Foundation Aid is the primary formula New York State uses to distribute education funding to school districts to ensure they have the resources necessary to provide a sound basic education. This page covers CBC's work on Foundation Aid formulas, the distribution of expense-based aids, strategies for targeting high-need districts, the impact of hold-harmless provisions, and the implementation of performance management systems for school districts.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The State should restrain State education spending—nearly $40 billion annually—to make it affordable and better targeted to high-need districts.
The State should phase out hold harmless provisions to better target Foundation Aid to districts based on need.
The State should revise outdated indices to better target Foundation Aid to districts based on need.
The State should remove arbitrary floors and ceilings in the Foundation Aid formula to better target aid to districts based on need.
The State should eliminate the STAR program because it directs more per-student funding to high-wealth districts.
The State should improve the local share calculation to capture actual local spending and address the current formula’s undercounting.
Key Data
In a January 2025 report, the CBC noted that formula-based Foundation Aid grew 9.2% per year, representing a $5.6 billion increase from $18.4 billion in school year 2020-21 to $24 billion in school year 2023-24.
In January 2025, the CBC reported that during the 2023-24 school year, the State provided $2.8 billion in school aid to districts that already fully fund a sound basic education using their own local and federal revenues.
According to a July 2024 policy brief, statewide enrollment has declined by more than 9% since Foundation Aid was introduced, with declines in 91% of districts. Despite this, the hold harmless provision led to an average 162% increase in per-student Foundation Aid in 17 districts where enrollment fell by at least 40% since 2008.
A July 2024 analysis highlighted that the local poverty metric used in the pupil needs index comes from the 2000 Census, failing to reflect demographic changes in school districts over the past 24 years.
In July 2024 testimony, the CBC pointed out that Foundation Aid has a minimum funding level of $500 per pupil, which guarantees that even the wealthiest school districts receive State funding regardless of their self-funding capacity.
New York State's per-student education spending is the highest in the nation, yet student performance remains middle-of-the-pack, indicating that increased funding has not yielded commensurate academic results. To improve outcomes, the State should shift from simply increasing school aid to rigorously examining resource allocation, enhancing oversight and accountability, and better targeting funds to districts with the greatest need.
Recommendations related to Foundation Aid
The State should conduct more rigorous analyses to identify the reasons behind New York’s lackluster student performance and examine the relationships between human and fiscal resources, curriculum, student needs, accountability systems, and achievement.
The State should rigorously examine and, as beneficial, reform its accountability system, including the needs assessments developed for poor-performing schools, the interventions intended to improve performance, and methods it uses to hold districts accountable.
The State should identify and implement ways to enhance its support and technical assistance to promote and spread best practices.
The State should examine whether district-led improvement plans are as effective as those developed by the New York State Education Department.
Resources should be better targeted based on need, as current aid is often sent to the wealthiest school districts that already fully fund a sound basic education.
Key Data
$36,293
— New York's average per-student spending in the 2024-25 school year.
$89 billion
— Total amount New York school districts are set to spend in the 2024-25 school year.
$2.8 billion
— Amount of state aid provided in school year 2023-24 to districts that already fully fund a sound basic education with local and federal revenue.
29%
— Increase in the State’s portion of per-student school spending—including Foundation Aid, expense-based aid, and the School Tax Relief (STAR) program—since the 2020-21 school year.
91%
— Amount by which New York's per-student spending in 2021-22 exceeded the national average of $15,633.
21%
— Increase in per-student spending since the 2020-21 school year.
New York spends nearly $40 billion annually on education, yet the current funding formula sends over $2 billion to wealthy districts that do not need it. To ensure sustainable and equitable school funding, the state should reform its aid formulas by eliminating programs like STAR and phasing out "hold harmless" provisions to better target resources toward high-need districts.
Recommendations related to Foundation Aid
The State should restrain State education spending—nearly $40 billion annually—to make it affordable and better targeted to high-need districts.
The State should phase out hold harmless provisions to better target Foundation Aid to districts based on need.
The State should revise outdated indices to better target Foundation Aid to districts based on need.
The State should remove arbitrary floors and ceilings in the Foundation Aid formula to better target aid to districts based on need.
The State should eliminate the STAR program because it directs more per-student funding to high-wealth districts.
The State should improve the local share calculation to capture actual local spending and address the current formula’s undercounting.
Key Data
$40 billion
— Annual State education spending that needs to be restrained to make it affordable and better targeted.
$2 billion
— Amount sent annually to districts that already provide a sound basic education with their own and federal resources.
New York State's school aid formulas, including Foundation Aid, often fail to distribute funds based on actual student need and local capacity, leading to inequitable outcomes. Reforming these formulas to better account for local circumstances and reallocating funds from programs like STAR and expense-based aids would ensure resources are directed to the districts that need them most.
Recommendations related to Foundation Aid
The State should quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.
The State should revise the expected local contribution to be the higher of the district’s actual contribution or the district’s fiscal capacity.
The State should update district poverty estimates and regional cost measures for a more accurate assessment of need.
The State should remove arbitrary floors and ceilings that distort the funding distribution of Foundation Aid and expense-based aid categories.
The State should adjust aid for library, textbooks, and software to account for district wealth either by modifying the formula or folding the funding into Foundation Aid.
The State should eliminate High Tax Aid to better allocate resources.
The State should eliminate the STAR program to better allocate State resources to where they are needed most.
Key Data
$135 million
— Amount shifted to the 268 districts with the lowest wealth by reallocating certain expense-based aids proportional to the current Foundation Aid formula.
$3.3 billion
— Total annual School Tax Relief (STAR) funding that could be reallocated proportional to districts' share of Foundation Aid.
$501 million
— Amount of STAR aid currently received by the 201 lowest-wealth districts (bottom 30 percent).
$1 billion
— Amount STAR aid would double to for the 201 lowest-wealth districts if reallocated proportional to Foundation Aid.
$942 million
— Amount of STAR aid currently received by the 203 wealthiest districts (top 30 percent).
$1,805
— Statewide student transportation expenditures per student in 2022, the highest of any state.
New York's school aid formulas, including Foundation Aid, rely on outdated data and arbitrary constraints that fail to accurately reflect local fiscal capacity or student needs. Reforming these formulas to better account for local spending obligations and redistributing funds like the STAR program proportionally to need would ensure a more equitable allocation of education resources.
Recommendations related to Foundation Aid
Formulas should more accurately estimate a district’s capacity and willingness to raise revenue and should use the actual local contribution as the expected minimum local contribution when it exceeds the estimate.
Calculations of local fiscal capacity should account for localities’ other spending obligations—including State mandates such as Medicaid, and others driven by economic or social factors—by adjusting the expected local contribution.
Indices of need and regional cost should be updated regularly and be sufficiently granular to capture variation.
The State should eliminate the hold harmless provision and arbitrary floors and ceilings in the formula.
School districts’ building and transportation costs should be explored further to identify reforms that would incentivize efficiency of spending and to improve the funding distribution to better reflect local needs and resources.
Key Data
152
— Number of school districts that contributed enough local resources to provide a sound basic education before receiving any State aid in the 2023-24 school year.
$8 billion
— Cost of the State-run Medicaid program shifted to counties and local taxpayers.
$6 billion
— Total amount of Building and Transportation Aid, the two largest expense-based aid categories.
$447 million
— Amount allocated in Library, Textbook, Software, and High Tax Aids in the 2024-25 school year without accounting for local wealth.
$3.3 billion
— Amount of education funding shifted from locally-raised property tax revenue to the State each year via the STAR program.
$501 million
— Amount of STAR funding received by districts in the bottom three deciles of wealth last year.
New York's current school aid system, including Foundation Aid, relies on outdated formulas and provisions like "hold harmless" that direct funds to wealthy districts rather than those with the greatest need. Reforming these mechanisms, including eliminating programs like the School Tax Relief (STAR) and High Tax Aid, would allow the state to better align education spending with actual student needs and fiscal capacity.
Recommendations related to Foundation Aid
Quickly phase out the hold harmless provision to align Foundation Aid with district enrollment and wealth.
Revise the expected local contribution to be the higher of the district’s actual contribution, or the district’s fiscal capacity.
Update district poverty estimates and regional cost measures for a more accurate assessment of need.
Reassess arbitrary floors and ceilings in formulas to ensure they are limited to extreme situations.
Allocate library, textbook, and software aids based on wealth by modifying the formula or folding the funding into Foundation Aid.
Eliminate High Tax Aid to address its regressive allocation and lack of a clear function.
Eliminate the School Tax Relief (STAR) program to better allocate State resources to where needed most.
Key Data
$2 billion
— Amount of State aid sent every year to districts that already spend enough local resources to provide a sound basic education.
9 percent
— Statewide enrollment decline since Foundation Aid was introduced in 2008.
$500
— Minimum funding level per pupil in Foundation Aid.
36 percent
— Maximum state contribution for expense-based aids like BOCES.
$224 million
— Funding for library, textbook, and software aids.
New York's school aid formulas, including Foundation Aid, are outdated and fail to accurately direct resources based on student needs and local fiscal capacity. Reforming these systems by eliminating provisions like 'hold harmless' and the School Tax Relief (STAR) program would better align state funding with actual district requirements and fiscal health.
Recommendations related to Foundation Aid
Quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.
Revise the expected local contribution to be the higher of the district’s actual contribution, or the district’s fiscal capacity, which should be better measured.
Update district poverty estimates and regional cost measures for a more accurate assessment of need.
Remove arbitrary floors and ceilings that distort the funding distribution of Foundation Aid and expense-based aid categories.
Adjust aid for library, textbooks, and software to account for district wealth either by modifying the formula or folding the funding into Foundation Aid.
Eliminate High Tax aid.
Eliminate the School Tax Relief (STAR) program to better allocate State resources to where needed most.
Key Data
$38.6 billion
— Total funding for school districts through Foundation Aid, expense-based aids, and the School Tax Relief (STAR) program for the upcoming school year.
$16 billion
— The amount by which the State's structural budget gap will exceed by fiscal year 2028.
$2.8 billion
— State aid provided in the 2023-24 school year to districts that fully fund a sound basic education before receiving a single dollar from the State.
$10.4 billion
— Total expense-based aids for the current year, including funding for building construction, student transportation, and vocational programs.
$3.3 billion
— Estimated cost of the School Tax Relief (STAR) program for the next year.
$20.6 million
— Additional funding provided for expense-based aids due to arbitrary floors, with 81 percent flowing to the wealthiest 40 percent of school districts.
New York State's Foundation Aid, the largest category of school aid, has seen rapid growth, prompting proposals to phase out the 'hold harmless' provision and adjust inflation factors to ensure more sustainable spending. These changes would save $413 million while still providing $38.1 billion in total school aid, though the state continues to allocate $2.4 billion to districts that already self-fund a sound basic education.
Recommendations related to Foundation Aid
The Legislature should enact a fiscal year 2025 budget that brings State school aid growth to a more sustainable level.
The State should phase out the hold harmless provision to allow Foundation Aid to be more reflective of changing demographics.
The State should shift some of its expense-based aid to Foundation Aid to target funding based on need rather than a district's ability to self-fund.
The State should eliminate the School Tax Relief (STAR) program, which currently results in increased funding for wealthier districts.
Key Data
$413 million
— Savings from proposed changes to the Foundation Aid formula in school year 2024-25.
2.1 percent
— Proposed growth rate for Foundation Aid in school year 2024-25.
$38.1 billion
— Total State school aid in the coming school year under the Governor's proposal.
$2.4 billion
— Amount of State aid allocated to 145 districts that already self-fund a sound basic education.
$15,761
— Per-student State aid amount for the coming school year.
6.8 percent
— Average reduction in Foundation Aid for districts in the highest wealth decile.
State school aid increased by 8.8 percent to $37.4 billion for the 2023-24 school year, with per-pupil funding rising by 10.2 percent. While $2.8 billion is directed to districts that already fully support a Sound Basic Education, an additional $8.6 billion in State aid is allocated to other districts in excess of that level.
Key Data
$37.4 billion
— Total State school aid for the 2023-24 school year.
8.8 percent
— Increase in State school aid from the previous year.
10.2 percent
— Rise in per-pupil State aid.
$2.8 billion
— State aid directed to 152 districts that fully support a Sound Basic Education.
$8.6 billion
— State aid directed to other districts in excess of the Sound Basic Education level.
$9.6 million
— Total Sound Basic Education shortfall for five districts.
New York State's school aid is increasing, driven by the final phase-in of Foundation Aid, despite declining enrollment and significant future budget gaps. The state should reallocate aid from wealthy districts that can already fund a sound basic education to high-need districts and implement a comprehensive performance management system to ensure spending leads to better outcomes.
Recommendations related to Foundation Aid
The State should reduce or reallocate aid to wealthy districts that are able to provide a Sound Basic Education to help stabilize the State’s ongoing finances and better target aid to high-need districts.
The State should have a comprehensive performance management system for school districts that uses robust metrics to track activities and results, identifies and spreads best practices, and appropriately holds districts accountable.
To balance the budget, the State should rein-in spending growth, as poorly targeted school aid is a reasonable option for spending control.
The State should distribute expense-based aids based on need rather than on a per-pupil basis or district spending.
Key Data
$37.4 billion
— State school aid for the 2023-24 school year
$85.8 billion
— Total school spending for the 2023-24 school year
$35,095
— Total spending per pupil for the 2023-24 school year
$2.8 billion
— State aid provided to 152 school districts that already fully fund a Sound Basic Education
$5.6 billion
— Cumulative three-year increase in Foundation Aid
8.8 percent
— Increase in State school aid for the 2023-24 school year
New York State Budget Fiscal Year 2024 Major Actions and Fiscal Risks As of First Quarter Update New York City Fiscal Year 2024 Adopted Budget and Outlook
The upcoming school year marks the final phase-in of Foundation Aid increases, prompting a need for a long-term strategy to ensure equitable and sustainable school aid spending. The State Education Department has requested $1 million to study school aid formulas to better align funding with actual needs.
Recommendations related to Foundation Aid
The State should propose a long-term strategy for equitable and sustainable school aid spending in the upcoming budget.
Key Data
$1 million
— The amount requested by the State Education Department to study school aid formulas to ensure funding is allocated where it is most needed.
New York State is currently phasing in a 32% increase in education aid, but the current allocation model fails to prioritize student need over district spending on transportation and construction. To improve equity and fiscal stability, the state should redirect funds from wealthy districts that receive over $3 billion annually despite having the capacity to self-fund a sound basic education.
Recommendations related to Foundation Aid
The state should better target aid to high-need districts, including money that now reimburses districts on how much they spend for transportation and construction rather than student need.
The state should reevaluate assistance to wealthy districts, especially those that receive over $3 billion annually despite already self-funding a sound basic education.
Key Data
32%
— The percentage increase in education aid that the state started to phase in during 2021.
$3 billion
— The amount of annual aid received by wealthy districts that already self-fund a sound basic education.
New York State increased school aid by 6.7% to $34.4 billion, while per-pupil aid rose by 9.4% due to declining enrollment. Of this funding, $3.1 billion is allocated to 176 wealthy districts capable of supporting a Sound Basic Education independently, while another $10.4 billion is distributed to districts beyond the Sound Basic Education level.
Key Data
6.7%
— The increase in State school aid from $32.2 billion to $34.4 billion.
9.4%
— The increase in per-pupil State aid amid declining enrollment.
$3.1 billion
— The amount of State aid directed to 176 wealthy districts that can fully support a Sound Basic Education with local and federal funding.
$10.4 billion
— The amount of State aid provided to districts in excess of the Sound Basic Education level.
New York State continues to increase school aid, including Foundation Aid, despite many districts already having sufficient local and federal resources to provide a sound basic education. The state lacks a robust performance management system to ensure this significant funding is effectively driving student achievement and narrowing learning disparities.
Recommendations related to Foundation Aid
The State should stop increasing aid to wealthy districts that fund a Sound Basic Education (SBE) through local revenue and regular federal aid.
The State should consider freezing aid to better-off districts which already receive State aid in excess of the amount needed for an SBE.
The State should reform both Foundation Aid and many of the expense-based aids to direct more of the funds to high-need districts.
The State should reduce over time the aid it provides to the highest-wealth districts that already receive enough local and federal funding for an SBE.
The State should implement a robust performance management system to track outcomes, quality, and efficiency of services across districts and require under-performing districts to implement action plans to improve their performance.
Key Data
$34.4 billion
— Total state school aid for the school year.
$3.1 billion
— Amount of state aid directed to 176 districts that already fund a Sound Basic Education with local and regular federal resources.
$13.6 billion
— Total state aid sent to districts above the level needed to fund a Sound Basic Education.
$14.7 million
— Combined funding shortfall for the only four districts remaining below the level needed to provide a Sound Basic Education.
$3.9 billion
— State aid flowing to schools in the top three wealth deciles that is in excess of the amount needed for a Sound Basic Education.
New York State should reform its school aid distribution by shifting expense-based aids toward foundation aid and eliminating 'hold harmless' provisions that benefit wealthy districts. This approach would better target resources to high-need areas rather than continuing to fund districts that can already afford a sound basic education.
Recommendations related to Foundation Aid
The Legislature should work to better target school aid to high-need districts by shifting some expense-based aids to foundation aid.
The State should eliminate the hold harmless provision and restrain aid to wealthy districts that already self-fund a sound basic education.
Key Data
$2.7 billion
— Annual aid received by wealthy districts that already self-fund a sound basic education.
$29.1 billion
— State school aid amount in the current school year, set to increase to $38.4 billion by fiscal year 2027.
$11.4 billion
— Extraordinary federal aid that districts will spend now and over the coming years.
New York State has significantly increased school funding, including Foundation Aid, but lacks adequate management and oversight to ensure these funds improve educational outcomes. The state should implement rigorous performance measurement and accountability processes to ensure that increased spending effectively addresses learning loss and reduces educational disparities.
Recommendations related to Foundation Aid
The State should take significant steps to ensure that the increases in recurring State and non-recurring federal funds, such as Foundation Aid, drive substantial improvements in educational outcomes.
The State should consider significantly restraining the new funds it provides to wealthy districts, particularly regarding increases in Foundation Aid.
The State should manage, expect, and hold districts accountable to improve achievement and reduce educational disparities, using data that it makes publicly available to oversee Foundation Aid allocations.
State leaders should work with districts to set measurable goals to address the disruptions and improve learning outcomes going forward, ensuring that Foundation Aid is tied to performance measurement and management.
The State should be tracking and publicly reporting key data and holding districts accountable for addressing the pandemic’s negative impacts, including mitigating learning loss, to ensure the effective use of Foundation Aid.
Key Data
$2.9 billion
— The amount of the increase in State school aid for the 2021-22 school year.
$11.4 billion
— The amount of extraordinary federal one-time education funding allocated to districts over a four-year period.
$32.5 billion
— The total amount of State school aid for the 2021-22 school year.
$1,155
— The average increase in State aid per pupil on a statewide basis.
$35.9 million
— The combined funding gap faced by six districts to meet their calculated Sound Basic Education need.
New York's current education aid proposals, which include significant increases for all districts, are unnecessary because the state already provides over $1 billion annually to districts that can afford to fund a sound basic education locally. Instead of broad increases, the state should modernize the Foundation Aid formula to better account for local resources and direct funding specifically toward high-need districts.
Recommendations related to Foundation Aid
State increases should be directed toward high need districts, and support for districts raising sufficient local resources should be held flat or reduced.
The Foundation Aid formula should be modernized to account accurately for support by local resources.
To the extent allowed, federal funds should be spread over the coming years to support the transition to a sustainable system that supports a sound basic education for all students.
Key Data
$1 billion
— The amount provided annually by the State to districts that already raise enough resources locally to provide a sound basic education.
7.1 percent
— The increase in total school aid for school year 2021-22 proposed in the Executive Budget using funds from the December federal relief package.
New York should reform its school aid distribution by prioritizing districts that lack sufficient local resources to provide a sound basic education, rather than providing aid to wealthy districts that can already afford it. By incorporating various education aids into a revised Foundation Aid formula and accounting for student need and district wealth, the state can reduce costs while ensuring all students receive necessary funding.
Recommendations related to Foundation Aid
The State should focus on first ensuring that all districts have sufficient funds to provide a sound basic education (SBE), and reduce funds to districts that already have sufficient local resources to meet this requirement.
As the State evaluates measures to close the budget gap, it should first ensure that districts that lack sufficient local resources to meet SBE standards receive the necessary funding.
Decreases in funding should first target districts that do not need State aid to fund an SBE.
By incorporating funding from various education aids into a revised Foundation Aid formula, the State can reduce costs and ensure all districts have the necessary revenues to provide an SBE.
New York should revisit how it distributes its school aid dollars by accounting for student need, district wealth, and total district revenues.
Key Data
$1.6 billion
— State aid received by 129 school districts that already raised enough local revenue to fund a sound basic education.
$1.8 billion
— Amount of education aid proposed to be folded into Foundation Aid in the Executive Budget.
$237 million
— Total cost of library, textbook, and software aids that provide the same amount per pupil regardless of student need or district wealth.
$223 million
— Total cost of High tax aid, which provides more aid to wealthier districts.
129
— Number of school districts that received State aid despite raising enough local revenue to fund a sound basic education.
$1.2 billion
— Decrease in State-funded school aid in the Enacted Budget compared to the Executive Budget.
New York should limit school aid increases to only underfunded districts to ensure a sound basic education, which could save over $750 million compared to the Governor's proposed budget. Additionally, the state should reform the Foundation Aid formula by folding in existing aid streams to ensure funding is distributed based on actual student need rather than preserving outdated allocation methods.
Recommendations related to Foundation Aid
The State should support a sound basic education in every district by increasing school aid by approximately $75 million, if targeted only to underfunded districts.
Limiting school aid increases to only high-need districts would save more than $750 million from the Governor’s proposed $826 million increase.
The State should not undermine Foundation Aid progressivity by layering on less progressive forms of aid.
Ten education aid streams should be folded fully into an improved Foundation Aid formula that distributes all aid based on need.
Key Data
27 percent
— Portion of the State operating budget comprised of school aid.
$75 million
— Amount by which the State could increase school aid to support a sound basic education in every district if targeted only to underfunded districts.
$750 million
— Savings from limiting school aid increases to only high-need districts.
$826 million
— The Governor's proposed increase in school aid.
$1.8 billion
— Total amount of ten education aid streams that the Executive Budget proposes to fold into Foundation Aid.
The Fiscal Year 2021 Executive Budget increases education aid by $826 million, yet fails to adequately target funds to the districts that require them to provide a sound basic education. Furthermore, the proposal to consolidate ten types of state aid into Foundation Aid is flawed because it preserves existing, less progressive allocation methods instead of distributing resources based on actual student need.
Recommendations related to Foundation Aid
The proposal should be improved by distributing the $1.8 billion according to a revised Foundation Aid formula that fully accounts for student need and all revenue sources.
To better distribute all Foundation Aid based on need, the formula should be fixed to more accurately reflect student need and local revenue efforts, relax hold-harmless provisions, and eliminate automatic minimum increases.
The State should fold those aids into the Foundation Aid formula and distribute them based on need.
The State should move forward with controlling building and transportation aid costs while ensuring that schools have what they need to provide a sound basic education.
Key Data
$750 million
— The amount by which the Executive Budget exceeds what is needed to fund a sound basic education statewide.
$13.6 billion
— The estimated amount by which school district spending in 2018 exceeded what was necessary to fund a sound basic education as defined by the Foundation Aid Formula.
$1.8 billion
— The total value of ten different education aids being permanently folded into Foundation Aid.
$30 million
— The funding gap that 13 districts will continue to face despite the proposed aid increases.
$826 million
— The total increase in education aid proposed in the Fiscal Year 2021 Executive Budget.
$72 billion
— The amount school districts in New York spent using local, State, and federal funds in school year 2018.
New York State has increased education aid by an average of 3.7 percent annually, yet wealthy districts with sufficient local resources received $1.6 billion in state school aid during the 2017-2018 school year. To address fiscal imbalances, the state should prioritize directing education funding toward needy districts to ensure a sound basic education is fully funded, rather than exceeding necessary spending levels by $800 million.
Recommendations related to Foundation Aid
New York State should focus education aid on needy districts to fund fully a sound basic education (SBE).
Key Data
$1.6 billion
— Amount in state school aid received by wealthy districts with sufficient local resources in the 2017-2018 school year.
$800 million
— Amount by which education spending increased last year beyond what was needed for each district to fund a sound basic education.
3.7 percent
— Average annual increase in education aid between fiscal years 2011 and 2020, which is twice the rate of inflation.
New York State's Foundation Aid formula is currently flawed due to the use of outdated data, artificial caps, and "hold harmless" provisions that prevent aid from reaching the districts that need it most. While the state spends more than enough in aggregate to provide a sound basic education, redirecting funds from wealthy districts and reforming the distribution formula would ensure resources are better targeted to high-needs areas.
Recommendations related to Foundation Aid
The State should revamp the Foundation Aid formula and other education aid formulas to properly account for local wealth and actual local funding.
The State should eliminate hold-harmless provisions and guaranteed minimum funding increases to prevent aid from being locked into districts regardless of need.
The State should use the most up to date data available when calculating aid distributions.
Expense-based aids and other types of education aid, such as high tax aid, should be redirected towards those districts without the resources to provide a sound basic education.
Key Data
$13.6 billion
— Amount New York spent more than necessary to fund a sound basic education in school year 2017-2018.
$1.8 billion
— Amount the wealthiest decile of districts spent more than needed to fund a sound basic education in school year 2017-2018.
$18.4 billion
— Amount of Foundation Aid in school year 2019-2020, representing two-thirds of state education aid.
$75 million
— Total funding needed to bring the 25 districts that lacked resources to the level needed in school year 2017-2018.
$223 million
— Amount of High Tax Aid specifically targeted to wealthy districts.
$500 million
— Total of other aid streams that would be better utilized if channeled into a revised Foundation Aid formula.
New York's Foundation Aid formula fails to ensure all school districts have sufficient resources to provide a sound basic education, as it relies on outdated poverty measures and misallocates funds to wealthy districts. Reforming this system requires integrating various aid streams into a single formula based on current data and eliminating arbitrary funding limitations.
Recommendations related to Foundation Aid
Poorly targeted forms of school aid, including High Tax, Library, Textbook, and Software Aids, should be folded into a reformed Foundation Aid formula that uses current data—including actual local funding and student enrollment.
The arbitrary floors, ceilings, phase-ins and add-ons to the Foundation Aid formula should be eliminated.
Key Data
$62.6 billion
— Cost for school districts in New York State to provide a sound basic education to all students in school year 2020.
$961 million
— Increase in total formula-based school aid in the enacted Fiscal Year 2020 Budget.
$83 million
— Amount by which 29 school districts are collectively underfunded despite historic state aid increases.
$4.0 billion
— Amount of the $27.3 billion in formula-based aid that the four wealthiest deciles will receive.
$18.4 billion
— Portion of the $27.3 billion in total education aid for school year 2019-2020 that constitutes Foundation Aid.
$223 million
— Amount of additional State aid specifically targeted to wealthy districts via High Tax Aid.
New York State currently spends enough in aggregate to provide a sound basic education, but the Foundation Aid formula fails to accurately target funds to the districts that need them most. Instead of broad increases, the state should prioritize directing aid to the fewer than 30 districts that remain underfunded.
Recommendations related to Foundation Aid
The State should target any increase in aid to those districts that need it most.
The State should address the shortcomings of the Foundation Aid formula, which is undermined by the use of inconsistent local share calculations, arbitrary adjustments, and outdated data.
Key Data
$9 billion
— Amount by which New York education spending exceeds what is necessary to fund a sound basic education.
$6.6 billion
— State aid provided to more than 600 districts that is greater than what is needed for them to fund a sound basic education.
$200 million
— Total funding needed to bring underfunded districts to the level required for a sound basic education.
$150 million
— Aggregate amount of underfunding for the fewer than 30 districts that would remain underfunded after the Governor's school aid proposal.
$33,000
— Average spending per student in the wealthiest decile of districts.
$67 million
— Amount the wealthiest decile of districts appears to be underfunded by due to the shortcomings of the formula.
The New York State Fiscal Year 2018-2019 Enacted Budget increased formula-based school aid by $859 million, with $618 million of that total allocated to Foundation Aid. While all districts received an increase, the distribution varied significantly, ranging from a 1.9 percent minimum increase to an 11.1 percent increase in Uniondale.
Key Data
$859 million
— Increase in formula-based school aid to local school districts in the New York State Fiscal Year 2018-2019 Enacted Budget.
$618 million
— Increase in Foundation Aid over the 2017-2018 school year.
3.6 percent
— Percentage increase in Foundation Aid over the 2017-2018 school year.
1.9 percent
— Guaranteed minimum increase in aid received by 148 school districts.
11.1 percent
— Maximum increase in aid received by a school district, specifically Uniondale in Nassau County.
23.1 percent
— Maximum per-pupil increase in aid, which occurred in Amagansett in Suffolk County.
New York's Foundation Aid formula currently suffers from significant flaws, including outdated demographic data and arbitrary funding floors, which result in excess aid for wealthy districts while poorer districts are shortchanged. To ensure resources are directed where they are needed most, the state should reform the formula by streamlining local share calculations and eliminating guaranteed funding increases.
Recommendations related to Foundation Aid
New York's leaders should direct state aid where it is needed most by students, rather than prioritizing political considerations.
The state should streamline the local share calculation within the Foundation Aid formula to address existing inequities.
The state should repeal arbitrary floors and ceilings currently embedded in the Foundation Aid formula.
The state should update demographic data regularly to ensure the Foundation Aid formula accurately reflects current needs.
The state should repeal any guaranteed amounts or increases in Foundation Aid to ensure funding is distributed based on actual district needs.
Key Data
$26.4 billion
— Executive budget school aid proposal for the 2018-2019 school year.
$17.5 billion
— Total Foundation Aid for the 2018-2019 school year.
$338 million
— Increase in Foundation Aid for the 2018-2019 school year.
$2 billion
— Amount advocates are calling for as an increase in Foundation Aid.
0.25 percent
— Minimum increase included in the new formulas for school aid.
The current school aid formula relies on flawed calculations that distribute excessive funding to wealthy districts rather than those in need. The state should reform the Foundation Aid formula to better target resources while reprogramming expense-based aid to ensure all districts can provide a sound basic education.
Recommendations related to Foundation Aid
The Enacted Budget should reform the Foundation Aid formula to direct aid where it is needed most and reprogram expense-based aid into it.
Key Data
$769 million
— The amount by which school aid growth exceeds the cap on a school year basis.
3.0 percent
— The rate at which school aid is growing.
$26.4 billion
— The total amount of school aid.
$338 million
— The portion of the school aid increase that is Foundation Aid.
44 percent
— The percentage of the school aid increase that is Foundation Aid.
Making changes to Foundation Aid formula would better help school districts most in need while avoiding providing unnecessary amounts of funding to the wealthiest districts. CBC's David Friedfel explains. Watch the original segment here .
New York's proposed education budget increases school aid by $769 million, yet fails to address fundamental flaws in the Foundation Aid formula that result in inequitable distribution across districts. The state should prioritize reforming these formulas to better target funding toward high-need districts rather than continuing to send aid to wealthy areas or simply capping expense-based categories.
Recommendations related to Foundation Aid
The State should reform the Foundation Aid formula to address the flaws that distort the total distribution of $17.5 billion in aid, rather than simply layering additional funding on top of the existing distribution.
The State should distribute expense-based aid funds through a revised Foundation Aid formula to encourage districts to allocate resources to the highest priority needs, rather than just limiting growth in those aid categories.
The State should reform the Foundation Aid formula to ensure the highest-needs districts are properly funded without unnecessarily sending aid to the wealthiest districts.
Key Data
$769 million
— The total increase in school aid proposed in the New York State Fiscal Year 2018-2019 Executive Budget.
$26.4 billion
— The total amount of school aid proposed in the New York State Fiscal Year 2018-2019 Executive Budget.
$338 million
— The amount by which Foundation Aid is proposed to increase.
$17.5 billion
— The total proposed amount of Foundation Aid.
$119 million
— The amount the State would save by imposing a growth limit on Building Aid in school year 2018-2019.
$132 million
— The amount the State would save by imposing a growth limit on BOCES and Transportation Aids in school year 2018-2019.
The FY2019 Executive Budget relies on short-term fixes and fails to address long-term structural spending issues. Regarding education, the budget fails to enact fundamental reforms to the Foundation Aid Formula, instead continuing to rely on a flawed $17 billion distribution with only minor adjustments.
Recommendations related to Foundation Aid
The State should implement fundamental reforms to the Foundation Aid Formula.
Key Data
$17 billion
— The existing flawed distribution of Foundation Aid.
$338 million
— The increase in Foundation Aid proposed in the budget.
New York State should reform its school aid distribution by eliminating High Tax Aid and redistributing Library, Textbook, and Software Aids through the Foundation Aid formula to better target high-need districts. Currently, these aid categories fail to account for district wealth, often benefiting wealthier districts more than those with the greatest needs.
Recommendations related to Foundation Aid
New York State should redistribute Library, Textbook, and Software Aids through the Foundation Aid formula to ensure high-need districts receive appropriate funding.
The state should eliminate High Tax Aid, which currently drives funding to the wealthiest districts rather than those with the greatest needs.
Policymakers must reform or eliminate education aid categories that fail to properly account for district wealth and student needs.
Key Data
$17,170,232,253
— The total amount of Foundation Aid distributed to local school districts during the 2017-2018 school year.
$242,805,328
— The total cost of Library, Textbook, and Software Aids to state taxpayers in the 2017-2018 school year.
$223,228,324
— The total amount of High Tax Aid provided to certain school districts in the 2017-2018 school year.
$323
— The average per pupil amount of High Tax Aid received by the wealthiest decile of school districts.
$100
— The average per pupil amount of High Tax Aid received by the poorest decile of school districts.
The state should implement substantive changes to the $17 billion Foundation Aid formula to ensure limited resources are directed toward the districts with the highest needs. This approach would improve upon the previous year's budget, which increased total school aid by $1 billion, or 4.2 percent, but left the formula largely unchanged.
Recommendations related to Foundation Aid
Governor Cuomo should propose substantive changes to the $17 billion Foundation Aid formula to direct limited resources to the highest needs districts.
Key Data
$17 billion
— The total value of the Foundation Aid formula.
$1 billion
— The amount by which the 2018 Budget increased total school aid.
4.2 percent
— The percentage increase in total school aid in the 2018 Budget.
The 2017-2018 New York State budget increased school aid by $1.1 billion, but failed to reform the Foundation Aid formula, which continues to inequitably distribute funds by favoring wealthier districts over those with higher needs. Comprehensive modifications are necessary to ensure the formula fulfills its purpose of providing resources for a sound basic education regardless of a district's local wealth.
Recommendations related to Foundation Aid
The Foundation Aid formula should be reformed to ensure that students receive the resources necessary to achieve a sound basic education regardless of a district’s wealth.
The state should implement more comprehensive modifications to the formula to adequately fund education in all districts without excessive state spending.
The state should direct funding toward low-wealth, high-need districts rather than providing guaranteed minimum increases for all school districts regardless of need.
Key Data
$25.8 billion
— Total school aid authorized in the Enacted State Budget for Fiscal Year 2017-2018.
$1.1 billion
— Increase in school aid over the previous year.
$17 billion
— Total amount of Foundation Aid, which grew by 4.25 percent.
$130 million
— Total sum of 'Additional Increases' provided to 507 of 674 districts.
$2.8 billion
— Amount of funding that would have been directed toward low-wealth, high-need districts under proposed reforms.
$569 million
— Proposed increase in total spending over 2016-2017 levels under recommended reforms.
New York State is operating under an emergency budget that extends spending levels from the previous fiscal year while introducing new items like $2.5 billion for water infrastructure. This temporary measure creates uncertainty for local governments and school districts, highlighting the need for a prompt agreement that includes reforms to the Foundation Aid formula and improved fiscal discipline.
Recommendations related to Foundation Aid
The Legislature and Governor should promptly come to an agreement that includes needed reforms to the State’s Foundation Aid formula.
New York's Foundation Aid formula is flawed due to inconsistent local share calculations, arbitrary adjustments, and outdated poverty measures, which misallocate resources. Reforming the formula to better target aid would require a modest $569 million increase in state funding, rather than the $3.8 billion requested by advocates.
Recommendations related to Foundation Aid
A single method should be used that applies a uniform local tax factor and adjusts only for one other factor – the local Medicaid financing burden.
Hold harmless provisions, phase-in percentages, caps, and other arbitrary adjustments in the current formula should be eliminated.
Increasing the weighting for poverty from 0.65 to 0.75 in the calculation of the Pupil Needs Index (PNI) incorporated in the formula would more appropriately distribute Foundation Aid.
The current system can and should be improved in order to promote the wisest use of tax dollars by local school boards and administrators; this means promoting use of evidence-based strategies and requiring quantifiable results.
Wealthier districts with aid reductions would consider spending less on nonessential services or increasing local support to sustain those services.
Key Data
$569 million
— The amount of additional annual State funding required to support a sound basic education in all of New York’s school districts under a reformed formula.
$3.8 billion
— The amount of additional annual State funding requested by advocates for the Foundation Aid program.
$2.7 billion
— The amount of funding that would be redirected to needy districts under a reformed formula.
$1.9 billion
— The net loss in Foundation Aid that districts in the wealthiest five deciles would experience under the proposed reforms.
$16.5 billion
— The total amount of Foundation Aid in school year 2016-2017.
$6,340
— The foundation amount per pupil for the 2016-2017 school year.
New York's current education funding formula fails to ensure a sound basic education for all students because it maintains aid for all districts regardless of their existing spending levels. By reforming the Foundation Aid formula to redirect $2.7 billion toward high-poverty districts, the state could meet its constitutional obligations with only $569 million in additional funding rather than the billions requested by advocates.
Recommendations related to Foundation Aid
The state should adopt a new formula that transforms how education funds are distributed to better aid needy districts.
The state must return Foundation Aid to its intended purpose of directing aid to the neediest school districts.
The state should fix the Foundation Aid formula and redirect $2.7 billion to needy districts to ensure a sound basic education.
Key Data
$4.3 billion
— Additional funding requested by advocates for the next year.
$2.1 billion
— Additional funding proposed by the Board of Regents.
$430 million
— Additional funding provided through Foundation Aid in the governor's budget.
$24 billion
— Existing annual aid provided to local school districts.
$569 million
— Additional funding needed if the Foundation Aid formula is fixed.
$2.7 billion
— Amount of funding that should be redirected to needy districts under a reformed formula.
The current school aid distribution formula relies on flawed calculations and excessive add-ons that disproportionately benefit wealthy districts rather than those with the greatest need. The state should reform the calculation method to ensure that Foundation Aid is targeted specifically toward less affluent districts.
Recommendations related to Foundation Aid
The final adopted budget should direct Foundation Aid where it is needed most—among less wealthy districts.
Key Data
$961 million
— The amount by which the Executive Budget increases school aid on a school year basis.
3.9 percent
— The rate at which total school aid is raised to $25.6 billion.
$25.6 billion
— The total amount of school aid following a 3.9 percent increase.
$428 million
— The portion of the school aid increase that is Foundation Aid.
45 percent
— The percentage of the school aid increase that is Foundation Aid.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
The current Foundation Aid formula in New York State is fundamentally flawed, as it relies on arbitrary constraints and outdated measures that disproportionately benefit wealthy districts while failing to direct resources to those with the greatest need. Rather than addressing these systemic inequities, the proposed executive budget would cement these disparities by freezing aid distributions and abandoning the original goal of ensuring a sound basic education for all students.
Recommendations related to Foundation Aid
The state must implement substantial reforms to the Foundation Aid formula to alleviate current inequities rather than making them permanent.
Policymakers should fix the problematic features of the Foundation Aid formula to ensure scarce state dollars are directed to the districts that need them to provide a sound basic education.
The state should reallocate funds to fully fund all districts under Foundation Aid by correcting the formula's flaws, which would require an additional $569 million.
Key Data
$569 million
— The additional cost required to fully fund all districts under Foundation Aid if the formula's problematic features were corrected.
$4.3 billion
— The amount some advocates claim local districts are owed in Foundation Aid, a figure that the analysis suggests overstates the needed increase.
$16.5 billion
— The total amount of Foundation Aid, representing more than two-thirds of all school aid.
$428 million
— The proposed increase in Foundation Aid for the 2017-2018 school year.
The Fiscal Year 2018 Executive Budget includes reforms to the Foundation Aid formula that adjust poverty data and metrics to better target high-need districts, though concerns remain regarding the continued allocation of funds to affluent areas. Furthermore, the freezing of Foundation Aid for the 2019 school year creates uncertainty regarding future formula functionality and expected district aid.
TWC News The Board of Regents is calling for a $1.2 billion increase in school funding next year, including nearly $1.5 billion for foundation aid. However, he Citizens Budget Commission says there is a much cheaper way to help low-income students.
This document presents a comparative analysis of current and proposed Foundation Aid allocations for school districts across New York State. It details the specific financial impact of the proposed formula changes on each district, highlighting significant shifts in funding levels for major urban centers like New York City, Buffalo, and Rochester.
Key Data
$7,127,295,629
— New York City's current Foundation Aid
$7,772,835,891
— New York City's proposed Foundation Aid
$495,297,048
— Buffalo's current Foundation Aid
$641,786,599
— Buffalo's proposed Foundation Aid
$407,548,638
— Rochester's current Foundation Aid
$546,896,223
— Rochester's proposed Foundation Aid
New York State's fiscal year 2017 budget includes a 6.5% increase in school aid, yet this funding fails to prioritize the highest-need districts through the foundation aid formula. Instead of targeting resources to those with the greatest requirements, the budget prioritizes the restoration of the gap elimination adjustment.
Key Data
6.5%
— Growth in school aid that is not targeted to the highest need districts through foundation aid.
New York's proposed school aid budget allocates only 27 percent of the increase through Foundation Aid, the primary mechanism for addressing resource disparities, while continuing to favor wealthier districts through expense-based reimbursements. The state should prioritize directing more funding through Foundation Aid and reform long-standing issues like hold harmless provisions to better target resources to the neediest districts.
Recommendations related to Foundation Aid
Too little weight is given to directing resources through Foundation Aid, the State’s best mechanism for targeting aid to the neediest districts.
The State should address long-standing problems with the distribution of school aid, such as hold harmless provisions and generous reimbursements for school transportation and construction expenses that misdirect aid.
Fundamental issues with the aid formulas, as well as redirecting resources through Foundation Aid, should be addressed in the coming budget negotiations.
Key Data
27 percent
— The portion of the Governor’s proposed school aid increase that would be distributed through Foundation Aid.
$991 million
— The total school aid increase, of which about 20 percent would be allocated through restorations to the Gap Elimination Adjustment.
More than $400 million
— The amount of the school aid increase that would flow through expense-based reimbursement formulas, which favor wealthier, higher-spending districts.
$100 million
— The amount of new Community Schools Aid allocated to districts with failing schools and other high-need districts.
$715 per student
— The average school aid increase for the poorest 10 percent of New York school districts.
$149 per student
— The average school aid increase for the wealthiest 10 percent of New York school districts.
This school year New York State will spend $23.5 billion on aid to school districts, accounting for 25 percent of the state-funded operating budget. The State’s role in K-12 public education is critical to offsetting disparities in local wealth and student need, yet numerous problems remain in the state school…
New York's fiscal year 2016 budget increased annual formula-based school aid by $1.3 billion, yet the distribution disproportionately favors wealthier districts over needier ones by prioritizing Gap Elimination Adjustment restorations. The state continues to ignore fundamental flaws in aid formulas, including hold harmless provisions and excessive reimbursements for transportation and construction, which misdirect resources away from districts with the greatest needs.
Recommendations related to Foundation Aid
The State should address long-standing problems with the distribution of school aid, such as hold harmless provisions that misdirect aid.
The State should reform generous reimbursements for school transportation and construction expenses that misdirect aid.
The State should address fundamental issues with the aid formulas in the coming year.
Key Data
$1.3 billion
— The total increase in annual formula-based aid to school districts in the fiscal year 2016 state budget.
$603 million
— The amount of funding steered to wealthier districts through restorations to the Gap Elimination Adjustment.
9.2 percent
— The average aid increase per student received by the most affluent 10 percent of New York school districts.
4.8 percent
— The average aid increase per student received by the neediest 10 percent of New York school districts.
The fiscal year 2015 New York State budget increased school aid by $1.1 billion, surpassing the statutory cap linked to personal income growth and reaching a total of $21.8 billion. This funding includes $251 million for foundation aid and $602 million in Gap Elimination Adjustment restorations, which critics argue are not well targeted to the neediest schools.
Key Data
$1.1 billion
— Increase in school aid for school year 2014-15.
$251 million
— Added for foundation aid.
$602 million
— Increase delivered through Gap Elimination Adjustment (GEA) restorations.
$21.8 billion
— Total aid in school year 2014-15.
$1.6 billion
— Total increase in school aid including unallocated funds.
$552 million
— Amount of school aid increase above the Governor’s Executive Budget proposal.
New York State's proposed $21.9 billion education budget relies on flawed distribution formulas that disproportionately benefit wealthier districts and those with shrinking enrollment rather than prioritizing student need. To ensure equitable funding, the state should abandon the Gap Elimination Adjustment restoration approach and instead funnel operating aid through up-to-date foundation formulas.
Recommendations related to Foundation Aid
State leaders should adjust the distribution to give more to the districts with the neediest students and least ability to pay on their own.
The GEA restoration approach should be abandoned, and operating aid should be funneled through up-to-date foundation formulas.
Operating aid should be funneled through up-to-date foundation formulas.
The formulas that distribute expense-based aid should be refined to reduce costs and to be better targeted.
Key Data
$807 million
— Proposed increase in education aid from school year 2013-14 to 2014-15.
$204 million
— Portion of the proposed increase allocated for special initiatives not distributed by formula.
$323 million
— Amount distributed as a partial restoration of the Gap Elimination Adjustment.
$280 million
— Additional funding allocated to categories covered by expense-based formulas.
3.9 percent
— Proposed year-to-year growth rate for expense-based aid.
2.4 percent
— Proposed year-to-year growth rate for Foundation aid.
Governor Cuomo's fiscal year 2013-14 Executive Budget proposes a $889 million increase in total school aid, raising the total to $21.1 billion. Of this increase, $611 million is designated for formula and categorical aid, with $550 million specifically allocated through school aid formulas for foundation and expense-driven categorical aids.
Key Data
$889 million
— Total school aid increase in the fiscal year 2013-14 Executive Budget.
$20.2 billion
— Total school aid in school year 2012-13.
$21.1 billion
— Total school aid in school year 2013-14.
$611 million
— Increase in formula and categorical aid.
$203 million
— Amount designated for a one-time fiscal stabilization fund.
$550 million
— Amount allocated through school aid formulas for foundation and expense-driven categorical aids.
New York State's school aid distribution is heavily influenced by historical 'hold harmless' provisions that prevent funding from adjusting to current district needs, such as declining enrollment. Consolidating small school districts and reforming aid formulas to reflect actual student counts could improve efficiency and reduce unnecessary spending.
Recommendations related to Foundation Aid
New York State should consolidate school districts with low enrollment, such as those with fewer than 300 or 900 students, to achieve economies of scale.
The state should reform 'hold harmless' provisions that prevent aid from dropping below prior-year levels, ensuring funding aligns with current student enrollment.
Policymakers should re-examine legacy aid commitments that persist despite significant changes in local wealth or student population.
Key Data
$20.4 billion
— Expected state aid to school districts in the 2012-13 school year.
40 percent
— Average portion of total school district budgets comprised of state aid.
7 to 20 percent
— Potential savings from consolidating school districts with low enrollment.
22 percent
— Enrollment decline in the Albion school district since 2006.
New York's proposed $805 million school aid increase is poorly targeted, with current formulas for foundation and categorical aid failing to prioritize the neediest districts. To ensure funds effectively boost student achievement, the state should prioritize distributing aid through the foundation aid formula while limiting categorical aid and competitive grants.
Recommendations related to Foundation Aid
To help high need districts recover from two years of cuts, the proposed $805 million increase should be highly targeted to the neediest districts by relying heavily on distribution through the foundation aid formula.
Categorical aid should be frozen or subject to a tight growth cap; the competitive grant program should be much smaller, if not eliminated.
In coming years, all the formulas for distributing school aid should be reexamined.
A full-on effort to retool the school aid formulas should be launched.
Key Data
$805 million
— Governor’s proposed state aid increase for school districts.
$290 million
— Increase in foundation aid proposed by the Governor.
$265 million
— Addition in categorical aids proposed by the Governor.
$250 million
— Amount for new competitive performance grants.
$2.2 billion
— Amount school aid was cut from its $21.7 billion peak in school year 2009-10.
17.6 percent
— Statewide average reduction in foundation aid per student from school year 2009-10 to 2011-12.
In order to promote fiscal reform, the Citizens Budget Commission (CBC) convened three separate agenda-setting conferences for key stakeholders in the state budget process in 2007. Each session focused on one aspect of fiscal reform with a goal of identifying specific changes for the coming budget cycle. The expectation is…
