School funding formulas determine how New York State and New York City distribute billions of dollars in education aid to local districts and schools. This page covers CBC's work on Foundation Aid, the School Tax Relief (STAR) program, enrollment-based budgeting, expense-based aid categories, and strategies for targeting resources based on student need and local fiscal capacity.
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 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The State should revise outdated indices to better target Foundation Aid to districts based on need.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 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 accurately capture how much districts actually support schools.
Key Data
In August 2024, the CBC noted that the STAR program shifts $3.3 billion of annual education funding to the State, but its design favors wealthier districts; in the 2024-25 school year, districts in the bottom three wealth deciles receive $501 million in STAR aid while districts in the top three wealth deciles receive approximately $942 million.
A July 2024 analysis showed that the hold harmless provision decouples funding from enrollment; since its implementation, statewide enrollment has declined by more than 9%, with enrollment declining in 91% of districts, yet in 17 districts with at least a 40% enrollment decline since 2008, per-student Foundation Aid increased an average of 162%.
Writing in July 2024, the CBC highlighted that the formula-derived local contribution is often lower than actual local contributions; for the upcoming school year, the IWI method would set the expected minimum local share at $35.1 billion, whereas using only the FASSRs method results in a statewide expected minimum local share of $21 billion.
The CBC reported in July 2024 that the Foundation Aid formula relies on outdated indices, noting that the local poverty metric comes from the 2000 Census and fails to reflect demographic changes over the past 24 years, while the Regional Cost Index has been frozen since Foundation Aid was introduced.
In July 2024, the CBC explained that six expense-based aids allocate $2.7 billion in State aid, but arbitrary floors—such as a 36% minimum State contribution for BOCES aid—result in the State providing $20.6 million more than formulas would otherwise determine, with 81% of those funds flowing to the wealthiest 40% of school districts.
New York City's public school enrollment has declined significantly, yet the city continues to use 'hold harmless' funding policies that keep budgets disconnected from actual student numbers. Realigning school budgets based on actual enrollment and student needs, alongside consolidating underutilized schools and pausing new construction, could generate substantial savings while improving resource allocation.
Recommendations related to School Funding Formulas
The City should fund schools based on actual enrollment and student need, which would save $400 million.
The City should merge schools whose enrollment has shrunk so much they require disproportionate administrative overhead, beginning with a review of schools with under 300 students.
The City should get relief from the State class size reduction mandate, which would save $1.2 billion.
The City should pause construction of new schools until administrative actions have been taken to increase utilization of existing schools.
The City should reestablish weighted student funding as the primary allocation method for school budgets.
Key Data
$400 million
— Annual savings if the City resumes funding schools based on the number and needs of students.
$1.2 billion
— Annual savings if the State rescinded the class size reduction mandate.
118,137 students
— Total decline in enrollment across public, private, charter schools, and home instruction between school years 2014–15 and 2023–24.
163,046
— Decrease in public school enrollment between school years 2014-15 and 2023-24.
$18,294
— Average per-student cost in small schools with fewer than 400 students.
$870 per square foot
— Current cost of building new schools in New York City.
New York City's budget could be improved by adjusting school funding to better align with declining student enrollment, which would generate $400 million in annual savings. Additionally, obtaining relief from the state's class size reduction mandate offers an opportunity to reduce ineffective spending by approximately $1 billion annually.
Recommendations related to School Funding Formulas
The City should adjust school funding to reflect declining enrollment to right-size spending in areas where demand has changed.
The City should seek relief from the State class size reduction mandate to reduce ineffective spending and improve operational efficiency.
Key Data
$400 million
— Potential annual savings from adjusting school funding to reflect declining enrollment.
$1 billion
— Potential annual savings from obtaining relief from the State class size reduction mandate.
New York State spends the highest amount per student in the nation, yet student performance remains average, indicating that increased funding alone does not guarantee better outcomes. The state should prioritize improving oversight, technical assistance, and accountability systems, while reallocating funds from wealthy districts to those with greater needs.
Recommendations related to School Funding Formulas
The State should conduct more rigorous analyses to identify the reasons behind New York’s lackluster student performance.
The State should ramp up its efforts to 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 to ensure results without inhibiting districts’ ability to deliver for students.
The State should identify and implement ways to enhance its support and technical assistance to promote and spread best practices.
The State should better target resources based on need, reallocating funds from wealthy districts to low-wealth, poor-performing districts.
Key Data
$36,293
— The average amount New York school districts are set to spend per student in the 2024-25 school year.
21%
— The increase in per-student spending in New York since the 2020-21 school year.
$89 billion
— The total amount New York school districts are set to spend in the 2024-25 school year.
91%
— The percentage by which New York's per-student spending exceeds the national average.
$2.8 billion
— The 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.
New York spends more per student than any other state, yet student performance remains average, necessitating reforms to school aid funding formulas to better target high-need districts. The state currently sends over $2 billion annually to wealthy districts that already provide a sound basic education, highlighting the need to eliminate programs like STAR and revise outdated funding indices.
Recommendations related to School Funding Formulas
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 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 accurately capture how much districts actually support schools.
Key Data
$40 billion
— Annual State education spending that needs to be restrained to make it affordable and better targeted to high-need districts.
$2 billion
— Annual amount sent to districts that already provide a sound basic education with their own and federal resources, due to the current system's fundamental flaw.
New York State's current school aid formulas, including Foundation Aid and the STAR program, fail to effectively distribute resources based on student need and local capacity, often favoring wealthier districts. Reforming these formulas to better account for local economic circumstances and reallocating funds toward lower-wealth districts would ensure a more equitable distribution of state education aid.
Recommendations related to School Funding Formulas
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 STAR program to better allocate State resources to where they are needed most.
More accurately measure a district’s capacity and willingness to raise revenue, and use the actual local contribution as the expected minimum local contribution when it exceeds the measure.
Account for a locality’s other spending obligations—including State mandates such as Medicaid, and those driven by economic or social factors such as poverty and unhoused residents—by adjusting the expected local contribution.
Ensure that indices of need and regional cost are updated regularly, are sufficiently granular to capture variation, and consider that a well-constructed metric with a limited number of weights may be more effective than a metric with many weights.
Key Data
$3.3 billion
— The amount of annual School Tax Relief (STAR) program funding that could be reallocated proportional to the current Foundation Aid formula.
$1 billion
— The amount of STAR aid the 201 lowest-wealth districts would receive if funds were reallocated proportional to the Foundation Aid formula.
$336 million
— The amount of STAR aid the 203 wealthiest districts would receive if funds were reallocated proportional to the Foundation Aid formula.
$6 billion
— The total amount of Building and Transportation Aid for the coming school year.
$1,805
— The amount of statewide student transportation expenditures per student in 2022, the highest of any state.
$447 million
— The total amount of Library, Textbook, Software, and High Tax Aid set for the 2024-25 school year.
New York's current school aid formulas, including Foundation Aid and the STAR program, fail to accurately account for local fiscal capacity and student needs, resulting in inequitable funding distribution. Reallocating these funds proportionally to Foundation Aid would better target resources toward lower-wealth districts and those with greater student needs.
Recommendations related to School Funding Formulas
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, such as State mandates like Medicaid, by adjusting the expected local contribution.
Indices of need and regional cost should be updated regularly and be sufficiently granular to capture variation.
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.
If expense-based aids and STAR were distributed proportionally to Foundation Aid, they would be better targeted based on student needs and local wealth.
Key Data
152
— Number of districts that contributed enough local resources to provide a sound basic education before receiving any State aid.
$8 billion
— Amount of costs for the State-run Medicaid program shifted to counties and local taxpayers.
nearly $6 billion
— Total combined value 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 by the STAR program.
$135 million
— Additional funding that would be directed to lower-wealth districts if aids were distributed proportional to Foundation Aid.
New York's current school aid formulas, including Foundation Aid and the School Tax Relief (STAR) program, fail to effectively target resources based on student need and local fiscal capacity, often directing funds to wealthier districts. Reforming these formulas by eliminating provisions like "hold harmless" and adjusting for actual local wealth is essential to ensure fiscal sustainability and equitable education funding.
Recommendations related to School Funding Formulas
The State should eliminate or phase-out the hold harmless provision to align Foundation Aid with district enrollment.
The State should revise the expected local contribution calculation to better reflect districts' actual fiscal capacity and willingness to generate local resources.
The State should update district poverty estimates and regional cost measures for a more accurate assessment of need.
The State should reassess arbitrary floors and ceilings to ensure they are limited to extreme situations and do not undermine the intent of allocating school aid based on need and local capacity.
The State should adjust library, textbook, and software aids to account for district wealth either by modifying the formula or folding the funding into Foundation Aid.
The State should eliminate High Tax aid, which is fixed and not tied to an educational expense.
The State should eliminate the School Tax Relief (STAR) program due to its regressive nature and significant cost.
Key Data
$38.6 billion
— Total funding provided to school districts through Foundation Aid, expense-based aids, and the School Tax Relief (STAR) program for the upcoming school year.
$2.8 billion
— Amount of 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.
$16 billion
— Projected structural budget gap for the State by fiscal year 2028.
$3.3 billion
— Estimated cost of the School Tax Relief (STAR) program for the upcoming year.
$20.6 million
— Amount of excess funding provided by the State for expense-based aids compared to what the formulas would otherwise determine.
$10.4 billion
— Total amount of expense-based aids for the current year, including funding for building construction, student transportation, and vocational programs.
New York's current school aid formulas often misdirect funds to wealthy districts while failing to account for actual student needs and local fiscal capacity. Reforming these systems, including eliminating outdated provisions like "hold harmless" and regressive programs like the School Tax Relief (STAR), is essential to ensure state resources are distributed equitably and sustainably.
Recommendations related to School Funding Formulas
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 because of 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
— State aid sent every year to districts that already spend enough local resources to provide a sound basic education.
$38.6 billion
— Total amount of education aid the State must use wisely and appropriately.
$224 million
— Funding for library, textbook, and software aids that would be better allocated if folded into Foundation Aid.
$223 million
— Total funding for High Tax Aid, which should be eliminated.
$3 billion
— Annual cost of the School Tax Relief (STAR) program.
$2,000
— Amount per student provided by the STAR program in wealthy counties like Putnam, Nassau, and Westchester.
New York State's school aid growth has accelerated significantly, necessitating reforms to the Foundation Aid formula to better target resources toward districts with the greatest need. Proposed changes include phasing out the "hold harmless" provision and eliminating the School Tax Relief (STAR) program to ensure more sustainable and equitable funding distribution.
Recommendations related to School Funding Formulas
The Legislature should enact the phaseout of the hold harmless provision to ensure Foundation Aid is more reflective of current district demographics.
The State should shift some of its expense-based aid to Foundation Aid to better 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.
The Legislature should enact a fiscal year 2025 budget that brings State school aid growth to a more sustainable level.
Key Data
$413 million
— Savings generated in school year 2024-25 by the proposed changes to the Foundation Aid formula.
$38.1 billion
— Total State school aid allocated for the coming school year under the proposed budget.
$15,761
— Amount of State aid per student in the coming school year.
$2.4 billion
— Amount of State aid allocated to 145 districts that can already fully fund a sound basic education with local and federal resources.
$35,975
— Total school district revenue per student in school year 2024-25.
6.7 percent
— Annual growth rate of State school aid from fiscal year 2021 to fiscal year 2024.
New York State's school aid has grown significantly, increasing by 26.1 percent over the past three years, prompting proposals to adjust the Foundation Aid formula to moderate future spending growth. These adjustments include phasing out the "hold harmless" provision and modifying inflation factors to better target resources toward districts with rising needs.
Recommendations related to School Funding Formulas
The State should eliminate the hold harmless provision, as it prevents aid from flowing to where needs are high and growing, and a two-year phase-out would help better target resources.
The State should enact additional savings through inflation or other options, such as changing the allocation of expense-based aids to needs-based or eliminating the School Tax Relief (STAR) program.
The State should improve school performance with measurement and management, as current spending approaches double the national average without posting nation-leading academic performance.
Key Data
$6.4 billion
— Increase in State school aid from school year 2020-21 to school year 2023-24.
26.1 percent
— Percentage increase in State school aid from school year 2020-21 to school year 2023-24.
$413 million
— State savings in school year 2024-25 resulting from proposed school aid formula adjustments.
$1,885
— STAR cost per student in districts of above average wealth.
$1,355
— STAR cost per student in districts of below average wealth.
$11.4 billion
— Federal aid passed directly to districts to help lessen pandemic impacts.
New York State's school aid has reached record levels, yet the current funding formulas often direct significant resources to wealthy districts that can already afford to provide a sound basic education. To improve fiscal stability and educational outcomes, the state should reallocate these funds to high-need districts and implement a comprehensive performance management system to ensure spending drives results.
Recommendations related to School Funding Formulas
The State should reduce or reallocate aid to wealthy school districts to help stabilize the State’s ongoing finances and better target aid to high-need districts.
The State should implement 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, with poorly targeted school aid serving as a reasonable option for spending control.
The State should freeze or reduce aids to districts that already self-fund a Sound Basic Education, including by distributing expense-based aids based on need.
Key Data
$85 billion
— Total spending on elementary and secondary education for the 2023-24 school year.
$35,095
— Total spending per pupil for the 2023-24 school year.
8.8 percent
— The increase in New York State school aid for the 2023-24 school year.
$2.8 billion
— Amount of State aid directed to 152 school districts that already fully fund a Sound Basic Education with local and regular federal resources.
$11.4 billion
— Total funding provided to districts that exceeds what is needed to fund a Sound Basic Education.
$9.6 million
— The total revenue shortfall for the five districts statewide that lack adequate resources to provide a Sound Basic Education.
New York 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 allocated to districts that already fully support a Sound Basic Education, an additional $8.6 billion in state aid is distributed to districts exceeding that funding level.
Key Data
$37.4 billion
— The total amount of State school aid for the 2023-24 school year, representing an 8.8 percent increase from the previous year.
10.2 percent
— The rise in per-pupil State aid for the 2023-24 school year.
$2.8 billion
— The amount of State aid directed to 152 districts that fully support a Sound Basic Education with local and regular federal funding.
$8.6 billion
— The amount of additional State aid provided to districts in excess of the Sound Basic Education level.
New York City's Department of Education budget reached $36.9 billion in fiscal year 2023, even as K-12 enrollment declined by over 141,000 students since the 2015-16 school year. To address the projected $12.0 billion budget gap by fiscal year 2026, the city must align spending with enrollment trends and prioritize programs that deliver the greatest impact.
Recommendations related to School Funding Formulas
Consider per-student spending and recognize that declining enrollment could yield flat or reduced total spending.
Diligently manage the impact of enrollment declines in individual schools with appropriate changes in funding and staffing to ensure the smoothest possible continuity and equity of services.
Identify priority programs funded by expiring federal pandemic aid and be transparent about whether the DOE plans to replace the one-time federal funds with recurring City and State resources or to shrink or end the programs.
Evaluate and modify DOE programs and initiatives to prioritize those that deliver maximum impact to the target populations.
Key Data
$36.9 billion
— The total NYC Department of Education budget for fiscal year 2023.
141,000 students
— The decline in K-12 DOE enrollment between school years 2015-16 and 2021-22.
$37,136
— The amount spent per K-12 DOE student in fiscal year 2022.
$12.0 billion
— The likely budget gap for the City in fiscal year 2026.
$556 million
— The estimated fiscal cliff for programs currently funded by non-recurring federal pandemic aid in fiscal year 2026.
32.5 percent
— The growth in DOE spending between fiscal years 2016 and 2022.
New York State increased school aid by 6.7% to $34.4 billion for the 2022-23 school year, even as student enrollment declined. A significant portion of this funding, including $3.1 billion directed to wealthy districts and $10.4 billion in excess of the Sound Basic Education level, highlights concerns regarding the distribution of state resources.
Key Data
6.7%
— The increase in total 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
— State aid directed to 176 wealthy districts that can fully support a Sound Basic Education with local and federal funding.
$10.4 billion
— State aid provided to districts in excess of the Sound Basic Education level.
New York State continues to increase school aid, with total funding reaching $34.4 billion, yet the state lacks a robust system to monitor performance and hold districts accountable for student outcomes. Significant portions of this aid are directed to wealthy districts that already possess sufficient local resources to provide a sound basic education, while the state fails to adequately target funds to those with the greatest financial need.
Recommendations related to School Funding Formulas
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 New York State school aid for the school year.
9.4 percent
— Increase in per-pupil State aid as enrollment declines.
$3.1 billion
— Amount of State aid directed to 176 districts that already fund a Sound Basic Education with local and regular federal resources.
$10.5 billion
— Amount of State aid provided to districts in amounts exceeding what is needed to fund a Sound Basic Education.
$14.7 million
— The combined funding shortfall for the only four districts remaining below the level needed to provide a Sound Basic Education.
$13.6 billion
— Total State aid sent above the level needed to fund a Sound Basic Education across all districts.
New York City public schools should critically assess how resources are allocated across schools to maximize student achievement and reduce educational disparities. The administration should continue providing every school its Fair Student Funding amount, a student need-based weighted funding formula, while evaluating whether funds allocated to central administration are appropriate.
Recommendations related to School Funding Formulas
The City should critically assess how resources—including federal aid for school reopening—are allocated across schools to maximize student achievement and reduce educational disparities.
Providing every school its Fair Student Funding amount, a student need-based weighted funding formula, is an excellent first step.
The City should evaluate the allocation of resources within schools to determine if certain approaches improve school effectiveness, such as the allocation between the classroom and outside-of-class enrichment or remediation.
DOE should determine if the funds allocated to central administration and district offices are the appropriate amount and spent on the appropriate functions to maximize educational outcomes.
The City should focus on how better to assess teacher performance and improve the system of accountability.
Key Data
47.4 percent
— of third to eighth graders were meeting or exceeding standards in English Language Arts in fiscal year 2019.
45.6 percent
— of third to eighth graders were meeting or exceeding standards in math in fiscal year 2019.
less than 50 percent
— of third to eighth graders were meeting or exceeding standards in either math or English language arts in fiscal year 2019.
New York State schools are receiving record levels of funding, including a $2.9 billion state aid increase and $11.4 billion in federal pandemic aid, bringing per-pupil spending to $32,352. To ensure fiscal stability and improved student outcomes, the state must prioritize directing funds to high-need districts while implementing rigorous performance measurement and transparent reporting for all education spending.
Recommendations related to School Funding Formulas
The State should direct school aid to those districts most in need, and restrain increases to wealthy districts.
The State should ensure transparency, results, and accountability through stronger, permanent performance measurement and management.
To increase the likelihood that students benefit from this funding increase, the State should set goals, track performance, evaluate initiatives, and adjust programs and spending as necessary going forward.
The Legislature, Governor, and Comptroller should work together to make sure that all recurring and one-time aid is tracked and reported in detail.
To address the greatest educational needs and stabilize the State’s finances over the long term, the State should focus funding on districts with the greatest need, and reduce aid and aid increases to wealthy districts.
Key Data
$11.4 billion
— One-time federal pandemic aid that will be spent over four years.
$2.9 billion
— Increase in State school aid from school year 2020-21 to 2021-22.
$32,352
— Total per pupil spending for the school year.
$32 billion
— Projected school aid (including School Tax Relief program) in fiscal year 2022.
$40 billion
— Projected school aid (including School Tax Relief program) in fiscal year 2025.
$3.5 billion
— The size of the fiscal cliff the State will face once extraordinary federal aid is depleted.
New York State has significantly increased school aid, yet the distribution of these funds and the lack of rigorous oversight regarding educational outcomes remain critical concerns. To ensure these resources effectively address learning loss and reduce disparities, the state must implement stricter accountability measures and prioritize funding for lower-wealth districts rather than continuing to provide substantial increases to affluent ones.
Recommendations related to School Funding Formulas
The State should consider significantly restraining the new funds it provides to wealthy districts to ensure financial sustainability and resource adequacy in lower-wealth areas.
The State should take significant steps to ensure that the increases in recurring State and non-recurring federal funds drive substantial improvements in educational outcomes.
State leaders should work with districts to set measurable goals to address the disruptions and improve learning outcomes going forward through a process of performance measurement and management.
For the near term, 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.
Over time, initiatives should be evaluated to identify what works so programs and learning strategies can be either replicated or terminated.
Key Data
$32.5 billion
— Total State school aid for the 2021-22 school year.
$11.4 billion
— Extraordinary federal one-time education funding allocated to districts.
$77.9 billion
— Total federal, State, and local resources for the 2021-22 school year.
$25,139
— Spending per pupil in New York State in 2019.
$13,187
— National average spending per pupil in 2019.
$13.2 billion
— Amount by which total statewide funding exceeds the calculated Sound Basic Education (SBE) funding need.
New York State should smooth year-to-year school aid disbursements to avoid volatility and prioritize directing funds to districts with the greatest need. Rather than relying on fluctuating federal aid, the state should ensure consistent support by reallocating resources from districts with sufficient local funding to those requiring more assistance.
Recommendations related to School Funding Formulas
The Enacted Budget should smooth year-to-year school aid rather than the year-to-year disbursement swings proposed in the Executive Budget.
Spending should be targeted to districts with the greatest need, whether spending is kept constant or subsequently increased.
If school aid is held constant, reductions in aid to districts with sufficient local resources to fund a sound basic education could facilitate increases in aid to high-need districts.
The Legislature should reject the New York City-specific cap on the Services Aid proposal and adjust it to allocate these aids based on need.
Key Data
$2.6 billion
— Amount of the $4.3 billion federal aid bill used for budget relief in the Executive Budget.
$1.2 billion
— Amount allocated to increase school aid in school year 2021-22.
7.1 percent
— Projected increase in state aid to schools for the next school year.
8.4 percent
— Projected decrease in state aid to schools in the year following the next school year.
New York State should prioritize school aid for districts that lack sufficient local resources to provide a sound basic education, rather than implementing across-the-board cuts. By consolidating various aid streams into a revised Foundation Aid formula that accounts for student need and district wealth, the state can ensure equitable funding while managing budget constraints.
Recommendations related to School Funding Formulas
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 target districts that do not need State aid to fund an SBE for decreases in funding.
By incorporating funding from various aid types 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
$8 billion
— The amount by which the State will reduce fiscal year 2021 local assistance spending to balance its budget.
$26.8 billion
— The amount of school aid, representing 38 percent of state local assistance spending.
$1.6 billion
— The amount of State aid received by 129 school districts in school year 2017-2018 despite those districts raising enough local revenue to fund an SBE.
$237 million
— The total amount of library, textbook, and software aids provided to school districts.
$223 million
— The total amount of high tax aid provided to school districts.
New York state and city are currently underprepared for a recession, with limited reserves to cover projected revenue shortfalls of $34 billion for the state and $15-20 billion for the city. To improve fiscal resilience, the state should halt increases in school aid to wealthy districts that do not require it for a sound basic education and instead prioritize saving those funds for future economic emergencies.
Recommendations related to School Funding Formulas
The state should finally stop increasing school aid to wealthy districts that do not need it for a sound basic education and put away those funds to protect New Yorkers in the future when rainy days increase their needs.
The proposed state education budget fails to adequately target funds to underfunded districts, instead providing $750 million more than necessary to meet basic education standards while ignoring the need for fundamental formula reform. By incorporating less progressive aid streams into the Foundation Aid formula without adjusting for student need, the state risks further entrenching inequitable funding distributions.
Recommendations related to School Funding Formulas
The State should improve the proposal 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 move forward with controlling building and transportation aid costs while ensuring that schools have what they need to provide a sound basic education.
The State should fold those aids into the Foundation Aid formula and distribute them based on need.
Key Data
$750 million
— Amount provided by the Executive Budget in excess of what is needed to fund a sound basic education statewide.
$72 billion
— Total amount spent by New York school districts in school year 2018 using local, State, and federal funds.
$13.6 billion
— Estimated amount spent by school districts in 2018 above what is necessary to fund a sound basic education as defined by the Foundation Aid Formula.
$75 million
— Total funding needed to bring the 25 underfunded school districts to the required funding level in school year 2018.
$826 million
— Total increase in education aid proposed in the Fiscal Year 2021 Executive Budget.
$30 million
— Funding gap that 13 districts will continue to face for a sound basic education under the proposed budget.
7 days since the start of budget season, which commenced this year with the New York City Preliminary Budget released on January 16th. The State Budget, released just yesterday, may have a significant impact on the City’s finances this year: with the State facing a large budget gap, the Executive…
New York State's education aid has grown at twice the rate of inflation, yet significant funding continues to flow to wealthy districts that already possess sufficient resources to provide a sound basic education. To address fiscal imbalances, the state should prioritize directing education aid specifically toward needy districts to ensure they can fully fund a sound basic education.
Recommendations related to School Funding Formulas
New York State should focus education aid on needy districts to ensure they can fully fund a sound basic education.
Key Data
3.7 percent
— Average annual increase in education aid between fiscal years 2011 and 2020, which is twice the rate of inflation.
$1.6 billion
— Amount of state school aid received by wealthy districts with sufficient local resources to provide a sound basic education in school year 2017-2018.
$800 million
— Amount by which education spending increased last year beyond what was needed for each district to fund a sound basic education.
New York's Foundation Aid formula relies on outdated data and flawed calculations, resulting in wealthy districts receiving excess funding while some districts lack the resources to provide a sound basic education. Reforming these formulas to account for actual local wealth and eliminating "hold-harmless" provisions would allow the state to better target aid to districts with the greatest needs.
Recommendations related to School Funding Formulas
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 ensure aid is distributed based on 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
$18.4 billion
— Amount of Foundation Aid in school year 2019-2020, which accounts for two-thirds of state education aid.
$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.
$724 million
— State revenues received by the wealthiest decile of districts in school year 2017-2018.
$223 million
— Amount of additional State aid specifically targeted to wealthy districts through High Tax Aid.
New York State's Foundation Aid formula is flawed due to outdated data and political compromises, resulting in aid being distributed to wealthy districts that do not need it while some districts lack resources for a sound basic education. Despite statewide spending exceeding the amount necessary to provide a sound basic education by $13 billion, 29 districts still face resource shortages that could be resolved by better targeting state aid.
Recommendations related to School Funding Formulas
The state should significantly revamp the Foundation Aid formula and other education aid formulas to properly account for local wealth and actual local funding.
Policymakers must eliminate hold-harmless provisions and minimal growth rates to ensure aid is distributed based on actual need.
The state should use the most up to date data available when calculating aid to ensure resources are directed where they are needed most.
The state should target school aid to those districts that need it to provide a sound basic education, rather than providing automatic increases to overfunded districts.
The state should set aside more in reserves to increase the likelihood that state education funding can be sustained through the next economic recession.
Key Data
$13 billion
— The amount by which statewide school spending exceeds what is necessary to provide a sound basic education.
$1.9 billion
— The amount the wealthiest decile of districts are on track to spend above what is needed to fund a sound basic education in school year 2020.
$83 million
— The total amount of funding needed to bring the 29 districts that lack resources up to the level required for a sound basic education.
$18.4 billion
— The portion of the total $27.3 billion in school year 2019-2020 school aid allocated to Foundation Aid.
New York's current school aid distribution relies on an outdated Foundation Aid formula that fails to adequately account for local wealth and student need, leaving 29 districts underfunded despite significant overall spending increases. Reforming the system requires consolidating poorly targeted aid programs and eliminating arbitrary formula constraints to ensure resources are directed toward providing a sound basic education for all students.
Recommendations related to School Funding Formulas
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 to provide a sound basic education to all students in school year 2020.
$70 billion
— Aggregate amount districts are on track to spend.
29
— Number of school districts that will not have sufficient funding to provide a sound basic education.
$83 million
— Amount by which the 29 underfunded districts are collectively short.
$223 million
— Additional State aid targeted to wealthy districts via High Tax Aid.
$18.4 billion
— Foundation Aid component of the total $27.3 billion in school year 2019-2020 education aid.
New York State's current education funding exceeds the amount required to provide a sound basic education, yet the distribution of aid remains inefficient by failing to target districts with the greatest needs. Directing a modest increase of $164 million to the 32 underfunded districts would ensure statewide compliance with educational standards without requiring additional aid for wealthy districts that already possess sufficient resources.
Recommendations related to School Funding Formulas
The state should target the distribution of aid to districts that need it, rather than ensuring that almost every district receives more funding regardless of its specific circumstances.
Policymakers should direct a state aid increase of just $164 million to the 32 underfunded districts to provide resources for a sound basic education statewide without decreasing aid for wealthy districts.
Key Data
$62.6 billion
— The estimated spending required to provide a sound basic education statewide according to state education aid formulas.
$72 billion
— The projected school district revenues from federal, state, and local sources in 2020.
$164 million
— The amount of state aid needed to address the shortfall in the 32 districts that currently lack resources for a sound basic education.
$465 million
— The amount of state aid received by the 10% wealthiest districts in 2018-2019 despite already having the resources needed to provide a sound basic education.
$20 billion
— The increase in total district funds between school years 2006-2007 and 2016-2017.
New York can ensure all school districts have the resources to provide a sound basic education by targeting $164 million in aid to the 32 underfunded districts, rather than pursuing broad, multi-billion dollar increases. Current school spending already exceeds the $62.6 billion required to meet this constitutional mandate, yet the existing Foundation Aid formula inaccurately calculates local funding levels, leading to inefficient distribution of state resources.
Recommendations related to School Funding Formulas
The State should ensure all districts have the resources to provide a sound basic education by increasing aid by $164 million and targeting it to 32 of the state’s 674 districts that are underfunded.
State aid above the $164 million amount should be targeted to educational needs and balanced with the State’s fiscal realities.
The State should prioritize the allocation of $164 million to those districts that currently do not have sufficient combined State, local, and federal funds during budget negotiations.
Key Data
$164 million
— The amount of state aid increase needed to ensure all districts have the resources to provide a sound basic education.
$62.6 billion
— The total amount needed in 2020 to provide a sound basic education for New York’s students.
$72.0 billion
— The estimated amount school districts will spend in 2020.
$9.4 billion
— The amount by which estimated 2020 spending exceeds what is necessary to fund a sound basic education.
$956 million
— The amount the Governor’s Executive Budget proposes to increase school aid.
$20 billion
— The increase in school district revenues between school year 2006-2007 and school year 2016-2017.
New York State currently spends enough in aggregate to provide a sound basic education for all students, yet the existing Foundation Aid formula fails to accurately target resources to the districts that need them most. While total education funding has increased by $20 billion over the last decade, the state should prioritize directing future aid increases specifically to the fewer than 35 districts that currently lack the resources to meet basic educational standards.
Recommendations related to School Funding Formulas
The State should target any increase in aid to those districts that need it most.
The State should reform the Foundation Aid formula, which is currently undermined by inconsistent local share calculations, arbitrary adjustments, and outdated data.
The State should ensure that aid increases are directed only to districts where there are shortfalls to achieve a sound basic education.
Key Data
$9 billion
— The amount by which New York education spending exceeds what is necessary to fund a sound basic education as defined by the Foundation Aid Formula.
$6.6 billion
— The amount of 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
— The total amount of funding needed to bring underfunded districts to the level required for a sound basic education.
$20 billion
— The increase in revenues to school districts between school year 2006-2007 and 2016-2017.
$956 million
— The total increase in state aid proposed in the Governor’s Executive Budget.
The New York State Fiscal Year 2018-2019 Enacted Budget increased formula-based school aid to local school districts by $859 million, with the majority of this funding directed toward Foundation Aid. While all districts received an increase, the distribution varied significantly, ranging from a guaranteed minimum of 1.9% to much higher percentages in specific districts.
Key Data
$859 million
— Increase in formula-based school aid to local school districts in the FY 2018-2019 Enacted Budget.
$618 million
— Increase in Foundation Aid over school year 2017-2018.
3.6%
— Percentage increase in Foundation Aid over school year 2017-2018.
1.9%
— Guaranteed minimum increase received by 148 districts.
11.1%
— Increase in Uniondale in Nassau County.
9.9%
— Per-pupil decrease in Edinburg in Saratoga County.
The NYS FY2019 budget increases school aid by $1 billion without implementing necessary adjustments to prioritize funding for high-need school districts. This failure to reform the allocation formula perpetuates existing inequities in how state education resources are distributed.
Recommendations related to School Funding Formulas
The State should make substantial adjustments to better target school aid dollars to high-need school districts.
Key Data
$1 billion
— The amount by which school aid will grow in the NYS FY2019 Budget without substantial adjustments to better target dollars to high-need school districts.
New York's Foundation Aid formula, which accounts for two-thirds of state education aid, suffers from significant flaws like outdated demographic data and arbitrary funding floors that result in excess aid for wealthy districts while shortchanging poorer ones. Although the executive budget proposes a $26.4 billion school aid package for 2018-2019, it fails to address these structural inequities, instead layering new formulas on top of a fundamentally warped base allocation.
Recommendations related to School Funding Formulas
New York should streamline the local share calculation within the Foundation Aid formula to ensure equitable funding.
The state should repeal arbitrary floors and ceilings in the Foundation Aid formula to eliminate built-in inequities.
New York must update demographic data regularly to ensure the Foundation Aid formula accurately reflects current student needs.
The state should repeal any guaranteed amounts or increases in the Foundation Aid formula to prevent excess aid from going to wealthy districts.
New York leaders should direct state aid where it is needed most by students rather than maintaining current political distributions.
Key Data
$26.4 billion
— The executive budget school aid proposal for the 2018-2019 school year.
$769 million
— The total increase in the executive budget school aid proposal, representing a 3% rise.
$17.5 billion
— The total amount of Foundation Aid, which makes up approximately two-thirds of state education aid.
$338 million
— The increase in Foundation Aid for the 2018-2019 school year, representing a 2% rise.
0.25%
— The minimum increase included in the new formulas that mostly benefits wealthy districts.
New York's school aid growth is outpacing caps, with a significant portion of funding directed toward wealthy districts due to a flawed Foundation Aid formula that requires reform. Additionally, the state should repeal the poorly targeted School Tax Relief (STAR) program and its associated property tax rebate to save billions annually.
Recommendations related to School Funding Formulas
The Enacted Budget should reform the Foundation Aid formula to direct aid where it is needed most and reprogram expense-based aid into it.
The State should repeal the School Tax Relief (STAR) program entirely to stem the growth of this inadequately targeted program.
The State should eliminate the property tax rebate which is based on a property owner's STAR savings.
Key Data
$769 million
— School aid growth on a school year basis.
3.0 percent
— Growth rate of school aid.
$26.4 billion
— Total school aid.
$338 million
— Portion of school aid increase that is Foundation Aid.
44 percent
— Percentage of school aid increase that is Foundation Aid.
$3.4 billion
— Annual savings from repealing the School Tax Relief (STAR) program.
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 to $26.4 billion, exceeding the state's established school aid cap for the first time. While the proposal introduces new formulas for distributing Foundation Aid, it fails to account for enrollment changes and continues to send funds to wealthy districts, necessitating comprehensive reform to better target resources toward high-need areas.
Recommendations related to School Funding Formulas
The Governor should limit school aid growth and make reforms to the distribution of aid to better direct it to the neediest districts.
The State should reform the Foundation Aid formula to address the flaws that distort the total distribution of $17.5 billion in aid.
Instead of limiting growth in the largest components of expense-based aids, the State should distribute those funds through a revised Foundation Aid formula to encourage districts to allocate funds to the highest priority needs.
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 increase in total 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.
$17.5 billion
— The total amount of Foundation Aid distributed to school districts.
$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 limiting BOCES and Transportation Aids growth in school year 2018-2019.
New York State's current school aid system includes categories like Library, Textbook, and Software Aids and High Tax Aid that distribute funds regardless of district wealth or student needs, often benefiting wealthier districts more than poorer ones. To address this, the state should redistribute these funds through the Foundation Aid formula and eliminate aid categories that fail to account for actual district needs.
Recommendations related to School Funding Formulas
In the coming fiscal year, Library, Textbook, and Software Aids (LTSA) should be redistributed through the Foundation Aid formula to better target high-need districts.
High Tax Aid should be eliminated because it drives funding to the wealthiest districts in the state.
The state should reform or eliminate education aid categories that do not properly account for district wealth and student needs.
Key Data
$25 billion
— Total amount of state funding sent to local school districts during the 2017-2018 school year.
$17.2 billion
— Total amount of Foundation Aid distributed to school districts in the 2017-2018 school year.
$243 million
— Total cost of Library, Textbook, and Software Aids to state taxpayers in the 2017-2018 school year.
$223 million
— Total amount of High Tax Aid provided to certain school districts in the 2017-2018 school year.
$323
— Average per pupil High Tax Aid received by the wealthiest decile of school districts.
$100
— Average per pupil High Tax Aid received by the poorest decile of school districts.
We know that New York State leads the country in school spending per pupil. But how do those numbers break down when it comes to federal, state, and local spending? Most of the money comes from local governments through property taxes, which is how wealthier school districts are able to…
Today’s data point is $66 billion – the amount New York’s school districts received in revenue during the 2015-2016 school year. The state's 674 districts collect an average of $23,635 per student - however, 15 districts surpass this amount, collecting $40,000 per student, while 11 districts fall short, collecting only…
New York leads the nation in per-pupil education spending, yet significant disparities exist where wealthy districts generate vast local revenue with lower tax effort compared to poorer districts. The state should reform its funding approach to better account for district wealth and reallocate resources to support lower-wealth areas.
Recommendations related to School Funding Formulas
The State should properly account for district wealth when distributing education funding.
The State should reallocate state resources from high-wealth to low-wealth districts to address funding disparities.
Key Data
$21,206
— New York's per pupil education spending as of the 2014-2015 school year.
$11,392
— The national average for per pupil education spending as of the 2014-2015 school year.
$24,845
— Average school district revenue per pupil in the 2015-2016 school year.
$13,168
— Average local revenue per pupil in the 2015-2016 school year.
$10,990
— Average state aid per pupil in the 2015-2016 school year.
$30,486
— Local resources collected per pupil by school districts in the 10th wealth decile.
The 2017-2018 New York State budget increased school aid by $1.1 billion but failed to fix the inequitable Foundation Aid formula, which continues to favor wealthier districts over those with higher needs. Comprehensive reforms are necessary to ensure resources are directed toward districts that actually require them, rather than providing wasteful minimum increases across the board.
Recommendations related to School Funding Formulas
The state should reform the Foundation Aid formula to ensure that regardless of a district’s wealth, students receive the resources necessary to achieve a sound basic education.
Policymakers should implement more comprehensive modifications to the funding 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 to 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.
$130 million
— Total amount of 'Additional Increases' provided to 507 of 674 school districts.
$118 million
— Total amount state taxpayers could have saved had the proposed alternative funding recommendations been adopted.
$1.9 billion
— Additional funding that could have been directed to low-wealth, high-need districts under the proposed alternative funding plan.
$17 billion
— Total amount of Foundation Aid distributed in the 2017-2018 school year.
New York State is currently operating under an emergency budget that extends previous spending levels while introducing new funding for water infrastructure, creating uncertainty for local governments and school districts. To resolve this, the Governor and Legislature should finalize a budget that prioritizes fiscal discipline and implements necessary reforms to the State’s Foundation Aid formula.
Recommendations related to School Funding Formulas
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 for distributing school funding is flawed due to inconsistent local share calculations, arbitrary adjustments, and outdated poverty measures. Reforming this formula would allow for a more equitable distribution of resources, requiring only $569 million in additional state funding rather than the $3.8 billion requested by advocates.
Recommendations related to School Funding Formulas
The state should establish a more equitable basis for setting the expected local funding by using a single method that applies a uniform local tax factor and adjusts only for the local Medicaid financing burden.
Policymakers should eliminate arbitrary adjustments, including hold harmless provisions, phase-in percentages, and caps, which currently distort the distribution of aid.
The state should increase the additional resources allocated to needs of students in poverty by raising the weighting for poverty from 0.65 to 0.75 in the calculation of the Pupil Needs Index.
The state should enhance the accountability system to promote the wisest use of tax dollars by local school boards and administrators through evidence-based strategies and quantifiable results.
Key Data
$3.8 billion
— The amount of additional annual state funding requested by advocates for the Foundation Aid program.
$569 million
— The amount of additional annual state funding required to support a sound basic education under the proposed reformed formula.
$2.7 billion
— The amount of funding that would be redirected to needy districts under the proposed reformed formula.
$6,340
— The foundation amount per pupil for the 2016-2017 school year.
$16.5 billion
— The total amount of Foundation Aid in school year 2016-2017.
0.75
— The proposed weighting for poverty in the calculation of the Pupil Needs Index.
New York State's current education funding formula fails to ensure a sound basic education for all students because it distributes aid regardless of district spending levels or actual need. 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 School Funding Formulas
The state should fix the Foundation Aid formula to ensure resources are distributed based on actual need rather than historical allocations.
Policymakers should redirect $2.7 billion to needy districts to better align state aid with the constitutional requirement for a sound basic education.
The state must return Foundation Aid to its intended purpose of directing aid specifically to the neediest school districts.
Key Data
$4.3 billion
— Additional funding requested by advocates who have filed suit.
$2.1 billion
— Additional funding proposed by the Board of Regents.
$1 billion
— Additional funding budgeted by Governor Andrew M. Cuomo.
$430 million
— Portion of the governor's additional funding provided through Foundation Aid.
$24 billion
— Existing annual aid provided to local school districts.
$569 million
— Additional funding needed if the state fixes the Foundation Aid formula.
New York's current school aid distribution relies on a flawed Foundation Aid formula that directs resources to wealthy districts rather than those with the greatest need. Reforming this system is essential to ensure state funding is allocated based on actual student requirements and district wealth rather than perpetuating existing inequities.
Recommendations related to School Funding Formulas
The state must reform the Foundation Aid formula to alleviate current inequities rather than making them permanent.
Policymakers should change the problematic features of the formula to ensure all districts could be fully funded under Foundation Aid.
Key Data
$4.3 billion
— Amount that certain advocates claim local districts are owed in Foundation Aid.
$569 million
— Additional funding required to fully fund all districts under Foundation Aid if problematic formula features were changed.
$1.1 billion
— Total increase in school aid proposed in the New York State Executive Budget.
$16.5 billion
— Total amount of Foundation Aid, representing more than two-thirds of all school aid.
$768 million
— Increase in formula-based aids, excluding certain grants and district-specific aids.
3.9 percent
— Proposed increase in total school aid from $24.6 billion to $25.6 billion for the 2017-2018 school year.
The 2017-2018 school foundation aid district map illustrates proposed funding allocations across various districts. The provided material lacks sufficient content to detail specific fiscal impacts or policy recommendations.
The proposed budget includes adjustments to the Foundation Aid formula intended to prioritize high-need districts, yet it simultaneously freezes aid for the 2019 school year and continues to direct significant resources to affluent areas. Furthermore, the conversion of $277 million in School Tax Relief benefits into personal income tax credits raises concerns regarding the transparency of state spending.
Key Data
$277 million
— Amount of School Tax Relief (STAR) benefits being converted to personal income tax credits.
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.
New York State's proposed foundation aid formula would significantly alter funding for local school districts, with New York City slated to receive $7,772,835,891 in proposed aid compared to its current $7,127,295,629. This adjustment reflects a broader reallocation of resources, as evidenced by the proposed $641,786,599 in aid for Buffalo, an increase from its current $495,297,048.
Key Data
$7,772,835,891
— Proposed foundation aid for New York City school district.
$641,786,599
— Proposed foundation aid for Buffalo school district.
$338,377,958
— Proposed foundation aid for Brentwood school district.
$164,288,531
— Proposed foundation aid for Hempstead school district.
New York State's school aid distribution for the 2016-2017 school year is visualized through an interactive map covering 674 school districts. This tool enables the comparison of state aid allocations across various categories for each district.
Key Data
674
— school districts in New York State for which the interactive map shows proposed increases in school aid per pupil for the 2016-2017 school year
New York's fiscal year 2017 budget increased school aid by $1.4 billion, yet the distribution of these funds disproportionately benefits affluent districts rather than those with the greatest need. Policymakers failed to reform systemic issues like hold harmless provisions and expense-based reimbursements that misdirect aid away from the neediest school districts.
Recommendations related to School Funding Formulas
The state should address long-standing problems with the distribution of school aid, such as hold harmless provisions and reimbursements for spending that misdirect aid.
Key Data
$1.4 billion
— The actual growth in school aid for the fiscal year 2017 budget, exceeding the statutory growth cap.
10.4%
— The increase in school aid per pupil for the most affluent 10 percent of districts.
7.3%
— The increase in school aid per pupil for the neediest districts.
$434 million
— The amount allocated to the elimination of the Gap Elimination Adjustment.
$690
— The statewide average increase in school aid per student.
6.1%
— The increase in annual school aid from $22.9 billion to $24.3 billion.
New York's proposed school aid budget for 2016-17 relies heavily on expense-based reimbursements that favor wealthier districts rather than prioritizing the Foundation Aid formula designed to support high-need areas. Addressing systemic inefficiencies like "hold harmless" provisions and excessive transportation and construction reimbursements is necessary to ensure state education funding is distributed equitably.
Recommendations related to School Funding Formulas
The State should address fundamental issues with the aid formulas, such as hold harmless provisions and generous reimbursements for school transportation and construction expenses that misdirect aid.
Policymakers should redirect resources through Foundation Aid, which is the State’s best mechanism for targeting aid to the neediest districts.
The State should adhere to the statutory growth cap tied to personal income to ensure school aid growth remains aligned with affordability.
Key Data
27%
— of the Governor’s proposed school aid increase would be distributed through Foundation Aid, the primary mechanism for addressing resource disparities.
$400 million
— of the school aid increase would flow through expense-based reimbursement formulas, such as Building Aid and Transportation Aid, which favor wealthier districts.
$715 per student
— is the average increase in school aid for the neediest 10 percent of New York school districts.
$149 per student
— is the average increase in school aid for the wealthiest 10 percent of New York school districts.
20%
— of the $991 million school aid increase would be allocated through restorations to the Gap Elimination Adjustment.
$100 million
— in new Community Schools Aid would go to districts with failing or persistently failing schools.
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…
State funding for school districts has risen by nearly $4 billion over the past four years, yet existing allocation methods continue to favor wealthy districts. Reforms are necessary to correct these longstanding distortions and ensure that school aid is distributed through an equitable formula.
Recommendations related to School Funding Formulas
State leaders should address longstanding distortions in the school aid formulas to ensure that funding is distributed equitably rather than driving greater aid to wealthy districts.
Key Data
$4 billion
— Increase in state funding for school districts over the last four years
New York's fiscal year 2016 budget increased formula-based school aid by $1.3 billion, yet this funding was not targeted to the neediest districts and instead perpetuated spending disparities by favoring wealthier areas. The state must address fundamental flaws in its aid distribution, including hold harmless provisions and excessive reimbursements for transportation and construction, to ensure resources are allocated based on actual need.
Recommendations related to School Funding Formulas
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 should be addressed in the coming year.
Key Data
$1.3 billion
— The amount by which school aid grew, exceeding the $377 million growth cap.
6.0 percent
— The 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.
$736
— The average increase in school aid per student for the poorest 10 percent of districts.
New York's school aid system requires a fundamental overhaul to ensure funds are distributed based on student need and district ability to pay, rather than current flawed formulas. While the proposed budget increases school aid to $23.1 billion, it fails to address the underlying misallocation of resources caused by existing loopholes and exceptions.
Recommendations related to School Funding Formulas
School aid should be distributed according to student need and district ability to pay.
Loopholes, exceptions, and other provisions that misallocate funds should be corrected regardless of whether other education policy changes are made.
The Executive Budget improves the STAR program by providing a tax credit for new homeowners, so taxpayers bear the full burden of their school taxes directly, and school districts gradually lose the state subsidy.
Key Data
$3.4 billion
— Annual cost of the School Tax Relief (STAR) program.
$23.1 billion
— Proposed total school aid amount if the Executive Budget proposals are adopted.
$1.5 billion
— Amount by which the proposed school aid would exceed the pre-recession peak.
4.8 percent
— The proposed increase in school aid in the Executive Budget.
1.7 percent
— The previously agreed upon cap for school aid increases.
The fiscal year 2016 Executive Budget proposes a 4.8 percent increase in school aid, yet fails to address necessary structural changes to the state's education finance system. Policymakers must overhaul antiquated and byzantine school aid formulas to ensure that funding is distributed based on actual district needs and financial capacity.
Recommendations related to School Funding Formulas
It is time to overhaul antiquated and byzantine school aid formulas to ensure funding flows according to need and district ability to pay.
Key Data
4.8%
— Proposed increase in school aid in the FY2016 Executive Budget.
$1.1 Billion
— Dollar amount of the proposed school aid increase in the FY2016 Executive Budget.
The fiscal year 2016 Executive Budget proposes a $1.1 billion increase in school aid, yet fails to address the need to overhaul flawed school aid formulas that currently lack a rational distribution plan. Instead of increasing spending by 4.8 percent, aid should be targeted to the neediest districts based on student need and ability to pay, while ensuring allocation details are transparently available for public review.
Recommendations related to School Funding Formulas
School aid should be distributed according to student need and district ability to pay, rather than through the current system of loopholes and exceptions.
The increase in school aid should be targeted to the neediest districts, and the allocation details should be available to the public for review and analysis well in advance of budget adoption.
The State must overhaul flawed school aid formulas to ensure funds are not misallocated.
Key Data
$1.1 billion
— Proposed school aid increase in the fiscal year 2016 Executive Budget.
$400
— Average additional funding per student resulting from the proposed school aid increase.
$20,000
— New York State's average spending per student, which is the highest in the nation.
4.8 percent
— Proposed increase in school aid, which exceeds the 1.7 percent cap.
Education reforms in the fiscal year 2016 budget must include a plan to fix broken school aid formulas to be effective. Without addressing these underlying structural issues, proposed education reforms will remain hollow.
Recommendations related to School Funding Formulas
Education reforms must include a plan to fix broken school aid formulas, as reforms will be hollow otherwise.
The fiscal year 2015 New York State enacted budget increased school aid by $1.1 billion, surpassing the statutory cap linked to personal income growth and exceeding the Governor’s Executive Budget proposal by $552 million. A significant portion of these funds is distributed through mechanisms like Gap Elimination Adjustment restorations and expense-based grants that fail to adequately target the neediest schools based on enrollment or student need.
Key Data
$1.1 billion
— Increase in school aid for school year 2014-15.
5.4 percent
— Percentage increase in school aid for school year 2014-15.
$552 million
— Amount by which the enacted budget exceeded the Governor’s Executive Budget proposal.
3.1 percent
— Statutory cap linked to personal income growth.
$21.8 billion
— Total aid in school year 2014-15.
$1.6 billion
— Total increase in school aid including unallocated aid.
Reforms to preschool special education rate setting are necessary to address rising costs, which reached $1.4 billion annually by 2012 due to increased service intensity and enrollment. The budget proposals also advocate for limiting Medicare Part B premium reimbursements for high-income retirees and extending design-build procurement authority to improve infrastructure project efficiency.
Recommendations related to School Funding Formulas
The state should establish regional SEIT rates to minimize irrational variances for providers that have similar underlying costs.
New York City should be authorized to select and negotiate rates with its SEIT providers to help drive down costs.
Reimbursement for SEIT services should be limited to the number of hours actually provided and not permitted for sessions that are missed.
Key Data
$1.4 billion
— Total costs for preschool special education services from 2001-02 to 2011-12.
83,038
— Number of children receiving preschool special education services in 2011-12, an increase of 27 percent.
19,836
— Number of children receiving more than one type of service in 2011-12, a 91 percent increase in service intensity.
$244.1 million
— Statewide costs for special education itinerant teacher (SEIT) services in 2011-12.
New York State's proposed education aid increase for the 2014-15 school year is poorly targeted, directing significant resources to wealthier districts rather than those with the greatest student needs. The current distribution relies on outdated enrollment data and expense-based formulas that exacerbate inequities, necessitating a shift toward up-to-date, needs-based allocation methods.
Recommendations related to School Funding Formulas
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.
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
— The total proposed increase in education aid for the 2014-15 school year.
3.8 percent
— The percentage increase in education aid from the 2013-14 school year.
$204 million
— The portion of the proposed increase allocated for special initiatives not distributed by formula.
$603 million
— The portion of the proposed increase distributed according to school aid formulas.
$323 million
— The amount distributed as a partial restoration of the Gap Elimination Adjustment (GEA).
$280 million
— The additional funding allocated to categories covered by expense-based formulas.
Governor Cuomo’s 2014-15 Executive Budget proposes an $807 million increase in total education aid, with $323 million allocated through formulas tied to student need and district ability to pay. The proposal also includes $280 million in expense-based and categorical aid, while reducing the Gap Elimination Adjustment from -$1.6 billion to -$1.3 billion.
Key Data
$807 million
— Total proposed increase in education aid for the 2014-15 school year.
$323 million
— Increase in formula aid tied directly to student need and district ability to pay.
$280 million
— Portion of the aid increase distributed through expense-based formulas and categorical grants.
-$1.6 billion
— Previous level of the Gap Elimination Adjustment used to reduce school aid.
-$1.3 billion
— Proposed level of the Gap Elimination Adjustment under the Governor's budget.
$4.6 billion
— Total proposed aid for transportation and building, comprising 21 percent of total aid.
New York's preschool special education system faces significant challenges with fraud, abuse, and a lack of cost-effective service incentives, leading to expenditures growing 73% to $1.37 billion between 2001 and 2012. Legislation is needed to mandate provider audits, address conflicts of interest in service recommendations, and reform the current rate-setting mechanisms that rely on historical costs.
Recommendations related to School Funding Formulas
The state should require that every provider be audited at least once by the State Comptroller by March 31, 2018 to reduce fraud, abuse, and mismanagement.
School districts should require written consent from the Committee on Preschool Special Education whenever the same program provider conducts the evaluation and provides services to avoid conflicts of interest.
The State Education Department should be tasked to complete a study of alternative reimbursement methodologies and monitoring protocols to identify further reforms.
Key Data
$1.37 billion
— Total expenditures for preschool special education services in the 2011-12 school year.
73%
— Growth in expenditures for preschool special education services from the 2001-02 to 2011-12 school years.
91%
— Increase in the number of preschoolers receiving more than one authorized service from 2001-02 to 2011-12.
$12 to $38 per hour
— Range for an hour of SEIT in the Western New York region in 2012.
$23 to $58 per hour
— Range for an hour of SEIT in Long Island in 2012.
Expanding universal prekindergarten in New York to all three- and four-year-olds could cost between $2 billion and $4.2 billion annually, depending on the funding model and per-pupil spending standards. This expansion would place a significant fiscal burden on local school districts and taxpayers, who already face a local tax burden of $80.60 per $1,000 of personal income.
Recommendations related to School Funding Formulas
New York’s leaders should review the history of such efforts and take stock of key realities before raising public expectations.
The state should avoid underfunding services for those students who could benefit most for the sake of achieving universality.
The state should consider the significant new fiscal burden on already highly taxed New Yorkers before adding as much as $4 billion to the $51 billion cost of public education.
Policymakers must acknowledge that calling the current pre-k program 'universal' does not make it so.
If pre-k becomes an extension of public education, local districts would likely be required to fund part of the cost just as they are for grades K-12.
Key Data
$1.4 billion
— Estimated annual cost of providing Abbott-style quality pre-k programs for all four-year-olds.
$3.0 billion
— Estimated annual cost of providing Abbott-style quality pre-k programs for all three- and four-year-olds.
$2.0 billion
— Estimated incremental cost for four-year-olds using K-12 general education spending norms.
$4.2 billion
— Estimated incremental cost for three- and four-year-olds using K-12 general education spending norms.
$80.60
— Local tax burden per $1,000 of personal income in New York.
$3,707
— Average per pupil spending in New York for pre-k in 2012.
New York's preschool special education system suffers from a fragmented delivery model and lack of cost-containment incentives, leading to a 73 percent increase in expenditures over a decade. Legislative reforms are necessary to improve oversight, address conflicts of interest in service evaluations, and move toward more transparent, rational rate-setting mechanisms.
Recommendations related to School Funding Formulas
The State Education Department should complete a study of alternative reimbursement methodologies and monitoring protocols to identify further reforms to the current rate-setting system.
The state should require that every preschool special education provider be audited at least once by the State Comptroller by March 31, 2018, to reduce fraud and mismanagement.
The state should require school district Committee on Preschool Special Education (CPSE) consent in writing whenever the same program provider conducts the evaluation and provides services to avoid conflicts of interest.
The state should mandate that Executive Directors of preschool special education providers be fully engaged and qualified for their positions to improve management.
Key Data
$1.37 billion
— Total expenditures for preschool special education services in the 2011-12 school year.
77,096
— Number of children receiving preschool special education services in the 2011-12 school year.
91 percent
— Increase in service intensity, measured by the number of preschoolers receiving more than one authorized service, from 2001-02 to 2011-12.
700
— Number of agencies used by the State Education Department to provide services in 2012.
$12 to $38
— Hourly rate range for Special Education Itinerant Teacher (SEIT) services in the Western New York region in 2012.
$23 to $58
— Hourly rate range for Special Education Itinerant Teacher (SEIT) services in Long Island in 2012.
New York State's 2013-14 budget allocates $20.8 billion in formula-based school aid, representing a 5.3% increase that exceeds the established cap tied to personal income growth. This distribution of funds is poorly targeted, providing increases to wealthy districts rather than focusing resources on the highest need-lowest wealth communities.
Recommendations related to School Funding Formulas
If New York State is to continue to improve its fiscal footing, then school aid allocations will need to be more disciplined next year.
Highly targeted, substantial increases for the less affluent districts are a better way to meet pressing needs without supersizing the out-year budget gaps.
Key Data
$20.8 billion
— formula-based aid allocated for school year 2013-14
$1.1 billion
— total school aid increase for school year 2013-14
$7,760
— average formula aid per pupil for school year 2013-14
5.3%
— total percentage increase in school aid for school year 2013-14
$814
— increase in formula aid per student for the highest need-lowest wealth districts
3%
— original cap increment for school aid tied to annual personal income growth
New York State's 2014 school aid budget allocates $20.8 billion in formula-based funding, representing a 4.7% increase over the previous year. While some adjustments aim to support needy districts, the inclusion of High Tax Aid increases and hold harmless provisions directs significant funding toward wealthier school districts.
Key Data
$20.8 billion
— Total formula-based school aid allocated for school year 2014.
$937 million
— Increase in formula-based school aid over school year 2013.
4.7%
— Percentage increase in formula-based school aid over school year 2013.
$171 million
— Addition to Foundation Aid in the enacted budget.
$196 million
— Addition to the Gap Elimination Adjustment (GEA) restoration.
$223 million
— Final amount of High Tax Aid after a 9% increase.
New York's school aid distribution should be improved by reallocating funds from competitive grants to the basic foundation aid program and eliminating provisions that steer money to wealthy districts. Current formulas for expense-based aids, such as those for building projects and pupil transportation, also require reform to ensure equitable and efficient outcomes.
Recommendations related to School Funding Formulas
The new funds for competitive grant programs should be reallocated to the basic foundation aid program.
"Hold harmless" and other provisions that steer additional funding to wealthier districts where it is not needed to provide a quality education should be eliminated.
Reforms to expense-based aids that reimburse districts for expenditures such as building projects and pupil transportation are needed.
The competitive grant program should be fine-tuned and monitored before its funding is increased.
The "fiscal stabilization" fund should be targeted and used only as a one-time resource to avoid creating expectations of unsustainable operating spending.
Key Data
$21.1 billion
— Proposed school aid in the Governor’s budget for the next school year.
$328 million
— Portion of the school aid increase that would not flow through the foundation aid formula and other formulas tied to district need and wealth.
$378 million
— Total amount of school aid that would not flow through the foundation aid formula and other formulas tied to district need and wealth.
$203 million
— Amount allocated for a new, largely undefined "fiscal stabilization" fund.
$175 million
— Amount allocated for an expanded competitive grant program.
$50 million
— Total pool for competitive grants for school year 2012-13.
New York's reliance on competitive grants for education funding has proven ineffective, with few districts applying or receiving funds, and should be replaced by formula-based aid that accounts for student need and district wealth. Essential education programs should be funded systematically and categorically in the districts that require them most, rather than through a competitive application process.
Recommendations related to School Funding Formulas
The state should prioritize distributing school aid through aid formulas that measure student need and district ability to pay rather than competitive grants.
If specific education programs are deemed essential, they should be funded categorically and systematically in the districts and for the students that most need them.
Key Data
$21.1 billion
— The total proposed school aid package for the 2013-14 fiscal year.
$175 million
— The total proposed cost for competitive grant programs in the 2013-14 fiscal year.
$17 million
— The total amount awarded to date from the $50 million competitive grant pool.
$10.2 million
— The total amount of performance improvement grants awarded to qualifying districts.
Governor Cuomo's fiscal year 2013-14 Executive Budget proposes a $889 million increase in total school aid, bringing the total to $21.1 billion for New York's 676 school districts. This plan allocates $611 million through existing school aid formulas while introducing new funding for fiscal stabilization and competitive grant programs.
Key Data
$889 million
— Total increase in school aid for New York's 676 school districts in the fiscal year 2013-14 Executive Budget.
$611 million
— Increase in formula and categorical aid compliant with the state aid growth cap.
$203 million
— Funding allocated for a one-time fiscal stabilization fund.
$75 million
— Funding for new competitive grant programs.
New York's current education aid distribution relies on outdated formulas and 'hold harmless' provisions that create inequities among districts with similar needs. To address these fiscal pressures, the state should redesign its school aid distribution methods and provide relief from burdensome special education mandates that exceed federal requirements.
Recommendations related to School Funding Formulas
State leaders should redesign the school aid formulas instead of distributing more money through the same flawed methods.
The Governor and Legislature should act this year to reform state aid formulas, even if the New NY Education Reform Commission is silent on the issue.
Governor Cuomo should press for adoption of pending special education mandate relief proposals in the fiscal year 2013-14 budget to alleviate fiscal pressures on school districts.
Key Data
$20.1 billion
— Education aid in the state budget for the current year.
$1.5 billion
— The amount education aid will grow over the next two years based on an agreement tied to state personal income.
227
— Number of mandates New York imposes on school districts beyond those required by federal law.
5.5
— The student-to-staff ratio in New York's special education system.
10.1
— The U.S. average student-to-staff ratio in special education.
New York's pupil transportation spending averages $1,100 per pupil, which is 140 percent above the national average of $459. Poorly designed state aid formulas, including a 90 percent reimbursement rate for many districts and the ability to choose the most favorable of six formulas, contribute to these high costs and fail to incentivize efficiency.
Key Data
$1,100
— School districts in New York spent $1,100 per pupil on average on transportation in 2010.
$459
— The U.S. average for pupil transportation spending is $459 per pupil.
90 percent
— Nearly one-third of the districts in the State receive transportation aid at the maximum 90 percent reimbursement rate.
6.5 percent
— The minimum aid ratio for the wealthiest districts is 6.5 percent.
495
— Fully 495 districts get more than half of their transportation costs reimbursed.
New York's pupil transportation aid formulas are poorly designed, leading to high costs and inequitable distribution that favors wealthy districts over those with greater needs. Reforming these mechanisms by simplifying the formulas and reducing overall reimbursement rates could improve cost-effectiveness and allow funds to be redirected toward more targeted educational needs.
Recommendations related to School Funding Formulas
New York should simplify its current pupil transportation aid formulas to improve targeting.
The state should apply one formula to all districts, based upon or equal to the foundation aid ratio.
New York should lower the overall reimbursement rate and eliminate the minimum reimbursement for the wealthiest districts.
The state could bring down reimbursement rates by a targeted number of percentage points to create a greater incentive to reduce costs.
Transportation aid for the wealthiest districts, which averages about $200 per pupil, could be entirely eliminated.
Key Data
$2.97 billion
— The annual cost of pupil transportation in New York State.
5.7 percent
— The portion of total school spending consumed by pupil transportation.
$1,100
— The average per pupil spending on transportation in New York in 2010.
140 percent
— The amount by which New York's per pupil transportation spending exceeds the U.S. average.
$270 million
— The estimated state funds that could be made available for redirection if the statewide average transportation aid reimbursement rate were reduced from 54 percent to 45 percent.
90 percent
— The maximum total cost reimbursement rate for transportation aid that many districts receive.
New York's public education system spends $18,825 per student annually, yet student achievement remains mediocre due to inequitable distribution and high costs for employee benefits and special education mandates. To improve outcomes without increasing spending, the state should overhaul its aid formulas to better reflect local needs and ability to pay, while also modernizing health insurance contributions and reducing the 227 mandates that exceed federal requirements.
Recommendations related to School Funding Formulas
State leaders should overhaul state aid formulas so that aid is based on local ability to pay, student need, and regional cost differences.
The legislature and the Governor should work together to establish a statutory cap on school district employer contributions for health insurance at 85 percent for single coverage and 75 percent for family coverage.
The legislature could begin reducing costs by passing the pending bill that authorizes multiple mandate relief measures already approved by the State Education Department.
Key Data
$18,825
— Annual per pupil spending in New York, which is the second highest among the 50 states.
$5,589
— Amount of state aid per student received by the Marlboro school district.
$10,672
— Amount of state aid per student received by the Greenwood school district.
$500 million
— Potential annual savings if school districts changed health insurance premium-sharing arrangements to match those of the State of New York.
$11.4 billion
— Total statewide special education spending in the decade ending in 2010.
227
— Number of mandates New York State imposes on schools beyond those required by federal law.
New York spends significantly more on public education than the national average, yet student performance remains average, necessitating a shift toward more efficient spending rather than simply increasing funding. To achieve this, the state should overhaul aid formulas to better reflect local needs, reallocate health insurance premium costs, and eliminate burdensome special education mandates.
Recommendations related to School Funding Formulas
State school aid formulas should be overhauled to better account for local ability to pay, student need, and regional cost differences, ensuring districts that are similarly situated receive the same amount of aid.
School districts should reallocate responsibility for employee and retiree health insurance premium costs to match the sharing arrangements used by the State of New York for its own employees.
New York should eliminate ineffective special education mandates that exceed federal requirements to reduce costs and create a more flexible, outcome-driven system.
Key Data
$17,746
— The amount New York spends per pupil per year, which is 68 percent above the U.S. average of $10,590.
$4.7 billion
— The amount school districts in New York State, including New York City, spent on health insurance for employees and retirees in 2009.
$500 million
— The estimated annual savings if New York City and school districts across the state changed their health insurance premium sharing arrangements to match those of the State of New York.
$11.4 billion
— The total amount of special education spending in New York, which increased 88 percent over ten years.
5.5
— The student-to-staff ratio for special education in New York, compared to the U.S. average of 10.1.
$32,000
— The amount spent per pupil by the wealthiest decile of school districts in the state.
New York State's school aid distribution is heavily influenced by historical 'hold harmless' provisions that maintain funding levels despite significant changes in student enrollment and local wealth. This reliance on outdated formulas creates inefficiencies, such as districts with declining populations failing to consolidate or close schools because state aid does not accurately reflect their current needs.
Recommendations related to School Funding Formulas
New York State should consolidate school districts with low enrollment to achieve 7% to 20% savings through economies of scale.
The state should eliminate "hold harmless" provisions that prevent aid from dropping below prior-year levels despite changes in student enrollment or local wealth.
State aid formulas should be calibrated to reflect actual enrollment counts rather than maintaining legacy commitments that do not account for changing district circumstances.
Key Data
$20.4 billion
— Aid expected by school districts in New York State in school year 2012-13.
40%
— Average portion of total school budgets comprised by state aid.
7% to 20%
— Potential savings from consolidating small districts.
554
— Number of pupils by which enrollment has dropped in Albion since 2006.
22%
— Percentage enrollment drop in Albion since 2006.
New York's proposed school aid increase is poorly targeted, with current formulas for foundation and categorical aid failing to prioritize the neediest districts while favoring wealthier ones. To ensure resources effectively boost student achievement, the state should prioritize distributing aid through the foundation formula, cap categorical aid growth, and significantly reduce or eliminate competitive grant programs.
Recommendations related to School Funding Formulas
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.
All the formulas for distributing school aid should be reexamined in coming years.
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.
$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.
$290 million
— Increase in foundation aid proposed by the Governor.
$265 million
— Addition in categorical aids proposed by the Governor.
$250 million
— Funding for new competitive performance grants proposed by the Governor.
The 2011 state budget implemented school aid cuts that undermined need-based targeting, as wealthier districts received a greater percentage of aid restorations than the poorest ones. Lawmakers should reexamine the basic formulas used to distribute school aid to ensure future allocations are sustainable and equitable.
Recommendations related to School Funding Formulas
If the State can no longer keep the promises it made to radically increase school aid when it revised the foundation aid formula in 2007, then the basic formulas by which school aid is distributed should be reopened to improve their targeting.
Now that the budget is completed, lawmakers should undertake a serious examination of how best to achieve sustainable and equitable allocations going forward.
Key Data
$1.5 billion
— Proposed school year to school year cuts in school aid by the Governor.
$67
— Average restoration per pupil statewide in the enacted budget.
$608 million
— Federal aid included in the budget that lowered the starting point for school aid cuts.
2.3 percent
— Percentage of State aid restored to the top wealthiest decile of school districts.
0.8 percent
— Percentage of State aid restored to the poorest decile of school districts.
5.8 percent
— Total aid reduction for the wealthiest 10 percent of school districts.
New York's proposed school aid cuts disproportionately impact poorer districts due to flawed formulas that protect wealthier areas. Adjusting the distribution of these reductions to prioritize district wealth would spare 380 low-wealth districts from cuts while shifting the financial burden to those better equipped to absorb it.
Recommendations related to School Funding Formulas
The legislature should focus on improving the distribution of aid cuts to make them more targeted and improve their progressivity.
The two provisions that diminish and distort the overall targeting of the cuts should be removed from the formula by which the cuts are allocated.
The formula by which school aid reductions are made should be improved so that the burden is borne more squarely by those who can most easily absorb the cuts.
Key Data
$21.2 billion
— The total amount of school aid, which comprises one-quarter of the State operating budget.
$1.7 billion
— The amount Governor Andrew Cuomo proposed reducing school aid by in the coming year’s budget.
$750 million
— The amount of budget pain that could be spared for the neediest school districts if cuts were better calibrated by ability to pay.
$5.5 million
— The local tax base per pupil for the wealthiest 10 percent of districts, which is more than 10 times greater than the statewide median.
$16,065
— The statewide median for estimated average per pupil expenditures.
New York State faces a $7.5 billion budget gap, necessitating a $1.1 billion reduction in school aid for the 2010-11 fiscal year. To mitigate the impact on the neediest students, the state should prioritize targeting these cuts toward the wealthiest districts, which currently receive significantly higher per-pupil funding than the poorest districts.
Recommendations related to School Funding Formulas
Harm to the neediest districts could be further minimized by even greater targeting of school aid reductions.
The state should halve the $900 million in state aid provided to the wealthiest districts to restore funding for the six poorest deciles.
Limited available school funding should be targeted to the neediest schools and pupils rather than distributed broadly.
New York should re-evaluate its approach to providing a sound basic education in light of a challenging revenue outlook.
Key Data
$1.1 billion
— Proposed cut in school aid for fiscal year 2010-11.
$7.5 billion
— Estimated budget gap for the coming year.
$20.5 billion
— Proposed school aid for the coming year.
$52 billion
— Total spending on education in fiscal year 2007-08 in New York State.
$28,754
— Average per pupil expenditure in the wealthiest 10 percent of districts in 2006-07.
$16,463
— Average per pupil expenditure in the poorest 10 percent of districts in 2006-07.
New York State's education aid to local school districts has more than doubled over the past decade to $26 billion, yet the state continues to distribute funds to wealthy districts that do not require additional resources. To address the state's growing budget gap, spending must be reduced by reevaluating these aid allocations rather than relying on tax increases or borrowing.
Recommendations related to School Funding Formulas
The state should stop sending education aid to wealthy districts that already possess abundant resources to support well-funded schools.
Key Data
$26 billion
— Total annual outlay for education aid to local school districts.
65%
— Amount more that New York spends per pupil compared to the national average.
20%
— Planned additional increases in education aid over the next three years.
New York should reform its school aid formulas by eliminating high tax aid and hold harmless provisions to better target funding based on need and ability to pay. These changes would generate significant savings that could be used to protect the neediest districts from budget cuts.
Recommendations related to School Funding Formulas
The state should enact the Governor's proposed reductions in school aid, which target the greatest percentage cuts to the wealthiest districts based on need and ability to pay.
Policymakers should eliminate high tax aid and hold harmless provisions in the new aid formulas, as these measures work against the principle of allocating school aid based on need.
Savings generated from reforming school aid formulas should be used to protect the neediest districts from cuts.
Key Data
$205 million
— Savings from eliminating high tax aid in the upcoming fiscal year.
$670 million
— Savings from dropping hold harmless provisions from the past two fiscal years.
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…
The current school funding system in New York relies heavily on local property taxes, which creates significant disparities in per-pupil spending between wealthy and lower-income districts. To address these inequities, the state should adopt a uniform tax effort approach that distributes education aid based on a district's actual need and ability to pay rather than current, less equitable formulas.
Recommendations related to School Funding Formulas
The state should distribute state education aid using an equalization or uniform tax effort approach to promote equity in both the local tax burden and spending per pupil.
Any district that cannot meet the median per pupil spending level with this tax effort should be eligible for state aid to make up the difference.
Districts that can raise sufficient funds from their own local tax bases at the median tax effort should receive no state aid.
The state should consolidate school districts to reduce administrative and transportation costs, particularly for smaller districts.
The state should consolidate property tax assessment units to ensure a greater level of assessment equity among municipalities.
Key Data
$184,799
— Average value of property per pupil among the 10 percent of school districts that spend the least per pupil.
$1,422,470
— Average value of property per pupil among the 10 percent of school districts that spend the most per pupil.
$13,000
— Average spending per student in Erie County school districts.
$21,000
— Average spending per student in Westchester County school districts.
$46 billion
— Current total spending for public schools in New York.
$48 billion
— Projected total spending for public schools under a uniform tax effort policy.
New York's recent budget changes to the school-funding formula disproportionately allocated funds to wealthy districts rather than prioritizing need. Future adjustments should rely strictly on need-based criteria while implementing stricter accountability standards to ensure school officials are held responsible for student performance.
Recommendations related to School Funding Formulas
Next year, the new funding formula should operate only on the basis of need, not be distorted by last-minute political deal-making that disproportionately benefits narrow and wealthy constituencies.
The law must hold school officials responsible for student performance - and remove officials who fail consistently.
New York State's education finance system requires reform to address inequities and high costs, as the state currently spends significantly more per pupil than the national average while still facing funding challenges. To generate necessary revenue without harming economic competitiveness, the state should prioritize eliminating system inefficiencies, expanding gambling, and broadening the tax base while shifting more fiscal responsibility from local districts to the state.
Recommendations related to School Funding Formulas
The state should eliminate inefficiencies in the system, such as consolidating smaller school districts and reallocating state aid currently given to wealthy districts, to generate at least $1.2 billion annually.
New York should expand gambling activities to generate an additional $2 billion, as this option avoids increasing the overall tax burden.
The state should broaden the tax base through increased enforcement of sales tax on remote purchases, extending the sales tax to professional services, and revising the corporate income tax.
New York should increase the state's share of school funding to help iron out inequities in spending between wealthier and poorer districts.
The state should realign state and local fiscal responsibilities by assuming costs like Medicaid or pensions to free up local revenues for education.
Key Data
$1.2 billion
— Annual savings potential from eliminating inefficiencies in the education system.
$2.0 billion
— Potential revenue generated by expanding gambling activities.
$1.5 billion - $2.6 billion
— Potential revenue generated by broadening the tax base through sales and corporate income tax revisions.
$10,665
— Average per pupil spending in New York State after adjusting for regional cost differences.
$8,041
— U.S. average per pupil spending.
$750 million
— Potential savings from eliminating or reducing aid to wealthy school districts with a tax base large enough to generate the full cost of a sound basic education.
New York's school aid programs, particularly the School Tax Relief (STAR) program, are inequitable because they provide more funding to wealthy districts than to poorer ones, failing to effectively equalize tax burdens. Reforming these programs to better target resources toward poorer districts is essential to reduce the disproportionately high local school tax burden.
Recommendations related to School Funding Formulas
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Key Data
$3.4 billion
— Annual appropriations for the School Tax Relief (STAR) program in the current fiscal year, having grown from $582 million in 1999.
28 percent
— The amount more per pupil that the wealthiest districts receive in STAR aid compared to the poorest districts.
$19,149
— Local revenue raised per pupil by Great Neck, a wealthy community in Nassau County.
$2,272
— Revenue per pupil yielded by Utica, a poorer upstate city, despite imposing a tax burden well above the statewide average.
51 percent
— The portion of non-federal revenue New York State provides to its local school districts, which is less than the national average of 54 percent.
New York's current school finance system relies heavily on local property taxes, creating significant disparities between wealthy and poor districts that are exacerbated by existing aid formulas and the STAR program. To address court-mandated funding requirements, the state should consider reforms such as adopting more effective equalization formulas, restructuring existing taxes, or implementing a luxury tax on wealthy districts to better distribute resources.
Recommendations related to School Funding Formulas
The State should adopt school aid formulas that more effectively equalize variations in local wealth by applying a uniform local tax rate across districts and providing aid only to those that cannot meet per pupil adequacy targets.
New York should fully fund education at the state level as a long-term goal to eliminate disparities among districts in tax burdens and spending levels.
The State could impose a luxury tax on wealthy districts by adding a tax surcharge onto local effort above a spending threshold that would require the district to share the revenue with less fortunate districts.
The State should restructure existing taxes to increase revenue by broadening the base of the current sales tax to include items now exempt, such as capital improvements and professional services.
The State should raise as much of the needed revenue as possible from non-tax sources, such as authorizing new forms of gambling like casinos housing video lottery terminals.
Key Data
$4.7 billion and $5.6 billion
— The court ordered New York State to provide between $4.7 billion and $5.6 billion in operating aid for New York City public schools over the next four to five years.
$3.2 billion
— The STAR program has grown from $580 million in school year 1998-99 to $3.2 billion in school year 2004-05.
$158,319
— In 2002-03, the average actual valuation of property among the lowest spending 10 percent of districts was $158,319 per pupil.
$1,200,109
— In 2002-03, the average actual valuation of property among the highest spending 10 percent of districts was $1,200,109 per pupil.
$8.4 billion
— A statewide solution to the CFE-generated mandate is estimated to increase costs by about $8.4 billion.
11.28
— Local tax effort in the lowest 10 percent of districts is 11.28 per $1,000 of wealth.
New York State must address the court-mandated need for a sound basic education by shifting the financial burden from local school districts to the state, while simultaneously implementing structural reforms to improve efficiency and accountability. These reforms include establishing a statewide accountability system, optimizing classroom space through rezoning and year-round scheduling, and restructuring teacher compensation to prioritize performance over seniority.
Recommendations related to School Funding Formulas
The State, rather than local school districts, should be responsible for raising the additional funds needed for a sound basic education.
The State should establish a longer-run goal of significantly increasing the share of all public school funds raised from statewide revenues and decreasing the mandated share raised by local school districts.
A significant portion of the resources needed for a sound basic education should be raised through the elimination of inefficiencies in the education system.
Expanded gambling activities should be used to generate about $2 billion annually for improved education, but these activities should be restricted to "destination" type casinos.
Improved enforcement of the existing sales tax on remote (including internet) transactions should be used to generate significant new revenues in future years.
A new statewide system of accountability for schools should be established, including planning for how funds will be used, reporting on how funds are actually used, reporting on student performance, and sanctions for unsatisfactory managerial performance.
The classroom space requirements for a sound basic education should be met through a combination of two measures: redistricting of existing schools and operating existing schools on a year-round schedule.
Teachers should be given financial incentives for better performance, with pay schedules revamped to make a larger share of compensation conditioned on job performance and to de-emphasize longevity and graduate educational credits.
Financial incentives should be used to overcome shortages in selected teaching job titles, with differentials offered to teachers who qualify for specific titles that are suitably deemed in a shortage condition.
The managerial discretion of principals should be expanded by allowing them to select teachers for given posts from among multiple candidates rather than forcing the decision to be made on the basis of seniority.
Key Data
$2.5 billion
— Minimum annual amount estimated by the Zarb Commission as needed to meet acceptable standards statewide.
$8.6 billion
— High end of the range for combined annual operating and capital expenses needed for a sound basic education.
$1.2 billion
— Annual savings that can be generated by making more efficient use of teacher time, consolidating small school districts, and reallocating state aid.
$2 billion
— Annual revenue that could be raised by authorizing new sites for housing video lottery terminals and taxing spending at the terminals.
$950 million
— Estimated annual yield from broadening the sales tax base to include items currently exempt without a sound basis.
$175 million to $595 million
— Estimated annual yield from extending the sales tax to include consumer purchases of professional services like law and accounting.
Court-mandated school finance reforms across seven states demonstrate that legal victories do not guarantee timely or effective policy responses, as success depends heavily on political leadership and implementation. Additional school spending is most likely to improve student achievement when it is well-targeted, particularly through investments in early childhood education and smaller class sizes in early grades.
Recommendations related to School Funding Formulas
A court victory does not ensure timely or effective school finance reform policy responses.
When political leaders are supportive of court policy directions, school finance reform action can be prompt and effective.
Success in terms of generating additional spending for public schools does not automatically equal success in terms of improved school finance reform outcomes.
Additional spending is more likely to result in gains in student achievement when school finance reform money is well targeted.
The forms of spending most likely to have positive results are expansion of pre-kindergarten opportunities and small class sizes in the early elementary school grades.
Key Data
$12 Million
— The cost of the Tennessee STAR program over four years, which provided evidence that smaller class sizes improve student performance.
480 words
— The vocabulary size of poor children at age 3, compared to 1,100 words for the wealthiest children.
1,100 words
— The vocabulary size of the wealthiest children at age 3, compared to 480 words for poor children.
$1.2 Billion
— The amount by which Kentucky increased education funding in the 1990-91 school year alone.
$2.8 Billion
— The amount raised by New Jersey's Quality Education Act to address a budget gap and fund education reform.
$1.4 Billion
— The two-year increase in state funding for education enacted by Ohio in Spring 2001.
New York State can improve school funding efficiency by eliminating aid to wealthy districts that do not need it and by addressing administrative and contractual inefficiencies in school districts. These reforms, including consolidating small districts and capping administrative costs, could redirect significant funds toward providing a sound basic education where it is most needed.
Recommendations related to School Funding Formulas
The State should eliminate or redistribute aid that is poorly targeted to wealthy school districts that generate significant local revenue at relatively low tax rates.
The State should require a minimum tax effort to generate additional local tax funds in some districts and further reduce the need for State aid.
New York City should reduce combined preparation and administrative periods for junior high and high school teachers from 10 to five per week.
The City should reduce preparation periods for elementary school teachers from five to three per week.
The State should implement penalties or mandates to ensure that school district consolidation savings are achieved.
The State should set caps on administrative expenses at the 75th percentile to oblige higher-cost districts to bring their costs closer to the statewide average.
Key Data
$750 million
— Estimate of state aid currently misallocated to wealthy school districts that do not need the help.
$475 million
— Annual savings from correcting teacher time and administrative inefficiencies.
$350,000,000
— Potential savings from reallocating teacher time in New York City schools.
$100 million
— Annual savings achievable through the consolidation of small school districts.
$26.0 million
— Annual savings from applying both administrative cost caps to school districts.
13.9
— Number of pupils for each teacher in New York City public schools.
New York State can generate significant revenue to fund court-ordered education initiatives by broadening the sales tax base to include more retail and professional services and by reforming corporate income tax laws to close loopholes. These tax adjustments would help address the funding requirements for school finance reform while balancing the economic impact across different communities.
Recommendations related to School Funding Formulas
The State should embrace the national Streamlined Sales Tax Project to ensure that taxes on internet and remote sales can be collected in the future.
The State should broaden the base of the sales tax to include many retail services that are not currently subject to tax.
The State should apply the sales tax to professional services when they are sold to consumers rather than businesses.
The State should reform its corporate income tax laws to capture income on which corporations are currently able to avoid paying taxes.
The State should disallow royalty, dividend, and interest payments to related entities to limit the ability of corporations to take advantage of passive investment companies.
The State should change the definition of nexus from one that requires physical presence to one requiring economic presence.
The State should establish a 'throwback' rule to enable the state to capture revenues by disregarding 'nowhere' income in apportioning liability.
The State should reform the minimum tax by increasing it and supplementing it with an alternative minimum assessment based on gross receipts or gross profits.
Key Data
$40 million to $590 million
— Estimated annual increase in state sales tax collections from embracing the national Streamlined Sales Tax Project.
$950 million
— Additional annual revenue from broadening the sales tax base to include many currently exempt retail services.
$175 million to $595 million
— Estimated annual revenue from applying the sales tax to professional services sold to consumers.
$320 million to $435 million
— Estimated additional annual revenue from reforming corporate income tax laws to close loopholes.
$1.5 billion
— Potential annual revenue if currently exempt retail services were subject to taxation.
$2.6 billion
— Potential revenue from a 4% sales tax on professional services if applied to both business-to-business and business-to-consumer transactions.
New York State must provide a sound basic education to all public school students, which requires a shift toward statewide funding rather than relying on local property taxes. To ensure these funds are used effectively, the state should implement rigorous accountability measures, optimize existing classroom space through rezoning and year-round schedules, and reform teacher compensation to prioritize performance over seniority.
Recommendations related to School Funding Formulas
All additional resources necessary to ensure that New York's students receive a sound basic education should be provided through statewide revenues.
Restructure the pay schedule to make a larger share of compensation conditioned on job performance and to de-emphasize longevity and graduate educational credits.
Use financial incentives to overcome shortages by offering differentials in the range of 20 to 25 percent to teachers qualified for and serving in specific titles that are suitably deemed in a shortage condition.
Increase teacher time spent on classroom instruction by reducing preparation and administrative periods and eliminating sabbatical leaves and subsidized time for union activities.
Enhance principals' managerial discretion by modifying seniority rules to allow principals to select teachers for given posts from among multiple candidates with the most seniority.
Key Data
48 percent
— New York State's share of non-federal primary and secondary education funding.
171 percent
— The amount of the national average that New York State residents pay in local taxes.
136,430
— The number of seats available in under-utilized schools that could be used to alleviate crowding through rezoning.
4,250
— The equivalent number of teachers that could be added to the payroll by reallocating non-instructional time to classroom teaching.
20 to 25 percent
— The recommended range for financial incentive differentials for teachers in shortage areas.
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