Rockefeller Institute recommends changes in school foundation aid


On Board Online • December 16, 2024

By Eric D. Randall
Editor-in-Chief

The state Legislature should update the way it calculates and distributes aid, according to a 314-page report by the Rockefeller Institute of Government.

School districts "should remain 'on formula' rather than be provided options to remove themselves from the formula's provisions," according to the report, which was required by the 2024 state budget.

The report, released on Dec. 2, recommends the Legislature:

  • Eliminate a guaranteed minimum state payment of $500 per student, which "steers more than $41 million in foundation aid to 45 of the state's wealthiest districts."
  • Reduce the use of "save harmless" funding - a statutory guarantee of level funding, even when the funding formula calculates an amount less than the previous year.

Currently, "337 districts rely on the guarantee of save harmless aid payments rather than calculations of the formula," the report notes.

The report notes that after the creation of foundation aid in 2007, researchers found a "clear relationship between spending and student performance on both the New York State Assessment and the Regents test."

Regarding disparities in academic performance among student subgroups, the report quotes the Fiscal Policy Institute - "The perpetuation of educational inequality ties directly to high levels of child poverty" - and recommends better use of poverty data to drive funding.

NYSSBA Director of Governmental Relations Brian Fessler noted the report echoes NYSSBA's longstanding position that many components of the foundation aid formula need updating, including poverty data, regional costs and inflation, as well as the costs of serving English language learners and special education students. The report also echoes NYSSBA's calls for elimination of most "set asides" - portions of foundation aid that can be spent only on specific programs, such as community schools.

Some specific recommendations include calls to:

  • Have the state "fully underwrite the cost" of the mandated transition to zero emission buses.
  • Use rolling averages and multi-year phase-ins to improve predictability and reduce volatility.
  • Reduce allocations to school districts with large fund balances. ("Require districts retaining more than 10 percent of their budget as a year-end balance to apply the excess as an offset to save harmless allocations.")
  • Allow school districts to temporarily retain up to 10% of their budgets as an unrestricted year-end fund balance if they have a plan for spending these funds that is: (1) approved by local voters; (2) has a spend-down plan no longer than five years; and, (3) is approved by the State Education Department.
  • Create rules to trigger reductions of save harmless under certain conditions. ("Establish a per-pupil local income and property wealth threshold above which districts would not be eligible for full save harmless aid payments. Similarly, establish an enrollment-loss threshold at which school districts would face reductions in save harmless allocations.")
  • Replace the current measure of student performance (Regents exam data) with a three-year average district-wide pass rate (Level 3 + Level 4) on the state's English language arts and math exams in grades 3-8.
  • Create separate aid categories to address needs involving students with disabilities, geographic sparsity and acute enrollment growth.

The report notes schools today are obligated to provide more kinds of support and services than ever before, including providing more mental health services.

Read NYSSBA's summary of the report at bit.ly/3OILs6H . Read the report in its entirety at www.rockinst.org/foundation-aid-study .




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