New York State school aid consists of the billions of dollars in annual funding provided to local school districts to support K-12 public education. This page covers CBC’s work on school aid formulas, Foundation Aid, hold harmless provisions, the School Tax Relief (STAR) program, expense-based aid, and strategies for targeting resources based on student need and local wealth.
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 target programs to those in need and fund them by scaling back less impactful spending, including school aid to shrinking and wealthy districts.
Reform school aid allocations to target funds based on district need and local wealth.
Reduce the $2.6 billion in school aid to wealthy school districts that fund a sound basic education locally.
Further change school aid formulas to improve targeting of state resources.
Rigorously examine and reform the school accountability system, including needs assessments developed for poor-performing schools and interventions intended to improve performance.
Key Data
In May 2026, the CBC reported that the enacted fiscal year 2027 budget increased school aid to districts with shrinking enrollment, which wastes $700 million annually and undermines funding fairness.
As of January 2026, New York State directed $2.6 billion in education aid to districts that already self-funded a sound basic education for the 2025-2026 school year, while hold harmless funds for districts with declining enrollment totaled $469 million.
According to a January 2025 report, New York spent $29,873 per student during the 2021-2022 school year, representing 91% more than the national average of $15,633.
In July 2024, the CBC emphasized that education funding is a major driver of state expenditures, comprising nearly 30% of State Operating Funds spending.
Increasing state aid to school districts with shrinking enrollment wastes $700 million annually and undermines funding fairness. Furthermore, raising Tier 6 pension benefits at a cost of $547 million creates financial pressure that forces school districts to either cut services or increase taxes.
Recommendations related to State School Aid
The State should stop increasing school aid to districts with shrinking enrollment, as this wastes $700 million annually and undermines funding fairness.
The State should avoid increasing Tier 6 pension benefits, as the $547 million cost will pressure school districts to cut services or raise taxes.
Key Data
$700 million
— Annual waste resulting from increasing school aid to districts with shrinking enrollment.
$547 million
— Cost of increasing Tier 6 pension benefits, which will pressure school districts to cut services or raise taxes.
Increasing state school aid to districts with declining enrollment is fiscally imprudent given competing budgetary needs. Furthermore, the state should alleviate the financial burden on New York City by removing the mandate for class-size reduction.
Recommendations related to State School Aid
The State should stop continuing to increase school aid to shrinking districts as it is unwise and unfair given New York’s other needs.
The State should relieve the City from the Class-Size Reduction Mandate to help stabilize the budget.
New York State directed $2.6 billion in education aid to districts that already possess the resources to self-fund a sound basic education. Additionally, $469 million was allocated to districts with declining enrollment through "hold harmless" provisions that maintain or increase Foundation Aid.
Recommendations related to State School Aid
The State should target programs to those in need and fund them by scaling back less impactful spending, including school aid to shrinking and wealthy districts.
Key Data
$2.6 billion
— Education aid directed to districts that self-fund a sound basic education with local and federal resources in school year 2026.
$469 million
— Hold harmless funds that maintain or grow Foundation Aid to districts with declining enrollment.
New York's education system faces challenges with declining enrollment and high per-student spending that is double the national average, yet student performance remains only average. To address these issues, the state should reform school aid formulas to better target funds based on district need and local wealth while improving school accountability systems.
Recommendations related to State School Aid
Reform school aid allocations to target funds based on district need and local wealth.
Reduce the $2.6 billion in school aid to wealthy school districts that fund a sound basic education locally.
Further change school aid formulas to improve targeting of state resources.
Rigorously examine and reform the school accountability system, including needs assessments developed for poor-performing schools and interventions intended to improve performance.
Key Data
$2.6 billion
— The amount of school aid currently provided to wealthy school districts that fund a sound basic education locally.
12 percent
— The decline in public school enrollment since 2021.
2.5 million
— The number of K-12 students supported by the New York State budget.
New York's recent state budget includes $2 billion in school aid for wealthy districts that already self-fund a sound basic education, a resource that could have been better utilized to bolster the state's fiscal reserves. This allocation is part of a broader spending plan that critics argue ignores looming federal budget cuts and potential economic downturns.
Recommendations related to State School Aid
Lawmakers should have used other resources, such as the $2 billion of school aid for very wealthy districts that self-fund a sound basic education, to replenish the State's Unemployment Insurance Trust Fund instead of siphoning reserves.
Key Data
$2 billion
— Amount of school aid allocated to very wealthy districts that already self-fund a sound basic education.
New York State's fiscal year 2026 budget proposals fail to address the structural budget gap and rely on unsustainable spending increases. To improve long-term fiscal health, the state should eliminate automatic minimum school aid increases and phase out "hold harmless" provisions that protect funding for wealthy districts.
Recommendations related to State School Aid
The State should not provide minimum school aid increases and phase out hold harmless provisions.
Policymakers should reject minimum increases in school aid and phase out hold harmless policies.
The state budget fails to restrain the growth of school aid, missing an opportunity to reallocate funds from affluent districts to areas with greater needs. By eliminating 'hold harmless' provisions and redirecting $2 billion in aid currently sent to wealthy districts, the state could better align spending with the actual requirements for a sound basic education.
Recommendations related to State School Aid
The State should restrain State school aid spending growth by eliminating hold harmless provisions.
The State should redirect some of the $2 billion in aid currently sent to wealthy districts that do not need it to fund a sound basic education.
Key Data
$2 billion
— Amount of state aid sent to wealthy districts that do not need it to fund a sound basic education.
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 aid from wealthy districts to those with greater needs.
Recommendations related to State School Aid
The State should ramp up its efforts to examine the relationships between human and fiscal resources, curriculum, student needs, accountability systems, and achievement to improve student outcomes.
The State should conduct more rigorous analyses to identify the reasons behind New York’s lackluster student performance.
The State should rigorously examine and, as beneficial, reform its accountability system, including the needs assessments developed for poor-performing schools and the interventions intended to improve performance.
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 by reallocating funds from wealthy districts to low-wealth, poor-performing districts.
Key Data
$89 billion
— Total amount New York school districts are set to spend in the 2024-25 school year.
$39 billion
— Portion of the $89 billion total school district spending coming from the State budget.
$36,293
— Average per-student spending in New York for the 2024-25 school year.
21%
— Increase in per-student spending since the 2020-21 school year.
91%
— Amount by which New York's per-student spending exceeds the national average.
$2.8 billion
— Amount of state aid provided in school year 2023-24 to districts that already fully fund a sound basic education with local and federal revenue.
New York currently directs over $2 billion in state aid to wealthy school districts that do not require the funding to provide a sound basic education. Lawmakers should reform these funding formulas to better target resources toward districts with the greatest need and ensure spending is fiscally sustainable.
Recommendations related to State School Aid
The Executive Budget should include proposals to ensure the State’s nation-leading spending on school aid is better targeted, fiscally sustainable, and accompanied by oversight changes to drive improvement in student learning.
Lawmakers have the responsibility to enact changes to better target aid and reduce spending growth, rather than cherry-pick the proposals that drive-up spending.
Key Data
$2 billion
— Annual amount of state aid sent to wealthy districts that already provide a sound basic education without such funding.
New York's current school aid funding formulas are flawed, resulting in billions of dollars being sent to wealthy districts that do not need it while the state spends more per student than any other. To ensure sustainable funding and better educational outcomes, the state should restrain overall education spending, eliminate programs like STAR, and better target aid to high-need districts.
Recommendations related to State School Aid
New York needs to restrain State education spending to make it affordable and better targeted to high-need districts.
The State should phase out hold harmless 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 take a more active role in promoting performance, increasing transparency, and improving accountability.
Key Data
$40 billion
— The amount of annual State education spending that needs to be restrained to make it affordable.
$2 billion
— The amount of money New York sends annually to districts that already provide a sound basic education with their own and federal resources.
New York State's grants to local governments for elementary and secondary education increased from $35,612 million in fiscal year 2020 to $46,402 million in fiscal year 2024. This financial data tracks the state's annual funding allocations for local school districts over the five-year period.
Key Data
$35,612 Million
— State of New York grants to local governments for elementary and secondary education in FY 2020.
$33,790 Million
— State of New York grants to local governments for elementary and secondary education in FY 2021.
$39,114 Million
— State of New York grants to local governments for elementary and secondary education in FY 2022.
$43,277 Million
— State of New York grants to local governments for elementary and secondary education in FY 2023.
$46,402 Million
— State of New York grants to local governments for elementary and secondary education in FY 2024.
New York State's school aid formulas are flawed, failing to distribute funds based on student need and local capacity, while disproportionately benefiting wealthier districts through programs like STAR. Reforming these formulas to better account for local circumstances and reallocating aid based on need would ensure a more equitable distribution of resources to support a sound basic education.
Recommendations related to State School Aid
Quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.
Revise the expected local contribution to be the higher of the district’s actual contribution or the district’s fiscal capacity.
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.
Eliminate the STAR program to better allocate State resources to where they are needed most.
Incentivize efficiency of spending on student transportation and building projects.
Key Data
$6 billion
— Total amount for Building and Transportation Aid in the coming school year.
$1,805
— Statewide student transportation expenditures per student in 2022, the highest of any state.
$447 million
— Total funding for Library, Textbook, Software, and High Tax Aid in the 2024-25 school year.
$3.3 billion
— Annual funding for the School Tax Relief (STAR) program.
$501 million
— Estimated STAR aid received by districts in the bottom three wealth deciles in the 2024-25 school year.
$942 million
— Estimated STAR aid received by districts in the top three wealth deciles in the 2024-25 school year.
New York's current school aid formulas, including Foundation Aid and expense-based programs, fail to accurately account for local fiscal capacity and student needs, often directing funds to wealthier districts. Reallocating these funds proportionally to Foundation Aid would better target resources based on student needs and local wealth, ensuring a more equitable distribution of state education funding.
Recommendations related to State School Aid
Formulas should more accurately estimate a district’s capacity and willingness to raise revenue and should use the actual local contribution as the expected minimum local contribution when it exceeds the estimate.
Calculations of local fiscal capacity should account for localities’ other spending obligations—including State mandates such as Medicaid—by adjusting the expected local contribution to reflect these costs.
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 to better reflect local needs and resources.
Key Data
152
— Number of districts that contributed enough local resources to provide a sound basic education before receiving any State aid.
$8 billion
— Medicaid local share costs shifted to counties and local taxpayers.
$6 billion
— Total amount of Building and Transportation Aid, the two largest expense-based aid categories.
$447 million
— Amount allocated in Library, Textbook, Software, and High Tax Aids in the 2024-25 school year without accounting for local wealth.
$135 million
— Additional funding that would be directed to lower-wealth districts if aids were distributed proportionally to Foundation Aid.
$3.3 billion
— Amount of education funding shifted from locally-raised property tax revenue to the State each year by the STAR program.
New York State's education funding system requires reform to address a $16 billion structural budget gap and ensure resources are directed toward districts with the greatest need rather than wealthy areas. By eliminating outdated provisions like "hold harmless" and the School Tax Relief (STAR) program, the state can better align its $38.6 billion in education aid with actual student needs and fiscal capacity.
Recommendations related to State School Aid
Quickly phase out the hold harmless provision to align Foundation Aid with district enrollment and wealth.
Revise the expected local contribution to be the higher of the district’s actual contribution, or the district’s fiscal capacity.
Update district poverty estimates and regional cost measures for a more accurate assessment of need.
Reassess arbitrary floors and ceilings in formulas to ensure they are limited to extreme situations.
Allocate library, textbook, and software aids based on wealth by modifying the formula or folding the funding into Foundation Aid.
Eliminate High Tax Aid, which provides more aid per student to wealthy districts than below-average-wealth districts.
Eliminate the School Tax Relief (STAR) program to better allocate State resources to where needed most.
Key Data
$16 billion
— Structural budget gap facing New York State.
$38.6 billion
— Total annual education aid provided by the State.
$2 billion
— Amount of State aid sent annually to districts that already spend enough local resources to provide a sound basic education.
$3 billion
— Annual cost of the School Tax Relief (STAR) program.
$223 million
— Total funding for High Tax Aid.
$224 million
— Funding for library, textbook, and software aids.
New York's school aid system, including Foundation Aid and the STAR program, requires reform to better align funding with actual student needs and district capacity rather than outdated formulas. By eliminating provisions like 'hold harmless' and reallocating funds from wealthier districts, the state can ensure a more equitable and fiscally sustainable distribution of resources.
Recommendations related to State School Aid
The State should quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.
The State should revise the expected local contribution to be the higher of the district’s actual contribution or the district’s fiscal capacity.
The State should update district poverty estimates and regional cost measures for a more accurate assessment of need.
The State should remove arbitrary floors and ceilings that distort the funding distribution of Foundation Aid and expense-based aid categories.
The State should adjust aid for library, textbooks, and software to account for district wealth either by modifying the formula or folding the funding into Foundation Aid.
The State should eliminate High Tax aid, which is fixed and not tied to an educational expense.
The State should eliminate the School Tax Relief (STAR) program to better allocate State resources to where needed most.
Key Data
$38.6 billion
— Total funding for school districts through Foundation Aid, expense-based aids, and the School Tax Relief (STAR) program for the upcoming school year.
$16 billion
— The amount by which the State's structural budget gap will exceed by fiscal year 2028.
$2.8 billion
— State aid provided in the 2023-24 school year to districts that fully fund a sound basic education before receiving a single dollar from the State.
$10.4 billion
— Total funding for expense-based aids this year, including building construction, student transportation, and vocational programs.
$20.6 million
— The amount the State provides in excess for expense-based aids due to arbitrary floors, with 81 percent of these funds flowing to the wealthiest 40 percent of school districts.
$3.3 billion
— Estimated total cost of the School Tax Relief (STAR) program for the next year.
New York City Department of Education expenditures are projected to reach $39.5 billion in fiscal year 2025, even as federal COVID-19 aid decreases. Between fiscal years 2020 and 2024, State aid to the department increased by 15.6 percent, rising from $12.3 billion to $14.2 billion.
Key Data
$14.2 billion
— The amount of State aid provided to the New York City Department of Education in fiscal year 2024.
$12.3 billion
— The amount of State aid provided to the New York City Department of Education in fiscal year 2020.
15.6 percent
— The increase in State aid to the New York City Department of Education between fiscal years 2020 and 2024.
$14.4 billion
— The projected amount of State aid for the New York City Department of Education in the fiscal year 2025 executive budget.
New York's school aid continues to grow at an unsustainable rate, with the state legislature failing to implement necessary reforms to align funding with enrollment. By rejecting the removal of the "hold harmless" provision, the budget misses an opportunity to stabilize education spending and address long-term fiscal challenges.
Recommendations related to State School Aid
The State should remove the hold harmless provision to align school aid with enrollment.
State leaders should stop delaying stabilizing changes to school aid to address the current unsustainable growth rate.
The conceptual New York State budget agreement includes $237 billion in spending and leaves a structural budget gap likely exceeding $16 billion. By rejecting the removal of the hold harmless provision on education aid, the Legislature missed an opportunity to align school funding with actual needs.
Recommendations related to State School Aid
The State should pursue the common-sense removal of the hold harmless on education aid to better align spending with actual needs.
New York State's school aid has grown rapidly, and the state should implement reforms like phasing out the "hold harmless" provision to better target funding based on need rather than maintaining past levels. Additionally, the state should consider eliminating the School Tax Relief (STAR) program and adjusting expense-based aid to ensure resources are directed toward districts that require them most.
Recommendations related to State School Aid
The Legislature should enact the phaseout of the hold harmless provision to allow Foundation Aid to be more reflective of changing district demographics.
The State should consider changes to expense-based aid categories, some of which do not currently incorporate district need in their allocation.
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 from proposed changes to Foundation Aid in school year 2024-25.
$38.1 billion
— Total State school aid in the coming school year under the Governor’s proposal.
$15,761
— Per-student State aid in the coming school year.
$2.4 billion
— Amount of aid the State would still allocate to 145 districts that already self-fund a sound basic education.
6.8 percent
— Average reduction in Foundation Aid for districts in the highest wealth decile under the proposed changes.
1.9 percent
— Increase in total State school aid in the coming school year.
New York State faces significant fiscal challenges with projected structural gaps reaching $16 billion, necessitating a limit on annual spending growth to 2 percent. To achieve fiscal stability, the state should prioritize reducing major expenses, specifically by eliminating the school aid hold harmless provision and addressing poorly targeted school aid programs.
Recommendations related to State School Aid
Eliminating the school aid hold harmless provision, as the Governor proposed, is a particularly common-sense measure.
The State should identify spending reductions to offset added spending, such as poorly targeted school aid.
Extra scrutiny should be given to the State’s two biggest expenses—school aid and Medicaid.
Key Data
$16 billion
— Projected structural budget gap facing the State.
2 percent
— Recommended annual limit on spending growth to close budget gaps and reach structural balance by fiscal year 2028.
$8 billion
— Amount added to State Operating Funds spending on top of the Governor’s proposal.
8.9 percent
— Year-over-year growth of State Operating Funds spending under the Legislature's proposal.
7.9 percent
— Successive years of growth in State Operating Funds spending.
$10 billion
— Projected out-year budget gaps facing the State.
New York State school aid has grown significantly, increasing by $6.4 billion over the past three years, and is projected to grow by another $4.0 billion through fiscal year 2028. To address sustainability and ensure resources are targeted to need, the state should eliminate hold harmless provisions, reform inflationary factors, and improve performance measurement.
Recommendations related to State School Aid
The State should eliminate the hold harmless provision to allow aid to flow to where needs are high and growing.
The State should enact additional savings through inflation or other options, such as changing the allocation of expense-based aids or eliminating the School Tax Relief (STAR) program.
The State should improve school performance with measurement and management to ensure that high spending levels translate into better academic achievement.
Key Data
$6.4 billion
— The amount State school aid increased from school year 2020-21 to school year 2023-24.
26.1 percent
— The percentage growth of State school aid from school year 2020-21 to school year 2023-24.
$4.0 billion
— The projected further growth of State school aid from school year 2023-24 to school year 2027-28.
10.7 percent
— The projected percentage growth of State school aid from school year 2023-24 to school year 2027-28.
$1,885
— The average cost of the School Tax Relief (STAR) program per student in districts of above average wealth.
$1,355
— The average cost of the School Tax Relief (STAR) program per student in districts of below average wealth.
New York State's school aid spending should be reformed to prioritize high-need districts rather than continuing to provide funding to wealthy districts that can afford to self-fund their own education systems. Additionally, the state should discontinue the practice of 'hold harmless' funding for districts experiencing enrollment declines to ensure resources are allocated based on actual needs.
Recommendations related to State School Aid
State school aid needs to focus on better targeting aid to high-need districts, not increasing aid to wealthy districts that already self-fund a sound basic education, and not holding districts harmless when enrollment declines.
New York's executive budget includes overdue measures to better target school aid by limiting spending growth in districts without high needs and adjusting allocations based on enrollment. These actions are presented as necessary steps to address the state's structural budget imbalance alongside broader fiscal restraint.
Recommendations related to State School Aid
The State should limit school aid spending growth to districts without new or high needs to better target resources.
The State should make adjustments to school aid based on enrollment to ensure funding is better targeted.
New York currently directs $2.8 billion in state education aid to the wealthiest school districts that are already capable of funding a sound basic education locally. To improve fiscal responsibility, future state aid should be better targeted based on district need, and the School Tax Relief (STAR) program should be eliminated.
Recommendations related to State School Aid
Public dollars, especially State education aid, should be targeted based on needs.
With the full “phase-in” of Foundation Aid complete, aid in future years should be better targeted based on district need.
The School Tax Relief (STAR) program should be ended.
Key Data
$2.8 billion
— Amount of State education aid sent to the wealthiest school districts that already fund a sound basic education locally.
New York State's school aid has reached record levels, with total spending hitting $85 billion for the 2023-24 school year, even as enrollment declines. To address future budget gaps and improve educational outcomes, the state should reallocate aid from wealthy districts that can already fund a sound basic education and implement a comprehensive performance management system.
Recommendations related to State School Aid
The State should reduce or reallocate aid to wealthy school districts that are able to provide a Sound Basic Education with local resources and regular federal aid.
The State should have a comprehensive performance management system for school districts that uses robust metrics to track activities and results, identifies and spreads best practices, and appropriately holds districts accountable.
To balance the budget, the State should rein-in spending growth, with poorly targeted school aid being a reasonable option for spending control.
The State should distribute expense-based aids based on need rather than on a per-pupil basis, district spending, or other factors.
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.
$37.4 billion
— Total amount of State school aid for the 2023-24 school year.
$2.8 billion
— State aid directed to 152 school districts that already fully fund a Sound Basic Education with local and regular federal resources.
8.8 percent
— Increase in State school aid for the 2023-24 school year.
10.2 percent
— Increase in per-pupil State aid for the 2023-24 school year.
New York State school aid is increasing by 8.8% to $37.4 billion for the 2023-24 school year, with per-pupil funding rising by 10.2%. A significant portion of this funding, including $2.8 billion directed to districts that already fully support a Sound Basic Education, highlights the distribution of state resources across various school districts.
Key Data
8.8%
— The percentage increase in State school aid from $34.4 billion to $37.4 billion.
$37.4 billion
— The total amount of State school aid for the 2023-24 school year.
10.2%
— The increase in per-pupil State aid.
$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 that goes to other districts in excess of the Sound Basic Education level.
New York State Budget Fiscal Year 2024 Major Actions and Fiscal Risks As of First Quarter Update New York City Fiscal Year 2024 Adopted Budget and Outlook
New York's total school spending is projected to reach $85 billion in school year 2024, a figure that significantly exceeds the $68 billion estimated for statewide sound basic education needs. To address this, the state should reform its aid formulas to prioritize need, reduce funding to wealthy districts that can self-fund, and eliminate "hold harmless" provisions that guarantee year-over-year increases.
Recommendations related to State School Aid
Target all school aid based on need, reduce aid to wealthy districts that fund a sound basic education with local resources, and eliminate hold harmless provisions that ensure state aid increases year-over-year.
The State should not increase State aid to wealthy districts that self-fund a sound basic education.
The State should begin to reduce State aid to wealthy districts that self-fund a sound basic education.
The State should eliminate hold harmless provisions that ensure state aid increases year-over-year.
The State should combine expense-based aids into needs-based formulas to account for local wealth and capacity.
Key Data
10 percent
— State school aid is set to increase by this amount next year in the third and final year of the phase in of higher Foundation Aid.
$85 billion
— Total school spending—combined local, State, and federal aids, excluding extraordinary COVID-19 aids—is projected to reach this amount in school year 2024.
$10 billion
— This amount of spending is based on district expenses, not local need or fiscal capacity.
$3.1 billion
— This amount in State aid will go to 164 districts that self-fund a sound basic education before receiving any State aid.
$68 billion
— This is the estimated Statewide sound basic education need, which is far exceeded by the $85 billion in total spending.
New York should refrain from increasing state school aid for wealthy districts that already self-fund a sound basic education, which currently totals $3.1 billion for the 2022-23 school year. Additionally, the state should reform aid formulas to consolidate expense-based aids into foundation aid, ensuring resources are better targeted toward high-need districts.
Recommendations related to State School Aid
The State should not increase State school aid for districts already self-funding a sound basic education.
State aid formulas should be reformed to fold expense-based aids into foundation aid to better target funding to high need districts.
Key Data
$3.1 billion
— State aid to wealthy school districts that self-fund a sound basic education in school year 2022-23.
New York is approaching the final year of its Foundation Aid phase-in, prompting questions about the long-term sustainability and equity of school funding. The State Education Department has requested $1 million to study aid formulas to ensure resources are allocated where they are most needed.
Recommendations related to State School Aid
The State should propose a long-term strategy for equitable and sustainable school aid spending in this year's budget.
The State should ensure that state aid funding is allocated where it is most needed beginning in school year 2024-2025.
Key Data
$1 million
— The amount requested by the State Education Department to study school aid formulas.
$13 billion
— The amount of pandemic-related federal aid received by the State for schools.
12.8 percent
— The increase in State Operating Funds spending in fiscal year 2023.
State school aid increased by 6.7% to $34.4 billion for the 2022-23 school year, while per-pupil aid rose by 9.4% due to declining enrollment. 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, continues to be distributed despite the districts' ability to support education costs independently.
Key Data
6.7%
— The increase in total State school aid from the previous year.
$32.2 billion
— The amount of State school aid in the year prior to the 6.7% increase.
$34.4 billion
— The total amount of State school aid for the 2022-23 school year.
9.4%
— The increase in per-pupil State aid resulting from declining enrollment.
$3.1 billion
— The amount of State aid directed to 176 wealthy districts that can fully support a Sound Basic Education.
$10.4 billion
— The amount of State aid provided to districts in excess of the Sound Basic Education level.
New York State continues to increase school aid, with total spending reaching $34.4 billion this year, yet the state lacks adequate systems to monitor performance and hold districts accountable for student achievement. The state should reform the Foundation Aid formula and implement a robust performance management system to better target resources to high-need districts and ensure educational outcomes.
Recommendations related to State School Aid
The State should stop increasing aid to wealthy districts that fund a Sound Basic Education 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 a Sound Basic Education.
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 implement a robust performance management system to track outcomes, quality, and efficiency of services across districts.
The State should 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 current school year, representing a 6.7 percent increase from the previous year.
9.4 percent
— The increase in per-pupil State aid this year as enrollment declines.
$3.1 billion
— The amount of State aid directed to 176 districts that already fund a Sound Basic Education with local and regular federal resources.
$13.6 billion
— The total amount of State aid being sent across all districts above the level needed to fund a Sound Basic Education.
$3.8 billion
— The estimated amount districts will spend in federal COVID-related education aid this school year.
$14.7 million
— The combined funding shortfall for the only four districts remaining below the level needed to provide a Sound Basic Education.
New York State's financial outlook has weakened due to reduced tax receipt forecasts, leading to projected budget gaps that grow to $6.2 billion by fiscal year 2027. To address these fiscal challenges, the State is advised to prioritize building reserves and curbing recurring spending in high-growth sectors like Medicaid and school aid.
Recommendations related to State School Aid
The State should seek to reduce recurring spending, especially in high-growth areas such as Medicaid and school aid, while continuing to build reserves.
New York should fund new recurring programs by reducing planned spending elsewhere, specifically by cutting the $2 billion in state aid currently directed to wealthy school districts that can already afford to provide a sound basic education. Maintaining fiscal discipline and building reserves are essential to ensure the state can support residents during future economic downturns.
Recommendations related to State School Aid
The State should fund new recurring programs by reducing planned spending elsewhere, such as by cutting the more than $2 billion provided to wealthy school districts that already have sufficient local funding.
Key Data
$2 billion
— Amount provided annually to wealthy school districts that already have sufficient local funding to provide a sound basic education.
$5 billion
— Total non-recurring funds available for fiscal year 2023 that the State should allocate to non-recurring programs.
$10 billion
— Proposed increase in State Operating Funds (SOF) spending for the upcoming year.
$4.6 billion
— Average annual projected growth of the State Operating Funds (SOF) budget after fiscal year 2023.
$2.2 billion
— Proposed homeowner tax rebate amount that could be reallocated to balance the budget.
New York State school aid is projected to increase significantly, reaching $38.4 billion by fiscal year 2027, yet the state fails to ensure this nation-leading spending delivers improved student outcomes. To address this, the state should prioritize targeting aid to high-need districts while eliminating 'hold harmless' provisions and restraining funding for wealthy districts that can already self-fund basic education.
Recommendations related to State School Aid
The Legislature should work to better target school aid to high-need districts, shifting some expense-based aids to foundation aid.
The State should eliminate the hold harmless provision and restrain aid to wealthy districts that can already self-fund a sound basic education.
Education successes will only happen if aid and education services are carefully evaluated and well managed.
Key Data
$41 billion
— Cumulative amount of additional school aid flowing to schools over the next five years.
$29.1 billion
— Amount of state school aid in the current school year.
$38.4 billion
— Projected amount of state school aid by fiscal year 2027.
32 percent
— The projected increase in state school aid from the current school year to fiscal year 2027.
$11.4 billion
— Amount of extraordinary federal aid districts will spend over the coming years.
$2.7 billion
— Annual amount of aid received by wealthy districts that already self-fund a sound basic education.
New York's executive budget includes an unprecedented increase in state and federal education aid, which requires rigorous performance management to ensure it delivers actual results. To maintain fiscal responsibility, the state should limit aid to wealthy school districts that already possess sufficient local resources to fund a sound basic education.
Recommendations related to State School Aid
The State should restrain spending by curtailing school aid to wealthy districts, which provide enough local resources to fund a sound basic education.
At minimum, aid to wealthy school districts should not increase.
The State should implement a performance management and accountability process to ensure results from the unprecedented increase in State school and federal education aid.
New York schools are receiving approximately $13 billion in one-time federal COVID-19 aid, adding to already high recurring state spending that is double the national average per pupil. To ensure these funds improve student outcomes, the state must implement rigorous performance management, reallocate resources based on results, and target future increases specifically toward the highest-need students and districts.
Recommendations related to State School Aid
The State should use a rigorous performance management process to oversee school aid spending.
The State should monitor how funds are used, set goals, monitor results against those goals, and reallocate resources and change programs when results are unsatisfactory.
Goals and results should focus on measuring and reversing pandemic-related learning loss, accelerating achievement compared to prior achievement and national benchmarks, and reducing education disparities.
Initiatives should be evaluated to identify what works so programs and learning strategies can be either replicated or terminated.
Any future increases in school aid should only be targeted to districts, schools, and students with the highest needs.
Key Data
$13 billion
— Amount of one-time federal COVID aid funds provided to New York's schools.
New York State's financial plan faces a $3.5 billion fiscal cliff by 2025 due to reliance on non-recurring federal aid to support recurring expenses. To manage this, the state should prioritize fiscal transparency and consider restraining new aid growth for wealthy school districts, which is a primary driver of planned spending increases.
Recommendations related to State School Aid
The State should retain flexibility in how it will reduce future budget gaps, including restraining new aid growth for wealthy districts since that is preferable to other alternatives to meaningfully control spending.
Key Data
$1.2 billion
— Federal fiscal relief used to offset school aid funding in fiscal year 2021.
$3.5 billion
— The projected fiscal cliff, or gap between available funding and planned spending, in fiscal year 2025.
$12.7 billion
— Total federal American Rescue Plan (ARP) aid received by the State in May 2021 to be disbursed over four years.
New York schools are receiving record levels of state and federal funding, with per-pupil spending reaching $32,352, yet this influx requires rigorous performance management and targeted distribution to ensure it actually improves student outcomes. To avoid future fiscal instability, the state must prioritize aid for high-need districts while reducing support for wealthy ones and implementing detailed tracking for all expenditures.
Recommendations related to State School Aid
The State should focus funding on districts with the greatest need, and reduce aid and aid increases to wealthy districts.
The State should ensure transparency, results, and accountability through stronger, permanent performance measurement and management.
The Legislature, Division of the Budget, State Education Department, and the Comptroller’s office should work together to ensure that all recurring and one-time aid is tracked and reported in detail.
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.
Key Data
$11.4 billion
— One-time federal pandemic aid that will be spent over four years.
$2.9 billion
— Increase in State aid from school year 2020-21 to 2021-22.
$32,352
— Total per pupil spending this school year.
$40 billion
— Projected school aid (including School Tax Relief program) in fiscal year 2025.
$3.5 billion
— The fiscal cliff the State will face once extraordinary federal aid is depleted.
$2.5 billion
— Amount received from the State this school year by 168 districts that already receive sufficient aid from local and recurring federal sources.
New York State is increasing school aid by $2.9 billion to a total of $32.5 billion for the 2021-22 school year, while also distributing $11.4 billion in one-time federal pandemic aid. Despite this historic influx of funding, the State must implement stronger oversight and accountability measures to ensure these resources effectively improve student outcomes and reduce educational disparities.
Recommendations related to State School Aid
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.
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 and ensuring a healthy return to school.
On an ongoing basis, the State should manage, expect, and hold districts accountable to improve achievement and reduce educational disparities, using data that it makes publicly available.
The State should consider significantly restraining the new funds it provides to wealthy districts.
State leaders should work with districts to set measurable goals to address the disruptions and improve learning outcomes going forward—a process of performance measurement and management that should be applied government-wide.
Key Data
$32.5 billion
— Total State school aid for the 2021-22 school year.
$2.9 billion
— The increase in State school aid over the 2020-21 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.
$39.8 billion
— Projected State aid by school year 2024-25.
At this time last year, New York State estimated that tax receipts would fall short of pre-pandemic estimates by $15 billion annually on average, totaling $60 billion over four years. Receipts, however, have been much stronger than expected. By April 2021, the State reduced its four-year tax receipt shortfall estimate by 80 percent, to $11.8 billion. Over the four-year period, the State also will receive at least $21.1 billion of targeted and general federal fiscal…
$209 billion is the total spending in New York State's Enacted Budget for Fiscal Year 2022. Six months ago, New York State was staring down a four-year revenue shortfall totaling $60 billion—however, revenues have strengthened and the federal government passed a stimulus bill that includes what may be the largest…
New York's school aid spending is already the highest in the nation, doubling the national average, while the state also receives significant federal support for elementary and high schools. Despite these high levels, the state should utilize the next two years to restructure spending to ensure long-term sustainability once federal funds are depleted.
Recommendations related to State School Aid
To address the gaps that will exist and grow when the federal funds are depleted, the State should use the next two years to restructure spending to be more sustainable.
Key Data
$9 billion
— Additional federal aid provided by the American Rescue Plan for elementary and high schools.
New York's legislative budget proposals for fiscal year 2022 include significant increases in education aid that are unnecessary for providing a sound basic education, as the state already provides over $1 billion annually to districts with sufficient local resources. Instead of broad increases, the state should modernize the Foundation Aid formula and direct funding specifically toward high-need districts to ensure a sustainable and equitable system.
Recommendations related to State School Aid
State increases should be directed toward high need districts, and support for districts raising sufficient local resources should be held flat or reduced.
The Foundation Aid formula should be modernized to account accurately for support by local resources.
Federal funds should be spread over the coming years to support the transition to a sustainable system that supports a sound basic education for all students.
The state should restructure school aid to focus resources on needy districts.
Key Data
$1 billion
— The amount provided annually to districts that already raise enough resources locally to provide a sound basic education.
7.1 percent
— The proposed increase in total school aid for school year 2021-22 in the Executive Budget.
The state should smooth year-to-year school aid disbursements to avoid the volatility proposed in the Executive Budget, which includes a 7.1 percent increase followed by an 8.4 percent decrease. Furthermore, any school aid spending should be prioritized for districts with the greatest need, potentially by reallocating funds from districts with sufficient local resources.
Recommendations related to State School Aid
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, the State should facilitate increases in aid to high-need districts by reducing aid to districts with sufficient local resources to fund a sound basic education.
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 used 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 following year.
New York State can balance its budget without raising personal income taxes by pursuing alternative strategies such as restructuring spending and targeting education aid to low-wealth school districts. These measures, combined with anticipated federal aid, offer a path to fiscal stability without risking the departure of high-income earners.
Recommendations related to State School Aid
The State should pursue targeting education aid to low wealth school districts as a means to balance the budget.
New York school districts spend significantly more on employee benefits than the national average, contributing to high per-pupil costs. By aligning employee health insurance premium contributions with state employee benchmarks, school districts could generate $846 million in annual savings to help offset reductions in state aid.
Recommendations related to State School Aid
New York’s 673 school districts should examine all areas of spending, including the high rate of spending on public school health benefits, to find efficiencies and contain costs in the face of stagnant or decreasing State aid and localities’ looming budget gaps.
School districts should increase employees’ health insurance premiums to the State employee level to identify savings to offset the impact of State aid actions.
Key Data
$846 million
— Annual savings if all New York school district employees contributed the same share of premiums as State employees.
$24,040
— Amount spent per public elementary and secondary school pupil by New York State and local governments in fiscal year 2018.
$12,612
— National average spending per public elementary and secondary school pupil in fiscal year 2018.
$6,813
— Amount spent per pupil on benefits in New York, which is 116 percent higher than the national average.
$7 billion
— Total annual spending by New York school districts on health insurance for employees, their families, and retirees.
$1.35 billion
— Proposed reduction in districts' state aid in the fiscal year 2022 Executive Budget.
New York's budget relies on one-time federal education aid to inflate school funding in the short term, leading to a projected 8.7 percent decrease in the following year. To address this, the state should smooth out these fluctuations and reallocate funding by reducing aid to wealthy districts that do not require state support to provide a sound basic education.
Recommendations related to State School Aid
The State should smooth the year-to-year fluctuations in school aid to avoid a sudden drop-off in funding.
The State should adjust the timing of its own aid or flexible federal funds to the extent possible to mitigate funding drops.
The State's overall distribution approach should focus on directing aid to high-need districts while reducing aid to wealthier districts.
Reducing aid to high-income districts that already support a sound basic education would provide resources to increase aid to other districts.
Key Data
7.1 percent
— Year-to-year growth in aid to school districts for the 2021-22 school year.
8.7 percent
— Projected decrease in school aid in the year following 2021-22.
$1.6 billion
— Estimated annual State aid currently disbursed to high-income districts that already support a sound basic education.
$1.3 billion
— Annual savings in State funds from the proposed Local District Funding Adjustment.
$700 million
— Annual savings from the proposed consolidation of certain expense-based aids into a 'Services Aid' program.
$3.1 billion
— Amount of federal education aid to be disbursed in fiscal year 2022.
New York State allocates nearly 30 percent of its operating funds to school aid, yet $1.6 billion of this funding annually supports wealthy districts that already possess sufficient local resources. To address the current fiscal crisis, the state should prioritize directing these limited resources toward districts that lack the capacity to fund a sound basic education.
Recommendations related to State School Aid
New York State should focus its scarce resources on those school districts that lack the local resources to fund a sound basic education.
Key Data
30%
— The portion of State Operating Funds spending that is accounted for by school aid.
$1.6 billion
— The amount of annual school aid directed to wealthy districts that already possess sufficient local revenue to fund a sound basic education.
New York State's failure to release a detailed plan for closing its $9 billion budget gap has created significant uncertainty for school districts and other recipients of state funding. This lack of transparency has forced some districts to prematurely cut budgets and announce layoffs, highlighting the need for immediate disclosure of planned spending reductions.
Recommendations related to State School Aid
The State must release a specific and detailed plan for closing New York State’s fiscal year 2020-2021 $9 billion budget gap to resolve the uncertainty facing schools and other entities.
The State should provide transparent disclosures regarding State budget actions, similar to the updates provided on the COVID-19 response.
The State must inform all stakeholders of the planned reductions for each affected program to allow for appropriate planning and management.
Key Data
$9 billion
— The size of the New York State fiscal year 2020-2021 budget gap that requires a specific closing plan.
$1.7 billion
— The amount of aid to localities that the Division of Budget has withheld, creating uncertainty for recipients.
$8 billion
— The amount of potential cuts in local aid outlined in state budget reports.
$1 billion
— The amount of potential cuts in state operations outlined in state budget reports.
New York State faces a $58 billion budget gap due to the pandemic, requiring difficult choices to balance the budget. One proposed measure to help close the $8 billion gap is reducing state school aid to wealthy districts.
Recommendations related to State School Aid
The state should consider reducing school aid to wealthy districts to help close the $8 billion budget gap.
Key Data
$1,169 million
— FY2020 federal aid offsets specifically for school aid.
$8 billion
— Annual unidentified budget balancing actions required to close the projected budget gap.
New York City faces a significant budget risk because its financial plan assumes higher state education aid than the state has actually committed, potentially leaving the city with a shortfall of over $1 billion in future years. To mitigate this, the state should prioritize distributing education aid to high-need districts rather than maintaining current proportional funding levels.
Recommendations related to State School Aid
The State should better target funding to high-need districts rather than distributing aid in the same proportion as fiscal year 2021.
The State should take actions to limit local aid cuts to $800 million to mitigate the impact on the City's budget.
Key Data
$1.1 billion
— Potential reduction in state education aid compared to the City's projection in fiscal year 2022.
$1.3 billion
— Potential reduction in state education aid compared to the City's projection in fiscal year 2023.
$916 million
— Potential reduction in state education aid compared to the City's projection in fiscal year 2024.
$360 million
— Shortfall in fiscal year 2021 state aid projection against the City's prior expectations.
$717 million
— Amount of federal education aid received by the City through the State.
$1.2 billion
— Potential additional federal education aid the State may receive in state fiscal year 2022.
New York State's fiscal plan includes significant reductions in school aid, with cuts reaching $2.3 billion by fiscal year 2024 compared to initial projections. To address these gaps, the state should prioritize reducing aid to wealthy districts that already possess sufficient local resources to support a sound basic education, rather than implementing broad, indiscriminate cuts.
Recommendations related to State School Aid
The State should reduce school aid by $800 million in the current year by basing the distribution of cuts on district need rather than implementing broad reductions.
Policymakers should reduce funds serving lower priority needs by targeting aid reductions to districts that spend well in excess of a Sound Basic Education.
The State should shift the burden of funding to districts that can afford to pay for additional services if they choose, rather than cutting aid to districts that rely on state support for a Sound Basic Education.
Key Data
$1.2 billion
— The amount by which the Enacted Budget reduced State school aid in fiscal year 2021 compared to projections.
$2.3 billion
— The projected reduction in State school aid in fiscal year 2024 compared to initial projections.
$1.6 billion
— The amount of aid to primarily wealthy districts that was previously recommended to be eliminated.
$800 million
— The recommended amount for a local aid decrease, which is considered sufficient to address fiscal gaps.
New York State faces an $8 billion reduction in local assistance spending, necessitating a strategic approach to school aid that prioritizes districts lacking sufficient local resources to provide a sound basic education. By reforming the Foundation Aid formula and targeting cuts toward districts that do not require state aid to meet educational standards, the state can balance its budget while protecting essential services.
Recommendations related to State School Aid
The State should focus on first ensuring that all districts have sufficient funds to provide a sound basic education (SBE), and reduce funds to districts that already have sufficient local resources to meet this requirement.
As the State evaluates measures to close the budget gap, it should first ensure that districts that lack sufficient local resources to meet SBE standards receive the necessary funding.
Decreases in funding should first target districts that do not need State aid to fund an SBE.
By incorporating funding from various 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.
The State should revisit how New York 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 total 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 that already raised enough local revenue to fund a sound basic education.
$237 million
— The total amount of library, textbook, and software aids provided to districts regardless of student need or wealth.
$223 million
— The total amount of high tax aid, which provides more funding to wealthier districts.
The fiscal year 2021 budget reduces state funding for education, relying on federal aid to maintain overall growth while allowing wealthy districts to continue receiving state support despite their ability to fund basic education locally. Consequently, underfunded school districts face stagnant aid levels, perpetuating inequities in the distribution of state resources.
Key Data
$1.1 Billion
— Amount of federal aid provided for education in fiscal year 2021.
New York should limit increases in education aid to only those districts that lack the revenue to fund a sound basic education, rather than providing broad increases. By targeting these high-need districts, the state could save over $750 million compared to the Governor's proposed budget while still ensuring all students receive adequate funding.
Recommendations related to State School Aid
Limit increases in education aid to those needed to fund a sound basic education and improve the Foundation Aid formula.
Target school aid to underfunded districts to restrain budget growth.
Do not undermine Foundation Aid progressivity by layering on less progressive forms of aid.
The Legislature should reject shifting special education out-of-district placement costs onto school districts outside of New York City.
Key Data
$75 million
— The amount by which the State could increase school aid to support a sound basic education in every district if targeted only to underfunded districts.
$750 million
— The amount that would be saved from the Governor’s proposed $826 million increase if school aid were limited to only high-need districts.
$826 million
— The Governor’s proposed increase in school aid.
27 percent
— The portion of the State operating budget that school aid comprises.
$1.8 billion
— The total amount of ten education aid streams that the Executive Budget proposes to fold into Foundation Aid.
New York's fiscal year 2021 executive budget increases education aid by $826 million, which is $750 million more than necessary to provide a sound basic education statewide, while failing to adequately target underfunded districts. The proposal also improperly folds various aid categories into the Foundation Aid formula without necessary revisions, missing an opportunity to better align funding with actual student needs and local revenue efforts.
Recommendations related to State School Aid
The State should distribute the $1.8 billion in folded aids 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.
The State should relax hold-harmless provisions in the Foundation Aid formula.
The State should eliminate automatic minimum increases in school aid.
The State should move forward with controlling building and transportation aid costs while ensuring schools have what they need.
Rather than provide the unnecessary $200 million "fiscal stabilization fund," the State should dedicate these funds to the State’s reserves in preparation for a recession.
Key Data
$750 million
— The amount by which the Executive Budget exceeds what is needed to fund a sound basic education statewide.
$13.6 billion
— The amount by which school district spending in 2018 exceeded what was necessary to fund a sound basic education.
$30 million
— The funding gap that 13 districts will continue to face despite the proposed aid increase.
$1.8 billion
— The total amount of ten different education aids being permanently folded into Foundation Aid.
$5.1 billion
— The annual cost of building and transportation aid that the budget proposal aims to rein in.
$200 million
— The amount allocated to a "fiscal stabilization fund" that could instead be used for State reserves.
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…
Consolidating expense-based school aids into the Foundation Aid formula would better direct resources to districts based on student need and wealth. The proposed $826 million increase in school aid could be reduced to curtail spending growth without negatively impacting the resources required by needy districts.
Recommendations related to State School Aid
The state should consolidate certain expense-based school aids into the Foundation Aid formula to ensure funds are directed where they are needed most.
New York should properly target school aid to provide all students a sound basic education while curtailing spending growth.
The state should reduce the proposed $826 million increase in school aid without sacrificing the resources that needy districts require.
Key Data
$826 million
— The proposed increase in school aid in the fiscal year 2021 Executive Budget.
New York's spending growth is being driven by Medicaid and school aid, with education aid increasing by 3.7 percent annually between 2011 and 2020. To address fiscal imbalances, the state should focus education aid on needy districts to fully fund a sound basic education, as wealthy districts received $1.6 billion in aid despite having sufficient local resources.
Recommendations related to State School Aid
Focus education aid on needy districts to fund fully a sound basic education.
Key Data
3.7 percent
— Average annual increase in education aid between fiscal years 2011 and 2020.
$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 State's Foundation Aid formula is flawed, resulting in the misallocation of funds where wealthy districts receive excess aid while some districts lack the resources to provide a sound basic education. Despite a $23 billion increase in total school district revenues between 2006 and 2018, the state spends $13.6 billion more than necessary to meet educational standards, necessitating a reform of aid formulas to better target districts in need.
Recommendations related to State School Aid
The State should revamp the Foundation Aid formula to properly account for local wealth and actual local funding.
Policymakers should eliminate hold-harmless provisions and guaranteed minimum funding increases that prevent aid from being directed where it is needed most.
The State should use the most up-to-date data available when calculating aid distributions to ensure accuracy.
Expense-based aids and other types of education aid, such as high tax aid, should be redirected towards those districts without the resources to provide a sound basic education.
Key Data
$13.6 billion
— The amount New York spent more than necessary to fund a sound basic education in school year 2017-2018.
$1.6 billion
— The amount of state aid received by 129 districts in school year 2017-2018 that already raised enough local revenue to fund a sound basic education.
$75 million
— The total funding needed to bring the 25 districts that lacked sufficient resources to provide a sound basic education up to the required level.
$23 billion
— The total increase in school district revenues between school year 2006-2007 and 2017-2018.
$18.4 billion
— The amount of Foundation Aid in school year 2019-2020, which accounts for two-thirds of state education aid.
The New York State FY 2020 Midyear Update focuses on addressing a significant Medicaid-driven budget gap, while briefly suggesting that other budget areas, such as mistargeted school aid and economic development programs, should also be considered for potential savings. The state's plan to address the gap relies on a $2 billion payment deferral and delays in presenting a comprehensive savings plan.
New York State's Foundation Aid formula is flawed, resulting in the over-allocation of state aid to wealthy districts while 29 districts still lack the resources to provide a sound basic education. Despite statewide spending exceeding the amount necessary to fund a sound basic education by $13 billion, the current distribution system fails to target aid effectively to the districts that need it most.
Recommendations related to State School Aid
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 that prevent aid decreases even when enrollment declines or district wealth increases.
The state should eliminate minimal growth rates to ensure aid is not automatically increased for overfunded districts.
The state must use the most up to date data available when calculating aid requirements.
The state should target school aid to those districts that need it to provide a sound basic education.
Key Data
$13 billion
— The amount New York will spend more than necessary to fund a sound basic education in school year 2019-2020.
$83 million
— The total amount of funding needed to bring the 29 districts currently lacking resources up to the level required for a sound basic education.
$1.9 billion
— The amount the wealthiest decile of districts are on track to spend more than needed to fund a sound basic education in school year 2020.
$20 billion
— The increase in total school district revenues between school year 2006-2007 and 2016-2017.
$18.4 billion
— The amount of Foundation Aid in the $27.3 billion total school aid for school year 2019-2020.
$33,000
— The average amount spent per student by the wealthiest decile of districts.
New York State's Foundation Aid formula fails to ensure all districts have sufficient resources to provide a sound basic education, leaving 29 districts underfunded by nearly $83 million despite significant overall spending increases. The current distribution of aid is poorly targeted, with wealthy districts receiving disproportionate support through mechanisms like High Tax Aid while the Foundation Aid formula relies on outdated measures of poverty and local funding.
Recommendations related to State School Aid
Poorly targeted forms of school aid, including High Tax, Library, Textbook, and Software Aids, should be folded into a reformed Foundation Aid formula that uses current data—including actual local funding and student enrollment.
The arbitrary floors, ceilings, phase-ins and add-ons to the Foundation Aid formula should be eliminated.
Key Data
$62.6 billion
— Estimated cost for school districts in New York State to provide a sound basic education to all students in school year 2020.
$83 million
— Total amount by which 29 school districts are underfunded despite historic State aid increases.
$223 million
— Additional State aid specifically targeted to wealthy districts through High Tax Aid.
$240 million
— Annual total of Library, Textbook, and Software Aids that do not account for district wealth.
$18.4 billion
— Foundation Aid component of the total $27.3 billion in school year 2019-2020 education aid.
New York State's education funding is already sufficient to provide a sound basic education, with projected revenues of $72 billion in 2020 exceeding the required $62.6 billion. Instead of broad increases, the state should target a $164 million aid increase specifically to the 32 districts that currently lack the resources to meet educational standards.
Recommendations related to State School Aid
The state should target the distribution of aid to districts that need it, rather than ensure that almost every district gets more no matter its circumstance.
New York should direct a state aid increase of just $164 million to the 32 districts that currently have less than is needed to provide a sound basic education.
Key Data
$62.6 billion
— The amount estimated by state education aid formulas as required to provide a sound basic education statewide.
$72 billion
— The projected school district revenues from federal, state, and local sources in 2020.
$164 million
— The total amount needed by 32 specific districts to provide a sound basic education.
$465 million
— The amount of state aid received by the 10% wealthiest districts as of 2018-2019, despite already having sufficient resources.
$20 billion
— The increase in total district funds between the 2006-2007 and 2016-2017 school years.
41%
— The percentage increase in total district funds between the 2006-2007 and 2016-2017 school years.
New York can ensure all school districts provide a sound basic education by targeting $164 million to the 32 currently underfunded districts, rather than increasing total aid by the billions proposed by advocates. Current school district spending already exceeds the amount necessary to provide a sound basic education by $9.4 billion, indicating that existing resources are sufficient if allocated correctly.
Recommendations related to State School Aid
The State could ensure all districts have the resources to provide an SBE by increasing aid by $164 million and targeting it to 32 of the state’s 674 districts that are underfunded.
New York could ensure that all districts have the revenues to provide an SBE by directing $164 million to those districts that currently do not have sufficient combined State, local, and federal funds to provide an SBE.
This allocation should be prioritized during budget negotiations and State aid above this amount should be targeted to educational needs and balanced with the State’s fiscal realities.
Key Data
$164 million
— The amount of additional aid required 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 school district 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.
41 percent
— The increase in school district revenues between school year 2006-2007 and school year 2016-2017.
New York State currently spends enough in the aggregate to provide a sound basic education, yet the distribution of school aid remains poorly targeted and relies on a flawed Foundation Aid formula. Rather than broad increases, the state should prioritize directing aid to the fewer than 30 districts that remain underfunded by an aggregate of less than $150 million.
Recommendations related to State School Aid
The State should target any increase in aid to those districts that need it most.
The State should reform the Foundation Aid formula to eliminate inconsistent local share calculations, arbitrary adjustments, and outdated data.
The State should direct aid increases only to districts where there are shortfalls to ensure all students receive a sound basic education.
Key Data
$69 billion
— Total amount spent on public education in New York State in school year 2016-2017.
$9 billion
— Amount by which New York education spending exceeds what is necessary to fund a sound basic education.
$6.6 billion
— 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.
$150 million
— Aggregate amount by which less than 30 districts would remain underfunded after including revenues from the Governor’s school aid proposal.
$956 million
— Total increase in state aid proposed in the Governor’s Executive Budget.
$338 million
— Increase in Foundation Aid proposed in the Governor’s Executive Budget.
New York's current financial plan proposes a 3.6 percent increase in school aid, totaling $956 million. To ensure fiscal responsibility, the state should instead limit this growth to 2 percent and prioritize reallocating funds to districts with the highest needs.
Recommendations related to State School Aid
The State should fund a sound, basic education with a 2 percent increase and by reallocating school aid to high-need districts.
The Executive Budget should restrain total growth in favor of better targeting aid to districts that need it.
Key Data
3.6 percent
— The current financial plan's assumed increase in school aid.
$956 million
— The dollar amount associated with the 3.6 percent increase in school aid.
Between school year 2010-2011 and 2018-2019, state school aid is projected to increase by 26.9 percent, reaching $26.6 billion. New York's per pupil spending in 2016 was $22,366, nearly double the national average of $11,762, with growth rates outpacing the national average by over 50 percent.
Key Data
26.9%
— Projected growth in state school aid between school year 2010-2011 and school year 2018-2019.
$22,366
— New York's per pupil spending in school year 2016, compared to the national average of $11,762.
17.2%
— Growth rate of per pupil spending in New York between school year 2011 and 2016, compared to 11.4 percent nationally.
The New York State Fiscal Year 2018-2019 Enacted Budget increased formula-based school aid to local districts by $859 million, with the majority of these funds allocated to Foundation Aid. While all districts received an increase, the distribution varied significantly, ranging from a guaranteed minimum of 1.9 percent to double-digit percentage increases in specific districts.
Key Data
$859 million
— The increase in formula-based school aid to local school districts in the New York State Fiscal Year 2018-2019 Enacted Budget.
$618 million
— The increase in Foundation Aid, which is intended to support high-needs districts.
3.6 percent
— The increase in Foundation Aid over the 2017-2018 school year.
1.9 percent
— The guaranteed minimum increase in aid received by 148 school districts.
11.1 percent
— The increase in aid received by the Uniondale school district in Nassau County.
9.9 percent
— The per-pupil decrease in aid for the Edinburg school district in Saratoga County.
The New York State Fiscal Year 2019 Budget increases school aid by $1 billion without implementing necessary reforms to direct funding toward high-need districts. This approach fails to address the underlying need for more equitable distribution of educational resources across the state.
Recommendations related to State School Aid
The State should make substantial adjustments to better target school aid dollars to high-need school districts.
Key Data
$1 billion
— Growth in school aid in the New York State Fiscal Year 2019 Budget.
New York's Foundation Aid formula for school funding currently contains significant flaws, such as outdated demographic data and arbitrary funding floors, which result in excess aid for wealthy districts while shortchanging poorer ones. Reforming this system requires streamlining local share calculations and reallocating resources to ensure state aid is directed toward students with the greatest needs.
Recommendations related to State School Aid
New York State should streamline the local share calculation within the Foundation Aid formula to ensure aid is distributed equitably.
The state should repeal arbitrary floors and ceilings in the Foundation Aid formula to eliminate built-in inequities.
New York should update demographic data regularly and repeal any guaranteed amounts or increases to ensure Foundation Aid reflects current needs.
State leaders should direct state aid where it is needed most by students rather than prioritizing political considerations.
Key Data
$26.4 billion
— Executive budget school aid proposal for the 2018-2019 school year.
$769 million
— Total increase in the executive budget school aid proposal.
$17.5 billion
— Total Foundation Aid for the 2018-2019 school year.
$338 million
— Increase in Foundation Aid for the 2018-2019 school year.
$2 billion
— Amount advocates are calling for as an increase in Foundation Aid.
0.25 percent
— Minimum increase included in the new formulas that mostly benefits wealthy districts.
New York's school aid is growing by $769 million, or 3.0 percent, reaching a total of $26.4 billion, with a significant portion of this increase directed toward districts that are already affluent. To address this, the state should reform the Foundation Aid formula to better target funding to areas of greatest need while keeping overall spending within established caps.
Recommendations related to State School Aid
The Enacted Budget should reform the Foundation Aid formula to direct aid where it is needed most.
The Enacted Budget should reprogram expense-based aid into the Foundation Aid formula.
The Enacted Budget should ensure State education spending remains under the school aid cap while providing all districts with sufficient funds to provide a sound basic education.
Key Data
$769 million
— Increase in school aid on a school year basis.
3.0 percent
— Growth rate of school aid.
$26.4 billion
— Total school aid amount.
$338 million
— Portion of the school aid increase that is Foundation Aid.
44 percent
— Percentage of the school aid increase that is Foundation Aid.
Gov. Andrew Cuomo this week gave Republican lawmakers in the state Senate a choice: Back his proposed tax and fee increases or face potential cuts to schools and health care. Watch the original segment here .
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 .
The New York State Executive Budget proposes increasing school aid by $769 million to a total of $26.4 billion, exceeding the state's established school aid cap for the first time. While the proposal includes new formulas for distributing Foundation Aid, it fails to account for enrollment changes and continues to send unnecessary funding to wealthy districts instead of prioritizing those with the greatest needs.
Recommendations related to State School Aid
The Governor should limit school aid growth and make reforms to the distribution of aid to better direct it to the neediest districts.
Instead of layering $338 million in aid on top of the existing distribution, the State should reform the formula to address the flaws that distort the total distribution of $17.5 billion in Foundation 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.
To truly prioritize education, 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.
If the State addresses these shortcomings, education aid easily could abide by the growth cap while ensuring all districts have adequate resources.
Key Data
$769 million
— Increase in total school aid proposed in the New York State Fiscal Year 2018-2019 Executive Budget.
$26.4 billion
— Total proposed school aid for the New York State Fiscal Year 2018-2019.
$651 million
— Increase in formula-based school aid.
$168.2 billion is the NYS Executive Budget for Fiscal Year 2018-2019. Dave Friedfel joins WT[D]P to discuss budget growth, school aid, medicaid, economic development, and proposals to deal with the impact of federal tax law changes.
The state's executive budget continues to increase school aid without implementing necessary structural changes to the funding formula. While a 2 percent cap on expense-based aid growth is included, the proposal relies on an existing $17 billion distribution model that remains fundamentally flawed.
Recommendations related to State School Aid
The state should implement fundamental reforms to the Foundation Aid Formula rather than relying on the existing flawed distribution.
Key Data
$17 billion
— The amount of existing, flawed school aid distribution upon which the Governor's Foundation Aid proposal is based.
$338 million
— The amount of the increase in the Governor's Foundation Aid proposal.
2 percent
— The proposed cap on the growth of expense-based school aid.
New York State distributes $25 billion in annual school aid, yet certain categories like Library, Textbook, and Software Aids and High Tax Aid fail to target funding toward the neediest districts. While Foundation Aid is designed to support lower-wealth areas, High Tax Aid disproportionately benefits wealthier districts, with the top decile receiving $323 per pupil compared to just $100 for the poorest decile.
Recommendations related to State School Aid
In the coming fiscal year, LTSA should be redistributed through the Foundation Aid formula to ensure funding is targeted to the neediest districts.
High Tax Aid should be eliminated because it drives funding to the wealthiest districts in the state.
The state must reform or eliminate education aid categories that do not properly account for district wealth and student needs.
Key Data
$25 billion
— Total state aid sent to local school districts during the 2017-2018 school year.
$17.2 billion
— Amount of Foundation Aid distributed to school districts.
$243 million
— Cost of Library, Textbook, and Software Aids (LTSA) to state taxpayers in the 2017-2018 school year.
$223 million
— Amount of High Tax Aid provided to certain school districts.
$323
— Average per pupil High Tax Aid received by the wealthiest decile of districts.
$100
— Average per pupil High Tax Aid received by the poorest decile of 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 maintains the highest per-pupil education spending in the nation, yet revenue sources vary drastically based on district wealth, with wealthier areas raising significantly more local revenue with less tax effort. To address these disparities, the state should adjust its funding formulas to better account for district wealth and shift resources from affluent areas to those with greater financial need.
Recommendations related to State School Aid
The State should properly account for district wealth and reallocate state resources from high-wealth to low-wealth districts.
Key Data
$21,206
— New York's per-pupil spending compared to the national average of $11,392 as of the 2014-2015 school year.
$10,990
— The average state aid per pupil provided to school districts in the 2015-2016 school year.
$16,167
— The amount of state aid per pupil received by school districts in the lowest wealth decile.
$4,457
— The amount of state aid per pupil received by school districts in the highest wealth decile.
$30,486
— The amount of local resources collected per pupil by school districts in the 10th wealth decile.
$14,639
— The average state aid per pupil received by school districts in the Southern Tier region.
The 2017-2018 New York State budget increased school aid by $1.1 billion but failed to reform the Foundation Aid formula, continuing to distribute funds inequitably by favoring wealthy districts over those with higher needs. Comprehensive modifications to the formula are necessary to ensure resources are directed toward districts that require them most, rather than providing wasteful minimum increases across the board.
Recommendations related to State School Aid
The Foundation Aid formula should be reformed so that it can accomplish its original purpose, ensuring that regardless of a district’s wealth, students receive the resources necessary to achieve a sound basic education.
In order to adequately fund education in all districts without excessive state spending, more comprehensive modifications to the Foundation Aid formula are required.
The state should avoid including generous, unnecessary, and wasteful minimum increases for all school districts in the budget.
Key Data
$25.8 billion
— Total school aid authorized in the Enacted State Budget for Fiscal Year 2017-2018.
$1.1 billion
— Increase in school aid over the previous year.
$17 billion
— Amount of Foundation Aid, which grew 4.25 percent.
$130 million
— Total 'Additional Increases' provided to 507 of 674 districts.
$2.8 billion
— Amount that would have been directed toward low-wealth, high-need districts under the proposed reforms.
$569 million
— Total spending increase over 2016-2017 levels under the proposed reforms.
New York State's reliance on an emergency budget creates uncertainty for school districts and local governments, necessitating a prompt resolution to outstanding fiscal issues. The Governor and Legislature must prioritize reaching an agreement that includes essential reforms to the State’s Foundation Aid formula.
Recommendations related to State School Aid
The Legislature and Governor should promptly come to an agreement that includes needed reforms to the State’s Foundation Aid formula.
New York's current school aid formula is flawed, relying on outdated data and arbitrary adjustments that misallocate resources to wealthy districts while failing to adequately support those in need. Reforming the formula to better target aid would allow for a more equitable distribution, requiring only $569 million in new state funding to redirect $2.7 billion to districts that need it most.
Recommendations related to State School Aid
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 in the current formula.
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.
Key Data
$24 billion
— Current annual state aid provided to local school districts.
$3.8 billion
— Additional annual state funding requested by advocates for the Foundation Aid program.
$569 million
— New annual state funding required to support a sound basic education under a reformed formula.
$2.7 billion
— Amount of funding that would be redirected to needy districts under a reformed formula.
$22,556
— New York's statewide average per pupil spending, which is the highest in the nation.
$62.7 billion
— Total amount spent by New York's schools in the 2014-2015 school year.
New York State faces a debate over how much additional education funding is required to meet its constitutional obligation to provide a sound basic education, with estimates ranging from $1 billion to $4.3 billion. Rather than simply increasing total spending, the state should reform the flawed Foundation Aid formula to redirect $2.7 billion toward the neediest districts, which would require only $569 million in new funding.
Recommendations related to State School Aid
The state should fix the Foundation Aid formula to ensure resources are distributed based on need rather than historical allocations.
The state should redirect $2.7 billion to needy districts to better align funding with the constitutional obligation to provide a sound basic education.
The state should return Foundation Aid to its intended purpose of directing aid specifically to the neediest districts.
Key Data
$4.3 billion
— Additional funding requested by advocates for the next year.
$2.1 billion
— Additional funding proposed by the Board of Regents.
$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.
The Executive Budget increases total school aid by 3.9 percent to $25.6 billion, with nearly half of that increase allocated to Foundation Aid. However, the current distribution formula relies on flawed calculations that disproportionately benefit wealthy districts, necessitating a reallocation of funds to prioritize less affluent areas.
Recommendations related to State School Aid
The final adopted budget should direct Foundation Aid where it is needed most—among less wealthy districts.
The state should repeal the STAR program, or at minimum, freeze the benefit to stem the growth of this poorly targeted program.
Key Data
$961 million
— The amount by which the Executive Budget increases school aid on a school year basis.
3.9 percent
— The rate at which total school aid is increased in the Executive Budget.
$25.6 billion
— The total amount of school aid proposed in the Executive Budget.
$428 million
— The portion of the school aid increase allocated to Foundation Aid.
45 percent
— The share of the total school aid increase that is comprised of Foundation Aid.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
New York's proposed executive budget for school aid continues to direct resources toward wealthy districts by cementing flaws in the Foundation Aid formula rather than addressing underlying inequities. Fixing the formula's problematic features would allow the state to fully fund Foundation Aid for an additional $569 million, rather than perpetuating a system that fails to prioritize districts with the greatest needs.
Recommendations related to State School Aid
The state must fix the problematic features of the Foundation Aid formula to ensure scarce state dollars are directed to the districts that need them to provide a sound basic education.
New York should implement substantial reforms to the Foundation Aid formula to alleviate current inequities rather than making them permanent.
Policymakers should fully fund Foundation Aid for an additional $569 million by correcting the formula's flaws instead of relying on claims that districts are owed $4.3 billion.
Key Data
$1.1 billion
— Increase in total school aid proposed in the executive budget.
$569 million
— Additional funding required to fully fund Foundation Aid if the formula's problematic features were corrected.
$4.3 billion
— Amount some advocates claim local districts are owed in Foundation Aid.
$16.5 billion
— Total amount of Foundation Aid in the proposed budget.
$25.6 billion
— Total school aid in school year 2017-2018.
The FY2018 Executive Budget includes changes to the Foundation Aid formula that attempt to direct more funding to high-need districts, though some changes continue to benefit affluent districts. Additionally, the budget converts School Tax Relief (STAR) benefits into personal income tax credits totaling $277 million, while freezing Foundation Aid for the 2019 school year.
Key Data
$277 million
— The amount of School Tax Relief (STAR) benefits being converted to personal income tax credits in the FY2018 Executive Budget.
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.
The proposed changes to the Foundation Aid formula would significantly alter funding levels for school districts across New York, with New York City slated to receive an increase of $645,540,262. Major urban districts like Buffalo and Rochester would also see substantial funding adjustments under this new distribution model.
Key Data
$7,127,295,629
— Current Foundation Aid for New York City
$7,772,835,891
— Proposed Foundation Aid for New York City
$645,540,262
— Total change in Foundation Aid for New York City
$495,297,048
— Current Foundation Aid for Buffalo
$641,786,599
— Proposed Foundation Aid for Buffalo
$146,489,552
— Total change in Foundation Aid for Buffalo
New York City's $1.4 billion pupil transportation expense, largely funded by state school aid, faces increased costs due to proposed legislation that would restrict procurement flexibility and mandate costly contract adjustments. Vetoing this bill is essential to maintain competitive bidding practices that previously saved over $400 million and to avoid unnecessary tax exemptions for school bus equipment.
Recommendations related to State School Aid
Governor Cuomo should veto A8019C/S5984-C, a bill that imposes costly restrictions on the procurement of school bus contracts in New York City.
The state must preserve the flexibility to negotiate contracts to provide savings for future taxpayers.
The state should reject the unnecessary and unjustified tax break that exempts school buses, parts, fuel, and other equipment from the sales tax.
Key Data
$1.4 billion
— Annual expense for pupil transportation in New York City, a majority of which is paid for by the State through transportation-based school aid.
$400 million
— Savings achieved over five years by opening the school bus contract process to competition without costly provisions requiring the hiring or retaining of the most senior employees.
8.1 percent
— Growth in the Employment Cost Index (ECI) between the end of 2011 and 2015.
4.7 percent
— Growth in the Consumer Price Index (CPI) between the end of 2011 and 2015.
The interactive map illustrates the proposed increase in school aid per pupil for the 2016-2017 school year across New York State's 674 school districts. It enables users to compare state aid allocations across various major categories for each district.
Key Data
674
— Number of school districts in New York State included in the school aid per pupil map for the 2016-2017 school year.
New York's fiscal year 2017 budget increased school aid by 6.1 percent to $24.3 billion, exceeding the statutory growth cap and disproportionately benefiting affluent districts over those with the greatest needs. Long-standing distribution issues, including hold harmless provisions and expense-based reimbursements, remain unaddressed and continue to misdirect funding away from the neediest school districts.
Recommendations related to State School Aid
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.
Policymakers should reform hold harmless provisions to ensure school aid is distributed based on actual district needs rather than historical allocations.
The state should eliminate reimbursements for spending that currently misdirect aid to wealthier districts.
Key Data
6.1 percent
— Annual increase in school aid in the New York State Enacted Budget for Fiscal Year 2017.
$24.3 billion
— Total school aid amount in the Fiscal Year 2017 budget.
$1.4 billion
— Actual growth in school aid, which exceeded the statutory growth cap.
$434 million
— Funding increase allocated to the elimination of the Gap Elimination Adjustment.
10.4 percent
— Increase in school aid per pupil for the most affluent 10 percent of districts.
7.3 percent
— Increase in school aid per pupil for the neediest districts.
The fiscal year 2017 budget increases school aid by 6.5 percent, though this growth is not directed toward the highest-need districts through foundation aid. Instead of prioritizing targeted funding, the state restored the gap elimination adjustment and failed to freeze the poorly targeted School Tax Relief (STAR) program.
Recommendations related to State School Aid
The state should freeze the poorly targeted School Tax Relief (STAR) program to implement necessary fiscal reforms.
Key Data
6.5 percent
— The rate at which school aid will grow in the fiscal year 2017 budget.
one-quarter
— The portion of the state budget that school aid represents.
Extending the SUNY 2020 and CUNY 2020 program for another five years would maintain tuition predictability and ensure continued state financial support for public universities. This policy helps keep New York's tuition rates competitive, with average in-state costs significantly lower than the national average.
Recommendations related to State School Aid
The final budget should include the extension of the SUNY 2020 and CUNY 2020 Program.
The State should extend the SUNY 2020 and CUNY 2020 Program for another five years to ensure tuition predictability and maintain public support.
Key Data
$300
— Annual tuition increase authorized by the SUNY 2020 and CUNY 2020 Program.
$6,330
— In-state tuition per academic year at CUNY four-year institutions in 2015-2016.
$6,470
— In-state tuition per academic year at SUNY four-year institutions in 2015-2016.
$1 Billion
— Annual state financial support provided to SUNY.
$1.2 Billion
— Annual state financial support provided to CUNY senior colleges.
$7,640
— Average in-state tuition and fees for public four-year undergraduate universities in New York.
The state's proposed budget increases school aid by $991 million, but the funding distribution is flawed because it prioritizes wealthier districts over those with the greatest need. Additionally, the state should reform the School Tax Relief (STAR) program by converting the property tax exemption into a personal income tax credit to improve transparency and prevent abuse.
Recommendations related to State School Aid
The entire funding increase should go to foundation aid, which targets aid to districts with the highest need and least ability to pay.
State aid should give priority to districts with the greatest need and fewest resources.
Converting the STAR exemption into a personal income tax (PIT) credit would allow property taxpayers to see changes in their school district’s tax levy more clearly and prevent taxpayers from receiving the benefit on multiple homes.
Freezing the STAR benefit will stem the growth of this poorly targeted program and ensure that additional benefits do not accrue to school districts that increase taxes.
Key Data
$991 million
— The amount by which the Executive Budget increases school aid on a school year basis.
4.3 percent
— The percentage increase in total school aid under the Executive Budget.
$24.2 billion
— The total amount of school aid proposed in the Executive Budget.
$3.4 billion
— The annual cost to state taxpayers for the School Tax Relief (STAR) program.
$266 million
— The portion of the school aid increase allocated to foundation aid.
The FY2017 State Executive Budget is evaluated based on spending growth, with particular attention given to the expansion of Medicaid and school aid as the state's primary expenditure categories.
New York's proposed fiscal year 2016-17 budget includes a 4.3% increase in school aid, yet the distribution relies heavily on expense-based reimbursements that favor wealthier districts rather than targeting the neediest through Foundation Aid. Budget negotiations should prioritize reforming aid formulas, specifically addressing hold harmless provisions and misdirected transportation and construction reimbursements.
Recommendations related to State School Aid
The State should redirect resources through Foundation Aid to better target aid to the neediest districts.
Budget negotiations should address long-standing problems with the distribution of school aid, such as hold harmless provisions.
The State should reform generous reimbursements for school transportation and construction expenses that currently misdirect aid.
Key Data
4.3%
— The proposed increase in total school aid for the 2016-17 school year.
$24.2 Billion
— The total amount of school aid proposed for the 2016-17 school year.
27%
— The portion of the proposed school aid increase distributed through Foundation Aid.
$400 Million
— The amount of the school aid increase flowing through expense-based reimbursement formulas like Building Aid and Transportation Aid.
$100 Million
— The amount of new Community Schools Aid allocated to high-need districts.
$715
— The average per-student increase in school aid for the poorest 10 percent of districts.
The proposed state budget fails to reform school aid formulas, instead directing $590 million of $991 million in new funding through mechanisms that disproportionately benefit wealthier districts. Additionally, the budget includes controversial tax credits for donations to public and private schools that should be reconsidered.
Recommendations related to State School Aid
The State should improve school aid formulas to ensure they do not favor wealthier districts.
The State should reject the proposed new education tax credits for donations to public and private schools.
The State should avoid allocating new aid through expense-based reimbursements that disproportionately benefit wealthier districts.
Key Data
$590 million
— Amount of new aid allocated through restorations to the Gap Elimination Adjustment and expense-based reimbursements.
$991 million
— Total amount of new aid proposed in the budget.
$190 million
— Amount of new aid allocated through restorations to the Gap Elimination Adjustment.
$400 million
— Amount of new aid allocated through expense-based reimbursements.
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 the distribution of these funds remains problematic due to formulaic distortions that favor wealthy districts. The state needs to reform these formulas to ensure that school aid is allocated more equitably.
Recommendations related to State School Aid
State leaders should address longstanding distortions in the school aid formulas that drive greater aid to wealthy districts.
The state should distribute school aid through an equitable formula rather than continuing current practices.
Key Data
$4 billion
— Increase in state funding for school districts over the last four years.
New York State's recent legislative package includes significant new spending, such as $250 million in aid to nonpublic schools and a $1.3 billion annual property tax relief rebate program, despite existing budget gaps. These commitments, alongside a 4.4 percent average annual growth rate in school aid, place pressure on the state's financial plan and necessitate future cost-saving measures to maintain fiscal balance.
Key Data
$25 million
— Funding allocated to the Yonkers school district.
$250 million
— Increase in aid provided to nonpublic schools.
4.4 percent
— Average annual growth rate of school aid over the past four years.
$1.3 billion
— Annual cost of the new property tax relief rebate program when fully implemented.
New York's fiscal year 2016 budget increased formula-based school aid by $1.3 billion, exceeding the statutory growth cap and directing significant funding to wealthier districts through Gap Elimination Adjustment restorations. This allocation strategy perpetuates spending disparities, as the state failed to address fundamental issues like hold harmless provisions and misdirected expense-based reimbursements.
Recommendations related to State School Aid
The State should address long-standing problems with the distribution of school aid, such as hold harmless provisions, in the coming year.
The State should reform generous reimbursements for school transportation and construction expenses that misdirect aid.
Key Data
6.0%
— Increase in annual formula-based aid to school districts in the fiscal year 2016 state budget.
$1.3 billion
— Actual growth in school aid, which exceeded the statutory growth cap of $377 million.
$603 million
— Funding steered to wealthier districts through restorations to the Gap Elimination Adjustment.
9.2%
— Average aid increase per student for the most affluent 10 percent of New York school districts.
4.8%
— Average aid increase per student for the neediest 10 percent of New York school districts.
$75 million
— Funding allocated for grants to persistently failing schools.
New York's proposed budget increases school aid by 4.8 percent, reaching a total of $23.1 billion, which exceeds pre-recession spending levels by $1.5 billion. The state should prioritize distributing these funds based on student need and district ability to pay rather than continuing to rely on flawed formulas that misallocate resources.
Recommendations related to State School Aid
School aid should be distributed according to student need and district ability to pay.
Loopholes, exceptions, and other provisions that misallocate school aid funds should be corrected regardless of whether other education policy changes are made.
Benefactors of education charities should continue to enjoy the same benefits available for other charitable contributions rather than receiving a new tax credit.
Key Data
4.8 percent
— The increase in school aid proposed in the Executive Budget, which is well above the 1.7 percent cap.
1.7 percent
— The previously agreed upon cap for school aid increases.
$23.1 billion
— The total amount of school aid if the proposed increases are adopted.
$1.5 billion
— The amount by which the proposed school aid exceeds the pre-recession peak.
75 percent
— The proposed tax credit rate for donations to public and private schools.
$1 million
— The cap on the value of the education tax credit per taxpayer.
The FY2016 Executive Budget proposes a 4.8 percent, or $1.1 billion, increase in school aid contingent upon the adoption of various education reforms. However, the proposal fails to address necessary school finance reform, leaving a need to overhaul antiquated and byzantine formulas to better align funding with district needs and ability to pay.
Recommendations related to State School Aid
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 percent
— The proposed super-size school aid increase in the FY2016 Executive Budget.
$1.1 billion
— The dollar amount of the proposed school aid increase in the FY2016 Executive Budget.
The upcoming state budget should prioritize a plan to repair the state's flawed school aid formulas. Without addressing these underlying structural issues, any proposed education reforms are likely to be ineffective.
Recommendations related to State School Aid
Education reforms must include a plan to fix broken school aid formulas to ensure they are not hollow.
New York State's budget faces significant gaps despite projected surpluses, driven largely by spending growth in areas like school aid and Medicaid that exceed established targets. Controlling these costs is essential to closing projected budget gaps that are expected to reach $4 billion within two years.
Key Data
7.5%
— The projected increase in school aid for the next fiscal year, which exceeds the statutory cap.
The proposed $2 billion Smart Schools Bond Act is ill-conceived because it lacks a statewide needs assessment and risks pushing the state toward its statutory debt cap. Instead of funding one-time technology purchases with borrowed money, the state should prioritize critical infrastructure needs that have a proven return on investment.
Recommendations related to State School Aid
New York State is approaching its statutory debt cap (4 percent of personal income) and should prioritize its capital spending.
Capital investment in technology devices is unlikely to yield lasting benefits, as research has not established that investment in technology equipment generates a return in terms of cost savings or other benefits.
No statewide needs assessment or plan exists for judging the adequacy of the investment or its priority relative to other documented and pressing infrastructure needs.
The borrowing capacity remaining under the debt cap should be reserved for high-priority investments, not used to fund yet unjustified one-time technology purchases.
New Yorkers should reject the Smart Schools Bond Act.
Key Data
$2 billion
— The total amount of general obligation bonds authorized by the Smart Schools Bond Act to fund educational technology equipment and other capital projects.
4 percent
— The statutory debt cap limit on state personal income for debt issued after April 1, 2000.
$19,552
— The average per-pupil spending in New York in school year 2012, which was the highest of any state and 84 percent above the national average.
$174 billion
— The total capital needs identified in the 2013 statewide capital plan for 48 state agencies and authorities.
$89 billion
— The estimated state and local infrastructure funding shortfall over the next 20 years, according to a December 2012 State Comptroller report.
$126 million
— The estimated debt service on the bonds in fiscal year 2016-17.
New York State faces significant fiscal pressure as school aid and Medicaid spending grow at rates exceeding the self-imposed 2 percent budget cap, often requiring accounting maneuvers to defer costs. Achieving long-term fiscal stability requires reforming reimbursement formulas for transportation and capital construction while better targeting school aid resources to the neediest districts.
Recommendations related to State School Aid
Baseline reductions in school aid could be achieved if resources were better targeted to the neediest districts.
Overly rich reimbursement formulas for functions such as transportation and capital construction should be reformed to achieve baseline reductions in school aid.
To make cuts in school aid, either the school aid “tails” or prior year commitments will have to be broken.
The new school aid agreed to in the current year budget will need to be below the school aid cap to make cuts in school aid.
Key Data
42%
— Portion of the state operating fund budget comprised of Medicaid and school aid.
4%
— Rate at which school aid is supposed to grow next year under a cap tied to the annual increase in New York personal income.
5%
— Rate at which school aid is supposed to grow in the two years following next year under a cap tied to the annual increase in New York personal income.
5.3%
— School aid increase on a school year basis financed by a 1.5 percent increase in fiscal year 2014 and a 6.0 percent increase in fiscal year 2015.
6.1%
— Actual rise in school aid in fiscal year 2015.
7.5%
— Actual rise in school aid in fiscal year 2016.
The fiscal year 2015 New York State budget increased school aid by $1.1 billion, surpassing the statutory cap linked to personal income growth and reaching a total of $21.8 billion. A significant portion of these funds is directed through Gap Elimination Adjustment restorations and unallocated grants that fail to prioritize the neediest school districts.
Key Data
$1.1 billion
— The enacted budget increased formula school aid by <b>$1.1 billion</b> for the 2014-15 school year.
$21.8 billion
— Total school aid for the 2014-15 school year will reach <b>$21.8 billion</b>, surpassing the previous peak.
$429 million
— The enacted budget includes <b>$429 million</b> in unallocated aid to be distributed later, including funds for universal prekindergarten.
3.1 percent
— The enacted budget increase was well above the <b>3.1 percent</b> statutory cap linked to personal income growth.
$602 million
— <b>$602 million</b> of the aid increase was delivered through Gap Elimination Adjustment restorations that do not adequately reflect student need.
$1.6 billion
— When including unallocated aid, the total increase in school aid is <b>$1.6 billion</b>, or 7.5 percent.
The state's preschool special education system faces rising costs and inefficiencies, with total expenditures reaching $1.4 billion in 2011-12 and SEIT costs increasing by 293 percent statewide over the previous decade. To address these issues, the state should implement regional rate setting, authorize New York City to negotiate provider rates, and restrict reimbursement to services actually delivered.
Recommendations related to State School Aid
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 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.
The full proposal made by the Governor regarding preschool special education reforms should be included in the adopted budget.
Key Data
$1.4 billion
— Total costs for preschool special education in 2011-12.
$244.1 million
— Statewide costs for SEIT services in 2011-12.
435 percent
— Increase in SEIT costs in New York City from 2000-01 to 2011-12.
83,038
— Number of children receiving preschool special education services in 2011-12.
19,836
— Number of children receiving more than one type of service in 2011-12.
New York State's proposed 2014-15 budget increases education aid to $21.9 billion, yet the current distribution formulas are flawed because they favor wealthier districts and fail to account for recent enrollment shifts. State leaders should reform these mechanisms to prioritize districts with the neediest students and the least local capacity to pay.
Recommendations related to State School Aid
State leaders should adjust the distribution to give more to the districts with the neediest students and least ability to pay on their own.
The GEA restoration approach should be abandoned.
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
$21.9 billion
— Proposed education aid for fiscal year 2014-15.
$807 million
— Proposed increase in education aid from school year 2013-14.
3.8 percent
— Percentage increase in education aid from school year 2013-14.
$204 million
— Portion of the proposed increase allocated for special initiatives not distributed by formula.
$100 million
— Funding allocated for expanded prekindergarten programs.
$2.6 billion
— Total Gap Elimination Adjustment (GEA) in school year 2010-11.
Governor Cuomo’s 2014-15 Executive Budget proposes increasing total education aid by $807 million, or 3.8 percent, to reach $21.9 billion. While the proposal includes funding for universal prekindergarten and performance grants, the majority of the increase is distributed through existing formulas, with a focus on reducing the Gap Elimination Adjustment.
Recommendations related to State School Aid
If the adopted budget is to limit growth in state operating funds to 2 percent as the Governor intends, then continued fiscal discipline for school districts will be required.
Key Data
$21.9 billion
— Total proposed education aid for the 2014-15 school year.
$807 million
— The proposed increase in total education aid from the 2013-14 school year.
$323 million
— The increase in formula aid generated by a reduction in the Gap Elimination Adjustment.
$4.6 billion
— The amount allocated for transportation and building aid, comprising 21 percent of total proposed aid.
$385 million
— The amount of funding held flat for existing universal Pre-K grants.
$223 million
— The amount of funding held flat for high tax aid designed to benefit affluent districts.
New York State's ability to generate a $2 billion surplus through a 2 percent spending growth cap is complicated by the fact that Medicaid and school aid are statutorily capped at higher growth rates. Because these two programs account for 40 percent of State Operating Funds, achieving the spending goal requires significant, difficult reductions in all other areas of state operations.
Key Data
$20.5 billion to $23.6 billion
— Projected increase in school aid over the financial plan period.
4.9 percent
— Average annual growth rate of school aid, which is capped at the annual increase in New York’s personal income.
$36.7 billion
— Combined total of Medicaid and school aid spending within State Operating Funds.
40 percent
— Portion of total State Operating Funds spending comprised by Medicaid and school aid.
Expanding universal prekindergarten to all three- and four-year-olds in New York would require significant new funding, potentially adding up to $4 billion to the state's $51 billion education budget. Policymakers should prioritize high-quality, intensive programs for disadvantaged children rather than pursuing a universal model that risks underfunding services and imposing heavy tax burdens.
Recommendations related to State School Aid
New York’s leaders should review the history of such efforts and take stock of some key realities before raising public expectations for universal prekindergarten.
Policymakers should avoid underfunding services for those students who could benefit most for the sake of achieving universality, as this is not good public policy.
The state should prioritize investments in high quality pre-k that deliver the best long-term returns when they are made in intensive, high-quality programs for disadvantaged children.
Key Data
$1.4 billion
— The estimated added cost of providing an Abbott-style program for all four-year-olds.
$3.0 billion
— The estimated added cost of providing an Abbott-style program for all three- and four-year-olds.
$2.2 billion
— Cumulative reductions in K-12 education aid from peak to trough during the Great Recession.
$385 million
— The amount allocated for Universal Prekindergarten (UPK) programs in 2012-13.
$80.60
— The local tax burden per $1,000 of personal income in New York, which is 72 percent higher than the national average.
$12,846
— The average cost to the State per pupil for Abbott preschool programs in 2011-12.
New York's preschool special education system faces significant challenges with fragmented delivery, lack of cost containment, and inconsistent rate setting, leading to a 73 percent increase in expenditures over a decade. Legislative action is needed to improve oversight, mandate audits for all providers, and address conflicts of interest to ensure cost-effective service delivery.
Recommendations related to State School Aid
The state should approve A7302-A/S5568-A to improve the oversight of preschool special education program providers.
Every provider should be audited at least once by the State Comptroller by March 31, 2018.
Executive Directors of providers must be fully engaged and qualified for their positions.
School districts should require Committee on Preschool Special Education (CPSE) consent in writing whenever the same program provider conducts the evaluation and provides services.
The State Education Department should complete a study of alternative reimbursement methodologies and monitoring protocols to identify further reforms.
Key Data
$792 million to $1.37 billion
— Growth in expenditures for preschool special education services from school year 2001-02 to 2011-12.
27 percent
— Increase in the number of children receiving preschool special education services from 60,536 to 77,096 between 2001-02 and 2011-12.
91 percent
— Increase in service intensity, measured by the number of preschoolers receiving more than one authorized service, over the same decade.
59.5 percent
— Portion of preschool special education costs for which the State provides reimbursement to counties.
$12 to $38 per hour
— Range of rates for an hour of Special Education Itinerant Teacher (SEIT) services in the Western New York region in 2012.
$23 to $58 per hour
— Range of rates for an hour of Special Education Itinerant Teacher (SEIT) services in Long Island in 2012.
New York's public school spending reached $19,076 per pupil in fiscal year 2011, the highest in the nation and 81% above the U.S. average. This high spending is driven primarily by instructional salaries and fringe benefits, which significantly exceed national averages and vary by region across the state.
Key Data
$19,076
— Per pupil spending in New York in fiscal year 2011.
81%
— Amount by which New York's per pupil spending exceeded the U.S. average.
$8,196
— Average per pupil spending on instructional salaries in New York.
$3,962
— Per pupil spending on fringe benefits for instructional employees in New York.
$21,593
— Average per pupil total spending in the Long Island region.
$19,770
— Average per pupil spending in New York City.
The fiscal year 2014 budget increases annual commitments by $1.8 billion, driven largely by school aid growth that exceeds the established 3% cap tied to personal income. This spending is spread broadly across districts regardless of need and relies on risky revenue projections and one-time accounting shifts to cover future deficits.
Recommendations related to State School Aid
The state should adhere to the school aid growth cap of 3% tied to personal income growth rather than exceeding it.
School aid increases should be targeted based on district need or local wealth rather than spread widely.
The state should halt the expansion of competitive grant programs until identified problems from their first year are resolved.
Key Data
5.3%
— School aid increase from school year 2012-13 to 2013-14.
3%
— Previous school aid growth cap tied to personal income growth.
$1.8 billion
— Added annual commitments by the final year of the financial plan.
$6.0 billion
— Projected budget gap for fiscal year 2017 without new ways to pay.
$410 million
— Estimated annual cost of personal income tax rebates for families earning between $40,000 and $300,000.
$1.75 billion
— Cash infusion provided by a shift in the accounting method for financing workers’ compensation.
New York State's 2013-14 budget increased school aid by $1.1 billion, or 5.3%, exceeding the established cap tied to personal income growth. This distribution of funds was poorly targeted, providing increases to wealthy districts rather than focusing resources exclusively on the highest-need communities.
Recommendations related to State School Aid
New York State needs to ensure that school aid allocations are more disciplined next year to improve its fiscal footing.
The state should prioritize highly targeted, substantial increases for the less affluent districts to meet pressing needs without supersizing 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.
$14,511
— Formula aid per student for the highest need-lowest wealth districts in school year 2013-14.
5.3%
— The total percentage increase in school aid for school year 2013-14.
$937 million
— The increase in formula-based aid over the prior year.
New York State's 2014 school year budget allocates $20.8 billion in formula-based aid, representing a $937 million increase over the previous year. While some funding is directed toward needier districts, the distribution is criticized for including formula changes and grants that benefit wealthy districts regardless of actual need.
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.
$223 million
— Final amount allocated to High Tax Aid after a 9% increase.
$100,000
— Minimum increase provided to all school districts regardless of wealth or need.
$11 million
— Amount added in specific appropriations for over 100 school districts outside of formula-based aid.
The proposed New York State budget for fiscal year 2013-2014 includes a $21.1 billion allocation for school aid, yet a significant portion of this increase bypasses need-based formulas. Reforms are necessary to eliminate "hold harmless" provisions that benefit wealthy districts and to reallocate competitive grant funding toward basic foundation aid.
Recommendations related to State School Aid
The "fiscal stabilization" fund should be targeted and used only as a one-time resource, lest it create an expectation that unsustainable operating spending will be supported through state aid.
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 also needed.
The competitive grant program should be fine-tuned and monitored before its funding is increased.
Key Data
$21.1 billion
— Proposed total school aid in the Governor's budget for the next school year.
$888 million
— Increase in school aid 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.
$50 million
— Total pool for competitive grant programs for school year 2012-13.
$17 million
— Amount awarded to 36 of the State’s 696 districts from the competitive grant pool for school year 2012-13.
New York's reliance on competitive grants for school aid has shown limited effectiveness, with few districts applying or receiving funds, and the proposed expansion of these programs is unlikely to yield better results. Instead of competitive grants, the state should prioritize distributing school aid through formulas that account for student need and district ability to pay, while funding specific initiatives categorically.
Recommendations related to State School Aid
The state should prioritize distributing school aid through formulas that measure student need and district ability to pay rather than relying on competitive grants.
If specific education initiatives 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 proposed school aid package for the fiscal year 2013-14.
$175 million
— The total cost of proposed competitive grant programs.
$10.2 million
— The total amount of performance improvement grants awarded from the $25 million available.
$17 million
— The total amount of competitive grant funding awarded to date from a $50 million pool.
Governor Cuomo's 2013-14 executive budget proposes increasing total school aid by $889 million to $21.1 billion, with the majority of funds distributed through formula and categorical aid. The proposal also includes $203 million for a fiscal stabilization fund and $75 million for new competitive grant programs targeting initiatives like pre-kindergarten and extended learning time.
Key Data
$889 million
— The total increase in school aid proposed for New York's 676 school districts.
$21.1 billion
— The total amount of school aid proposed for the 2013-14 school year.
$611 million
— The portion of the school aid increase allocated through formula and categorical aids.
$203 million
— The amount allocated for a one-time fiscal stabilization fund.
$75 million
— The amount allocated for new competitive grant programs.
New York's education aid, currently the largest item in the state budget at $20.1 billion, suffers from significant distribution inequities caused by outdated "hold harmless" provisions and flawed expense-based formulas. Furthermore, school districts are burdened by 227 state-imposed special education mandates that contribute to a staffing ratio nearly double the national average.
Recommendations related to State School Aid
State leaders should redesign the school aid formulas to eliminate inequities and reduce reliance on flawed methods like "hold harmless" provisions and expense-based aid.
The Governor and Legislature should act to reform state aid formulas even if the New NY Education Reform Commission is silent on the issue.
The state should provide relief to school districts from overly burdensome special education mandates that contribute to excessive staffing levels.
Key Data
$20.1 billion
— The amount of education aid in the current state budget, representing the largest item.
$1.5 billion
— The projected growth in education aid over the next two years based on an agreement adopted with the last state budget.
227
— The 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 special education.
10.1
— The U.S. average student-to-staff ratio in special education.
New York's current school aid formulas are inequitable, relying on outdated 'hold harmless' provisions and flawed distribution methods that prioritize political constituencies over actual student needs. To improve fiscal stability and educational outcomes, state leaders should redesign these formulas and provide relief from the 227 state-imposed special education mandates that contribute to a system with a 5.5 student-to-staff ratio.
Recommendations related to State School Aid
State leaders should redesign the school aid formulas instead of putting more money in the hands of school districts through the same seriously flawed methods.
The Governor and Legislature should act this year to reform the state aid formulas if the New NY Education Reform Commission is silent on the question.
Governor Cuomo should press for adoption of the pending proposals for mandate relief in the fiscal year 2013-14 budget to help school districts.
Key Data
$20.1 billion
— Total education aid in the current state budget.
$1.5 billion
— Projected growth in education aid over the next two years.
227
— Number of mandates New York imposes on school districts beyond those required by federal law.
5.5
— Student-to-staff ratio in New York special education.
10.1
— U.S. average student-to-staff ratio in special education.
New York's pupil transportation costs are significantly higher than the national average, with the state spending $1,100 per pupil compared to the $459 national average. To address these high costs and improve efficiency, the state should simplify its reimbursement formulas and reduce the overall reimbursement rate, which would allow funds to be redirected toward more targeted foundation aid.
Recommendations related to State School Aid
New York should simplify its current pupil transportation aid formulas to improve targeting by applying one formula to all districts, based upon or equal to the foundation aid ratio.
The state should lower the overall average transportation aid reimbursement rate to create a greater incentive for school districts to reduce costs.
New York should eliminate the minimum reimbursement rate for the wealthiest school districts to ensure aid is more equitably distributed.
Key Data
$1,100
— average amount spent per pupil on transportation in New York in 2010.
$459
— average amount spent per pupil on transportation in the United States.
$2.97 billion
— annual cost of pupil transportation in New York State.
$270 million
— estimated state funds that could be made available for redirection to foundation aid if the statewide average transportation aid reimbursement rate were reduced from 54 percent to 45 percent.
140%
— amount by which New York's per-pupil transportation spending exceeds the U.S. average.
New York's per pupil education spending of $18,825 is significantly higher than the national average, with pupil transportation costs specifically reaching $1,100 per student in 2010. These high costs are exacerbated by poorly designed state aid formulas that provide excessive reimbursement rates to many districts and fail to incentivize cost containment.
Key Data
$18,825
— Annual per pupil spending in New York, which is significantly higher than the national average of $10,292.
$1,100
— Average per pupil transportation spending in New York school districts in 2010, which is 140 percent above the U.S. average of $459.
90%
— Maximum reimbursement rate for transportation aid that nearly one-third of New York school districts receive, which erodes the incentive to achieve greater efficiencies.
New York's public education system spends significantly more per student than the national average, yet student achievement remains below top-tier states. To improve efficiency, the state should reform aid formulas, cap employer contributions for health insurance, and eliminate burdensome special education mandates.
Recommendations related to State School Aid
State leaders should overhaul state aid formulas so that funding 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 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
$60 billion
— The total size of New York's public education enterprise.
$18,825
— The annual per pupil spending in New York, which is the second highest among the 50 states.
$11.4 billion
— The total statewide special education spending in the decade ending in 2010.
$500 million
— The amount of annual savings that could be achieved if school districts changed health insurance premium-sharing arrangements to match those of the State of New York.
227
— The number of mandates New York State imposes on schools beyond those required by federal law.
$40,000
— The amount of instructional spending per pupil on students classified for special education services in some districts.
New York State's special education spending has grown at an average rate of 7.5% annually over the last decade, placing significant financial strain on local school districts already operating under property tax caps. The proposed bill A.10722A/S.7722A would exacerbate these fiscal pressures by requiring districts to fund private school tuition even when adequate public programs exist, prompting calls for the Governor to veto the legislation and instead provide relief from existing state mandates.
Recommendations related to State School Aid
The Governor should veto A.10722A/S.7722A, which would allow for consideration of a child’s “home environment and family background” in special education placement determinations.
School districts need relief from the more than 200 special education mandates currently imposed by the state, rather than additional requirements that add to their costs.
Key Data
7.5%
— Average annual growth rate of special education spending in New York State over the last decade.
200
— Number of special education mandates currently imposed on school districts by the state.
New York spends significantly more on public education than the national average, yet student performance remains average, necessitating a shift from simply increasing spending to spending more wisely. To improve efficiency, the state should overhaul aid formulas to eliminate 'hold harmless' provisions, reallocate health insurance costs, and reduce burdensome special education mandates.
Recommendations related to State School Aid
State school aid formulas should be overhauled to better reflect local ability to pay, student need, and regional cost differences.
School districts should bargain more successfully with teachers’ unions to give employees a greater stake in cost containment through the sharing of health insurance premium costs.
Special education spending should be lowered by eliminating overly burdensome procedural and staffing mandates.
Districts that are relatively similarly situated across variables like student need and local ability to pay should get the same amount of State aid.
Current categories of aid that are reimbursement driven should be stripped of hold harmless provisions and other loopholes that allow districts to pick the most favorable of different formulas to calculate their aid.
Key Data
$17,746
— New York's annual per pupil spending on public education.
$10,590
— The U.S. average annual per pupil spending on public education.
$4.7 billion
— Amount spent by New York school districts on health insurance for employees and retirees in 2009.
$500 million
— Potential annual savings if school districts changed health insurance premium sharing arrangements to match the State of New York.
$11.4 billion
— Total state-wide special education spending.
73.5 percent
— New York's national graduation rate.
New York State provides $20.4 billion in annual school aid, yet distribution varies significantly due to historical 'hold harmless' provisions rather than just student need or local wealth. Consolidating small districts and adjusting aid formulas to reflect current enrollment levels could reduce inefficiencies and generate significant savings.
Recommendations related to State School Aid
New York State should consolidate school districts with enrollment below 900 to achieve 7% to 20% savings through economies of scale.
Districts with falling enrollment should close schools to reduce expenses to address inefficiencies caused by poorly calibrated State aid.
Key Data
$20.4 billion
— Amount of aid school districts in New York are expecting to receive from New York State in school year 2012-13.
40%
— Portion of total school district budgets that New York State aid comprises on average.
7% to 20%
— Potential savings from consolidating school districts with enrollment below 900.
$5,589
— Aid per student received by the Marlboro school district.
$10,672
— Aid per student received by the Greenwood school district.
554
— Number of pupils by which enrollment has dropped in Albion since 2006.
New York's state budget for the upcoming year increases funding for schools through general aid formulas by $200 million, while reducing the competitive grant pool to $125 million. This adjustment helps ensure that state school aid is better targeted to address the inequitable distribution of previous funding cuts across districts with varying levels of wealth and need.
Recommendations related to State School Aid
Increased state school aid needs to be highly targeted to compensate for the inequitable distribution of the recent cuts.
Key Data
$200 million
— The amount by which the final budget increased funding allocated by general aid formulas for schools.
$125 million
— The reduced size of the competitive school aid grant pool to be disbursed over two years.
$250 million
— The amount the Governor originally proposed for competitive school aid grants, which was considered too high.
New York's proposed $805 million increase in school aid is poorly targeted, with the wealthiest districts set to receive a 9.0% increase compared to just 2.6% for the neediest districts. To ensure funds reach those who need them most, the state should prioritize distributing aid through the foundation aid formula while limiting categorical aid and competitive grants.
Recommendations related to State School Aid
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 to prevent untargeted distribution.
The competitive grant program should be much smaller, if not eliminated, as it creates barriers for struggling districts.
All formulas for distributing school aid should be reexamined in coming years to ensure they align with current fiscal realities.
A full-on effort to retool the school aid formulas should be launched to remove excesses and inefficiencies built during flush years.
Key Data
$805 million
— The total state aid increase proposed by the Governor for school districts.
$2.2 billion
— The amount school aid was cut from its $21.7 billion peak in school year 2009-10 to help close budget gaps.
9.0 percent
— The average increase in aid the least needy districts would receive under the Governor's proposal.
2.6 percent
— The average increase in aid the neediest 10 percent of districts would receive under the Governor's proposal.
$290 million
— The portion of the Governor's education aid proposal allocated to an increase in foundation aid.
$250 million
— The portion of the Governor's education aid proposal allocated for new competitive performance grants.
New York currently directs hundreds of millions of dollars in state aid to wealthy school districts that possess the capacity to fund their own operations. The state should revise the distribution formulas for school aid to better address the significant disparities in wealth and funding capacity among local districts.
Recommendations related to State School Aid
The state should rejigger school-aid programs to run more efficiently.
The basic formulas by which school aid is distributed should be reopened to address better the great disparities in local districts’ wealth and capacities to fund their schools.
New York State faces a projected $3.2 billion budget gap, with the Governor committing to a 4 percent increase in both Medicaid and school aid spending. To address this, the state should reform the distribution formulas for school aid to reduce funding for wealthy districts and implement structural changes to slow cost growth.
Recommendations related to State School Aid
The State should reopen the basic formulas by which school aid is distributed to better address the great disparities in local districts’ wealth and capacities to fund their schools.
The State should eliminate school aid to wealthy districts that could finance high levels of spending without state assistance.
The State should close the remaining budget gap with structural reform measures that slow down the fastest cost drivers, including school aid.
Key Data
4 percent
— The committed increase for both Medicaid and school aid spending.
New York State imposes over 200 special education mandates beyond federal requirements, driving unsustainable spending growth that necessitates urgent regulatory reform. Adopting federal standards for student evaluations and granting school committees flexibility in determining necessary services would control costs without compromising educational quality.
Recommendations related to State School Aid
The Regents should approve the proposed changes in November and resist the temptation to weaken them or postpone them once again.
The legislature should pass the necessary changes to State law to support mandate relief.
The federal standard for initial student evaluations should be adopted by repealing the State law that requires that each evaluation include a physical exam, psychological evaluation, social history, classroom observation and a functional behavior assessment when behavior is a concern.
Multidisciplinary school committees that govern special education services should be allowed to determine what evaluations to administer based on each student's needs.
Key Data
$10,874
— Average cost of instruction per general education student in New York State in 2008-09.
$26,551
— Average cost of instruction per special education student in New York State in 2008-09.
7.5 percent
— Average annual rate of increase for special education instructional spending over the past decade.
20 percent
— Amount by which special education spending growth exceeded general education spending growth.
5.5
— Student-to-staff ratio in New York special education systems.
10.1
— U.S. average student-to-staff ratio for special education.
New York State's special education system is one of the most intensively staffed in the nation, with costs rising significantly faster than general education spending. To manage these unsustainable expenses amidst state aid cuts and property tax caps, the Board of Regents should approve proposed mandate relief measures that align state requirements with federal standards.
Recommendations related to State School Aid
The Board of Regents should approve the proposal to conform the membership of the Committee on Special Education (CSE) to federal IEP team membership by repealing state-imposed additional requirements.
The Board of Regents should align the Committee on Preschool Education (CPSE) membership with the federal IEP team by repealing the requirement for an additional parent member.
The State should adopt the federal standard for initial evaluations by repealing the requirement that each evaluation include a physical examination, psychological evaluation, social history, and other specific assessments.
The Legislature should repeal the requirement in law that Boards of Education have plans and policies for appropriate declassification of students with disabilities, as regular consideration is already given at annual reviews.
The State should repeal the requirement that the Commissioner of Education approve early intervention services by preschool providers to reduce administrative overhead.
Key Data
$10,874
— Average cost of instruction per general education student in New York State in 2008-09.
$26,551
— Average cost of instruction per special education student in New York State in 2008-09.
7.5 percent
— Average annual rate of instructional spending growth for special education over the past decade.
5.5
— Number of students per staff person in New York's special education system.
10.1
— U.S. average number of students per staff person in special education.
$1.3 billion
— Amount state aid for school year 2011-12 was cut from the previous year's level.
New York's public higher education system requires greater autonomy to set tuition rates and manage assets, as current legislative control leads to erratic tuition hikes and the diversion of revenue from educational quality. To maintain affordability while implementing these reforms, the state must reverse recent cuts to the Tuition Assistance Program and address the relatively high costs of community colleges.
Recommendations related to State School Aid
All public higher education institutions in New York should be given the same authority regarding tuition policies and control over physical assets as proposed for SUNY at Buffalo.
The state should allow the universities to raise tuition without legislative approval to ensure more regular, modest, and predictable tuition hikes.
It is desirable to allow SUNY and CUNY to set differential tuition among campuses and programs to recognize variation in costs and maximize revenue.
State leaders should reverse the trend of reducing TAP funding and tightening eligibility standards to ensure a more rational system of funding public higher education.
Key Data
$40 million
— CUNY tuition revenue stemming from a 5 percent tuition increase that the Legislature refused to appropriate.
$5,790
— Average tuition and fees for resident undergraduate students charged by New York's four-year public colleges and universities in 2010-11.
$7,605
— National average tuition and fees for resident undergraduate students in 2010-11.
$12,870
— SUNY's out-of-state undergraduate tuition in 2009-10.
$1,252
— Amount by which New York's in-state tuition and fees at community colleges in 2010-11 exceeded the national average.
$5,000 to $4,000
— Reduction in TAP funding for students in 2-year colleges enacted in the last two budgets.
New York continues to be a generous spender on Medicaid and school aid, with spending levels 60% higher than the national average. The state budget includes significant cuts to these areas, necessitating a focus on removing unfunded mandates and ensuring property tax caps do not harm communities lacking sufficient state aid.
Recommendations related to State School Aid
Unfunded mandates imposed by the state on localities and school districts, particularly unnecessary special education requirements, should be removed so they are not forced to raise local taxes.
A property tax cap will need to be designed carefully to avoid hardship for needy communities that do not receive sufficient state aid to adequately fund services.
Key Data
60%
— The amount by which New York's spending on Medicaid and school aid exceeds the national average.
The 2011 state budget reduced school aid in a way that disproportionately favored wealthier districts, with the top two deciles receiving over 2 percent of their aid back compared to less than 1 percent for the poorest deciles. While $608 million in federal aid helped mitigate the severity of these cuts, the state needs to reexamine its distribution formulas to ensure future allocations are sustainable and equitable.
Recommendations related to State School Aid
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.
$67
— Average restoration per pupil statewide in the enacted budget.
2.3 percent
— Percentage of State aid returned to the wealthiest decile of school districts.
0.8 percent
— Percentage of State aid restored to the poorest decile of school districts.
$608 Million
— Federal aid amount that lowered the starting point for school aid cuts.
6.3 percent
— Average school aid cuts if all federal funds were spent in the 2010-11 school year.
New York's proposed school aid cuts disproportionately impact poorer districts while shielding wealthier ones due to flawed distribution formulas. By removing specific provisions that limit reductions for wealthy and high-tax districts, the state could protect 380 low-wealth districts from aid cuts entirely.
Recommendations related to State School Aid
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 amount of state school aid, which comprises one-quarter of the State operating budget.
$1.7 billion
— The amount Governor Andrew Cuomo proposed reducing school aid by to help close the state budget gap.
$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 school districts.
$548,789
— The local tax base per pupil for the poorest 10 percent of school districts.
380
— The number of low-wealth districts that would not have a cut in State aid if the proposed reduction provisions were removed.
Governor Cuomo's executive budget proposes closing a $9 billion deficit, which includes $2.9 billion in cuts to state school aid. To manage these reductions and the proposed property tax cap, local governments and school districts must address labor costs, which account for 70% of their budgets, rather than relying on minor administrative changes.
Recommendations related to State School Aid
Localities and school districts should implement changes in pensions and compensation to address the fiscal challenges posed by state aid cuts.
Policymakers should pursue substantive mandate relief rather than small changes like streamlining and computerizing reports to help school districts deal with state aid cuts.
Key Data
$2.9 billion
— Total amount of school aid cuts proposed in the executive budget.
70%
— Portion of local budgets comprised of labor expenses, which localities need to address to manage state aid cuts.
New York state faces a significant budget gap, necessitating a reduction in spending across major areas including school aid, Medicaid, and employee compensation. Specifically, the state currently directs over $650 million in tax dollars to the wealthiest school districts that are capable of funding themselves above the national average per pupil.
Recommendations related to State School Aid
Aid to the wealthiest school districts, which can raise more than the national average per pupil on their own while maintaining relatively low property tax rates, should be eliminated.
Key Data
$650 million
— in state tax dollars currently allocated to the wealthiest school districts that can raise more than the national average per pupil on their own.
The fiscal year 2010-11 budget includes a $1.5 billion reduction in school aid, which is targeted toward wealthier districts to help manage state spending. Despite these cuts, school aid is projected to grow by over $7 billion in the coming four years, necessitating structural reforms to improve the impact of educational investments.
Recommendations related to State School Aid
The State must address school aid, which comprises nearly one-third of the State's own-source spending, if spending is to be contained in future years.
School district and State leaders must improve the impact of the State's added investments in education to manage with reduced aid and constrained local funds.
Key Data
$1.5 billion
— The amount of the school aid cut resulting from the Governor's vetoes in the fiscal year 2010-11 budget.
$7 billion
— The amount school aid is projected to increase over the next four years, even after the current year's cuts.
New York's public higher education system faces funding challenges due to a reliance on erratic tuition increases linked to the state budget process. Reforms are needed to grant universities control over tuition revenue and rates, while simultaneously protecting student access by rejecting proposed financial aid cuts and expanding the Tuition Assistance Program.
Recommendations related to State School Aid
The state should remove tuition revenue from the legislative appropriation process to allow SUNY and CUNY to control their own revenue.
The state should transfer the authority to set tuition rates from the Legislature to the colleges' presidents and boards of trustees.
Future tuition increases should be subject to an annual cap of two-and-one-half times the five-year rolling average of the Higher Education Price Index to ensure predictability.
The state should allow SUNY and CUNY to set differential tuition among campuses and programs to reflect varying operational costs and market demand.
The Legislature should reject the proposed cuts in financial aid to ensure that higher tuition rates do not reduce accessibility for low-income students.
The state should expand the Tuition Assistance Program (TAP), including lifting the grant ceiling, to mitigate the potential impact of higher and differential tuition on affordability.
Key Data
$13.5 billion
— Total funding size of the SUNY and CUNY system.
$2.7 billion
— Annual tuition collected by CUNY and SUNY combined.
$5,761
— Average tuition and fees for resident undergraduate students at New York's four-year public colleges in 2009-10.
$7,020
— National average tuition and fees for resident undergraduate students at four-year public colleges in 2009-10.
$827 million
— TAP grants awarded to eligible undergraduates during the 2007-08 academic year.
$975
— Average state need-based undergraduate aid awarded per full-time equivalent student.
New York spends excessively on educating students in the wealthiest districts, with the top 10 percent of districts spending $28,754 per pupil during the 2007-2008 school year. The state should redirect the $3,809 per pupil currently provided to these affluent districts to better serve lower-income students or achieve necessary budget savings.
Recommendations related to State School Aid
The state should stop providing aid to wealthy districts, as that money could be saved or better spent elsewhere.
New York should continue helping lower-income students.
Key Data
$28,754
— per pupil spending in the richest 10 percent of New York school districts during the 2007-2008 school year
$3,809
— per pupil in state aid provided to the richest 10 percent of New York school districts
New York faces a $1.1 billion reduction in school aid for the 2010-11 fiscal year, necessitating a strategic approach that prioritizes funding for the neediest districts over wealthier ones. By further targeting reductions and potentially halving aid to the wealthiest school districts, the state could restore funding to the poorest deciles and better align spending with actual educational needs.
Recommendations related to State School Aid
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 to the six poorest deciles.
Limited available 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 the challenging revenue outlook.
Key Data
$1.1 billion
— The proposed reduction in school aid for the 2010-11 fiscal year.
$20.5 billion
— The total amount of school aid proposed for local school districts in the coming year.
$7.5 billion
— The estimated budget gap for the coming year.
$28,754
— The average per pupil expenditure in the wealthiest 10 percent of school districts in 2006-07.
$16,463
— The average per pupil expenditure in the poorest 10 percent of school districts in 2006-07.
$900 million
— The total state aid received by the 136 wealthiest school districts.
New York's 2010-11 budget proposal seeks to address a $6.7 billion deficit by curbing spending growth, including reductions in school aid and Medicaid. The plan proposes $19.9 billion in school aid, which represents a per-pupil reduction of approximately $160 while still remaining higher than spending levels from 2006-07 and 2007-08.
Recommendations related to State School Aid
The Legislature should seize the opportunity to move the State's finances toward structural balance by embracing the Governor's proposal for real and recurring spending reductions.
Key Data
$1.1 billion
— Projected increase in State operating funds dedicated to school aid for the upcoming year without legislative action.
$19.9 billion
— Total amount of school aid proposed by the Governor for the 2010-11 fiscal year.
$1 billion
— Amount by which the proposed school aid exceeds the total spent in the 2007-08 fiscal year.
$2.6 billion
— Amount by which the proposed school aid exceeds the total spent in the 2006-07 fiscal year.
$160
— Estimated reduction in school aid on a per-pupil basis under the Governor's proposal.
The revised deficit reduction plan replaces targeted school aid cuts based on district wealth with a flat 1.58 percent reduction, disproportionately benefiting the wealthiest school districts. This shift reduces the cuts for the top ten wealthiest districts by 82 percent, while the poorest ten districts see their cuts reduced by only 27 percent.
Key Data
1.58 percent
— The flat rate of cuts applied to school district aid allocations under the new deficit reduction plan.
82 percent
— The reduction in planned cuts for the wealthiest 10 school districts under the new plan compared to the original proposal.
27 percent
— The reduction in planned cuts for the poorest 10 school districts under the new plan compared to the original proposal.
$14.6 million
— The total financial benefit for the wealthiest decile of school districts under the new plan compared to the original proposal.
$11.2 million
— The total financial benefit for the poorest decile of school districts under the new plan compared to the original proposal.
New York faces a potential $3 billion budget gap, necessitating immediate spending reforms across several sectors. This includes reforming the $600 million in school aid currently directed to the state's wealthiest school districts, which is deemed unaffordable.
Recommendations related to State School Aid
New York should reform the $600 million in school aid that it continues to send to the wealthiest school districts in the state.
Key Data
$600 million
— Amount of school aid New York continues to send to the wealthiest school districts in the state.
New York State's school aid programs, including the School Tax Relief (STAR) program, are inequitable because they provide less funding to poorer districts while wealthier communities receive significantly more aid per pupil. Reforming these programs to better target resources toward districts with limited wealth is essential to reducing the state's high local tax burden and improving educational equity.
Recommendations related to State School Aid
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Key Data
51%
— The portion of non-federal revenue New York State provides to its local school districts.
54%
— The national average share of non-federal revenue provided by states to local school districts.
$3.4 billion
— The annual appropriations for the School Tax Relief (STAR) program in the current fiscal year.
$19,149
— The amount of local revenue per pupil that Great Neck, a wealthy community, is able to raise.
28%
— The amount more per pupil that the wealthiest districts receive in STAR aid compared to the poorest districts.
New York should restore $1.2 billion in proposed school aid cuts to the neediest districts while phasing out unnecessary payments to the wealthiest districts. Aid distribution should be based on need and ability to pay rather than maintaining outdated 'high tax' and 'hold harmless' increases.
Recommendations related to State School Aid
The state should restore $1.2 billion in proposed school aid cuts to the neediest districts.
New York should phase out unnecessary payments to the wealthiest school districts, as aid should be distributed based on need and ability to pay.
The state should end the 'high tax' and 'hold harmless' aid increases added two years ago to make reformed aid formulas more palatable to the wealthiest districts.
Key Data
$1.2 billion
— Amount of proposed school aid cuts that should be restored to the neediest districts.
$1.7 billion
— Total amount of school aid cuts proposed in the Governor's budget.
New York should enact the Governor's proposed reductions in school aid, specifically targeting the wealthiest districts to ensure equity. Eliminating high tax aid and hold harmless provisions would generate significant savings that could be redirected to protect the neediest school districts.
Recommendations related to State School Aid
The Governor proposed reductions in school aid based on need and ability to pay, targeting the greatest percentage cuts to the wealthiest districts; these cuts should be enacted.
Two measures in the new aid formulas that work against the principle of allocating school aid based on need, high tax aid and hold harmless provisions, should be eliminated.
Some of these savings could 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 the hold harmless provisions from the past two fiscal years.
Eliminating state aid to the wealthiest school districts would generate $389 million in annual savings for the state. This measure is part of a broader set of proposals aimed at reducing wasteful spending and improving fiscal discipline without compromising public services.
Recommendations related to State School Aid
The state should eliminate state aid to the wealthiest school districts to achieve significant annual savings.
Key Data
$389 million
— Annual savings achieved by eliminating state aid to the wealthiest school districts.
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…
New York's reliance on local property taxes to fund schools creates significant inequities, which the state has attempted to address through the School Tax Relief (STAR) program and a new foundation-based aid formula. However, these programs often favor wealthier districts and fail to fully resolve disparities in per-pupil spending or reduce the overall local tax burden.
Recommendations related to State School Aid
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.
The State should reform the current unnecessarily expensive pension system by converting to a defined contribution rather than a defined benefit system.
The State should implement a full state takeover of Medicaid to shift financing to the State, as wealthier individuals would shoulder a higher share of costs through more progressive state revenues.
The State should consolidate small school districts to reduce operating costs, as the potential savings of consolidation is greatest for smaller districts.
The State should reform the legal framework for collective bargaining to make the dispute resolution process more timely and change the criteria used by arbitrators.
Key Data
$7.6 billion
— Total increase in school aid when the Governor's Four-Year Education Investment Plan is fully phased-in in 2010-11.
$1.8 billion
— The school aid increment for the 2007-08 school year.
42 percent
— The share of total STAR aid received by the three wealthiest counties in New York State in 2005.
20 percent
— The average increase in state aid to school districts per pupil provided by the STAR program.
$149 million
— The cost to the State for a minimum 3 percent aid increase for 304 districts under the Governor's initial 'hold harmless' proposal.
$329 million
— The amount of aid provided to 304 wealthy districts after budget enactment, following the creation of additional formulas.
New York State's current school aid system provides significant funding to the wealthiest districts, which exacerbates spending inequities and fails to prioritize need. Reforming this system by eliminating aid to the top 10 percent of wealthiest districts and enforcing stricter local tax levy requirements could generate substantial budgetary savings.
Recommendations related to State School Aid
The State should remove aid allocations for the 97 districts that are capable of reaching adequate spending per pupil on their own.
The State should eliminate the unnecessary and ineffective aid provided to the 68 wealthiest school districts.
The State should implement a more stringent application of requirements that districts raise revenues at the median tax rate.
Key Data
$334 million
— Potential savings from removing aid for the 97 districts that are capable of reaching adequate spending per pupil on their own.
$229 million
— Total State aid provided to the 68 wealthiest school districts in the 2007-08 enacted budget.
$1,200
— Base grant in State aid per pupil received by the wealthiest 10 percent of districts.
$129,694
— Per pupil property valuation for the poorest 10 percent of school districts.
$3,143,121
— Per pupil property valuation for the wealthiest 10 percent of school districts.
New York State faces a mandate to provide billions in additional school aid, yet it must balance this requirement with its status as the most heavily taxed state in the nation. To fund these improvements without compromising competitiveness, the state should prioritize eliminating inefficiencies, such as reallocating aid from wealthy districts, and explore revenue sources like expanded gambling and a broadened tax base.
Recommendations related to State School Aid
The State should eliminate or reduce aid to wealthy districts with a tax base large enough to generate the full cost of a sound basic education on their own.
New York should eliminate educational inefficiencies, such as consolidating smaller school districts and using teacher time more efficiently, to generate at least $1.2 billion annually.
The State should expand gambling activities to generate an additional $2 billion in revenue.
New York 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.
The State, rather than local school districts, should be the primary source of new funding to increase its contribution for school funding.
New York should increase the State's share of school funding to follow the national trend and alleviate inequities in spending between districts.
Key Data
$4.7 billion
— Operating aid ordered by the New York State Appellate Division of the State Supreme Court for New York City public schools.
$9.2 billion
— Capital improvements ordered by the New York State Appellate Division of the State Supreme Court for New York City public schools.
$10,665
— Average per pupil spending in New York State after adjusting for regional cost differences.
$8,041
— U.S. average per pupil spending on education.
$750 million
— Potential savings from eliminating or reducing state aid to wealthy school districts.
$1.2 billion
— Potential annual savings from eliminating educational inefficiencies in the system.
New York State's school aid programs, including the School Tax Relief (STAR) program, are inequitably structured, with the poorest districts receiving the least aid per pupil while wealthier districts receive significantly more. This system fails to equalize tax burdens, as poorer districts must tax themselves more heavily to raise less revenue than their wealthier counterparts.
Recommendations related to State School Aid
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Key Data
51%
— Percentage of non-federal revenue provided by New York State to its local school districts.
$19,149
— Local revenue raised per pupil in Great Neck, a wealthy community in Nassau County.
$2,272
— Revenue per pupil in Utica, a poorer upstate city, despite a tax burden well above the statewide average.
$3.4 billion
— Annual appropriations for the School Tax Relief (STAR) program in the current fiscal year.
28%
— Amount more per pupil that the wealthiest districts receive in STAR aid compared to the poorest districts.
New York State faces a significant challenge in reforming its school finance system to meet court-mandated requirements for a sound basic education while addressing deep inequities in local wealth and tax burdens. Potential solutions include shifting to full state funding, restructuring tax policies, utilizing non-tax revenue sources like gambling, and implementing luxury taxes on wealthy districts to better equalize per-pupil spending.
Recommendations related to State School Aid
The State should fully fund education at the state level to spread the burden for raising revenues across a wide population group and eliminate disparities among districts.
New York should adopt school aid formulas that more effectively equalize variations in local wealth by applying a uniform local tax rate across districts.
The State should finance the increment required to meet the court mandate at the state level rather than relying on local school districts to bear the responsibility.
Policymakers should free up existing resources to fund schools by cutting spending on other services, such as Medicaid and the prison system.
The State could raise taxes to increase per pupil spending in districts failing to meet the target, though this risks placing New York at a competitive disadvantage.
New York should raise as much of the needed revenue as possible from non-tax sources, such as expanding gambling opportunities.
The State should restructure existing taxes to increase revenue and improve tax policy, such as collecting sales tax on remote and internet sales.
New York should impose a luxury tax on wealthy districts to level the playing field and curb excessive spending in high-wealth areas.
Key Data
$4.7 billion to $5.6 billion
— The range of operating aid for New York City public schools ordered by the court over the next four to five years.
$42 billion
— Total revenues for public schools in New York State during the 2004-05 school year.
$3.2 billion
— The amount committed to the School Tax Relief (STAR) program in school year 2004-05.
$8.4 billion
— The estimated cost of a statewide solution to the CFE-generated mandate.
$158,319
— The average actual valuation of property per pupil among the lowest spending 10 percent of districts in 2002-03.
$1,200,109
— The average actual valuation of property per pupil among the highest spending 10 percent of districts in 2002-03.
New York State's current school aid distribution relies on flawed formulas that fail to provide sufficient resources for a sound basic education, as highlighted by recent court rulings. To address this, the state should redistribute aid away from wealthy districts that do not need it and create a more equitable system that accounts for local tax capacity and student needs.
Recommendations related to State School Aid
The state should redistribute aid that is currently poorly targeted to wealthy districts by eliminating "hold harmless" provisions.
The new school finance system should create equity in local tax effort by taking into account the burden of providing services for large numbers of low-income residents.
Localities' tax capacity should be adjusted for local student needs and local costs of providing education services.
Additional funds for school aid should be raised in a way that addresses the need for maintaining New York’s competitiveness, such as expanding gambling revenues or broadening the sales tax base.
Key Data
$18.4 billion
— Amount New York State currently distributes in school aid through a complicated and flawed set of formulas.
$750 million
— Estimated annual cost to the State of "hold harmless" provisions that keep State aid levels from being adjusted downward.
$8.4 billion
— Estimated increased school aid required in fiscal year 2008-09 to provide a statewide solution to the school finance problem.
$5.6 billion
— Amount the State was ordered to increase aid to New York City schools over 4 years in the Campaign for Fiscal Equity lawsuit.
$2 billion
— Potential revenue from expanding gambling revenues to help fund school aid.
$950 million
— Potential revenue from sales tax base broadening to help fund school aid.
The state faces a mandate to provide a sound basic education to all students, requiring billions in additional annual funding for operating and capital expenses. To meet this need, the state should prioritize internal efficiencies and non-tax revenues like gambling before considering tax increases, while also implementing reforms in school accountability, classroom space management, and teacher compensation.
Recommendations related to State School Aid
The State, rather than local school districts, should be responsible for raising the additional funds needed for a sound basic education.
A new statewide system of accountability for schools should be established.
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.
Financial incentives should be used to overcome shortages in selected teaching job titles.
The managerial discretion of principals should be expanded.
Expanded gambling activities should be used to generate about $2 billion annually for improved education.
Key Data
$2.5 billion
— Minimum annual increase in funding estimated by the Zarb Commission to meet acceptable standards statewide.
$8.6 billion
— High end of the range for combined annual operating and capital expenses required for a sound basic education.
$12 billion
— Savings in capital expenses achievable through redistricting and year-round school schedules.
$1.2 billion
— Annual savings generated from within the school system by making more efficient use of teacher time and consolidating small school districts.
$2 billion
— Annual revenue that could be raised by authorizing new sites for housing video lottery terminals.
$950 million
— Estimated annual yield from broadening the sales tax base to include items currently exempt.
New York State can improve school finance by eliminating misallocated aid to wealthy districts and addressing inefficiencies in teacher time and administrative costs. These reforms could generate significant savings that should be redirected to provide a sound basic education where it is most needed.
Recommendations related to State School Aid
The State should eliminate or redistribute aid that is poorly targeted to wealthy school districts.
A required minimum tax effort would generate additional local tax funds in some districts and further reduce the need for State aid.
The State should reduce combined preparation and administrative periods for junior high and high school teachers from 10 to five per week.
The State should reduce preparation periods for elementary school teachers from five to three per week.
The State should eliminate sabbatical leaves for travel and study.
The State should eliminate subsidized time for union activities.
Penalties or mandates will be required in order to ensure that the savings from school district consolidation are achieved.
The State should set one or more caps on administrative costs and oblige the higher cost districts to bring their costs closer to the statewide average.
Key Data
$750 million
— Amount of state aid currently misallocated to school districts that do not need the help.
$475 million
— Annual savings from correcting inefficiencies in teacher time and school district administration.
$1.5 billion
— Excess state aid received by 450 school districts above what they need to fund median per pupil expenditures.
$350,000,000
— Estimated savings from reallocating teacher time to increase instructional hours.
$126 million
— Total annual savings from eliminating inefficiencies related to small school district consolidation and administrative costs.
$672
— New York State's administrative cost per pupil, which ranks eighth among the 50 states.
New York State must implement a unified, consistent accountability system to ensure that significant increases in education funding are used effectively and transparently. This system should include clear performance goals, value-added assessments of student progress, and balanced incentives that reward success while addressing failures.
Recommendations related to State School Aid
The State should implement a consistent State-wide accountability program that uses a single set of uniform tools consistent with federal guidelines to replace locally-generated systems.
New funds should only be used for purposes consistent with the CFE settlement, with districts required to specify in advance how they will utilize these resources.
Districts should be required to specify performance goals for the year that include qualitative measures like graduation rates, college readiness, and attendance, rather than relying solely on standardized test scores.
Where standardized tests are used for accountability purposes, they should be based on “value-added” methodologies that compare a student's performance to their own prior results rather than comparing students to one another.
Qualitative assessment programs should be implemented as part of the State-wide accountability system to provide expert site reviews and verify the challenges or progress of schools.
Key Data
40%
— of all schools in New York City have already been designated as “schools in need of improvement” and are on the road to suffering other federally-mandated sanctions.
12
— years the federal government gave states to meet the ambitious goals of having every student meet State standards under the No Child Left Behind Act.
99%
— of the districts in the State where ultimate accountability for performance comes through the election of the school board by the voters in the community.
40
— children in a demographic group required for results to be disaggregated and reported separately under federal law and State standards.
65
— score or better required on five separate Regents exams for graduation in New York State.
New York State must shift toward statewide funding for public education to ensure a sound basic education, as current reliance on local property taxes creates inequities and places an undue burden on New York City. The state currently lags behind the national median in its share of education funding, necessitating a restructuring of revenue sources and teacher compensation to improve educational outcomes.
Recommendations related to State School Aid
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.
Increase teacher time spent on classroom instruction.
Enhance principals' managerial discretion.
Key Data
48%
— New York provides only 48% of its schools’ non-federal revenue.
57%
— The national median state share of non-federal primary and secondary education funding is 57%.
171%
— New Yorkers pay 171% of the national average in local taxes.
43%
— In the 1999-2000 school year, about 43% of teacher job titles were deemed in shortage.
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