase. (See on.ny.gov/3S8Y6gG .)

Previously, the state has observed a "save harmless" approach that has avoided foundation aid cuts.

"Save harmless is a school funding strategy that ensures no districts receive less foundation aid than they did in the previous year, recognizing that all districts face increasing costs each year," Schneider said. "The governor's proposal to eliminate save harmless represents a significant and frustrating departure from a long-standing practice."

During her budget presentation, Gov. Hochul noted a 12% decline in K-12 enrollments over the past decade as a factor in her recommended approach.

"It is well known that we spend vastly more on education per student, right now more than any time in history, more than any state," she said. "And it's common sense to ensure that the schools are getting the appropriate money based on their enrollments today compared to what they were a decade and a half ago."

"Unfortunately, the economics at the school level are different than what the governor describes," said NYSSBA President Sandy Ruffo, a member of Broome-Tioga BOCES since 1995. "If an enrollment decline results in, say, three third-grade classes being reduced to two in a specific school, the district can eliminate a teaching position and save money. But relatively small, annual drops in enrollment seldom reduce staffing needs. Meanwhile, we desperately need specialists such as school psychologists, reading teachers and tutors to help students make progress, especially after the pandemic."

"We will ask the Legislature to avoid forcing districts to absorb these unanticipated reductions," Schneider said. "Districts are already grappling with the upcoming expiration of federal stimulus funding."

Moreover, there are questions about the adequacy of the existing foundation formula. This fall, NYSSBA joined Educational Conference Board (ECB) colleagues in calling for New York State to commence a review of how foundation aid now operates.

"We support comprehensive revisions to the state's foundation aid formula," Ruffo said. "The state should update antiquated demographic data to ensure the state delivers on its constitutional obligation to provide a sound basic education for all students."

The executive budget proposal did not include any permanent updates or changes to the statutory foundation aid formula, nor did the governor propose a review as requested by the ECB.

On a more positive note, the executive budget proposal maintains full funding of the state's expanded school meals investment, as first included in the 2023-24 state budget.

The executive budget also contained a few modest proposals aimed at improving education, including a "Back to Basics" literacy initiative.

The plan would direct the State Education Department (SED) to provide school districts with instructional best practices for the teaching of reading to students in prekindergarten through third grade that are evidence- and scientifically-based, and aligned with the culturally responsive-sustaining framework.

Beginning in 2025, all school districts would be required to annually review their Pre-K-3 reading curriculum and instructional practices and to certify to SED that their curriculum, instructional practices and professional development are aligned with best practices.

Additional proposals include funding to support expansions of school-based health centers, adjustments to the calculation of transportation aid to allow for more financial support for districts during the required transition to zero emission school buses, an improvement to how school districts can use prekindergarten funding and additional investments in the state's cybersecurity response efforts.

Additional budget details, as well as NYSSBA's reactions to the proposals can be found here: bit.ly/42e0yaq .