Andrew Cuomo

New York keeps shortchanging poor students

New York's Foundation Aid formula has major shortcomings, which include using a decade of inconsistent local share calculations, arbitrary floors and ceilings, old demographic data and guaranteed increases regardless of changing demographics or enrollment. As a result of these distortions, excess aid is sent to wealthy districts and poorer districts get shortchanged. The state cannot afford to fully fund the warped formula, yet advocates are calling for a $2 billion increase in Foundation Aid in the coming year.

Andrew Cuomo Smart Schools

Andrew Cuomo Smart Schools Darren McGee/Office of the Governor

As state leaders enter the final stages of negotiating the fiscal year 2018-2019 budget, education aid is likely to be one of the main sticking points. If past is prologue, total education spending in the adopted budget will exceed the amount in Gov. Andrew Cuomo’s executive budget. But will the adopted budget include reforms to target aid where it is needed most?

The executive budget school aid proposal is $26.4 billion for the 2018-2019 school year – an increase of $769 million or 3 percent. Almost half of the increase is dedicated to Foundation Aid, which increases by $338 million, or 2 percent, to $17.5 billion. Foundation Aid makes up approximately two-thirds of state education aid and was originally designed to ensure that all students have access to a sound basic education.

The Foundation Aid formula determines how much it costs to provide students in each school with an adequate education, taking student needs and regional cost differences into account. The appropriate level of local support is then calculated based on property values and resident incomes, and the rest is funded by the state. Or at least that’s how it is supposed to work.

Unfortunately, the Foundation Aid formula as currently implemented has major shortcomings, which include using a decade of inconsistent local share calculations, arbitrary floors and ceilings, old demographic data and guaranteed increases regardless of changing demographics or enrollment. As a result of these distortions, excess aid is sent to wealthy districts and poorer districts get shortchanged. The state cannot afford to fully fund the warped formula, yet advocates are calling for a $2 billion increase in Foundation Aid in the coming year.

Instead of addressing the built-in inequities head-on, the executive budget proposed to freeze the Foundation Aid formula at fiscal year 2018 levels and add to existing distributions using new formulas. The new formulas appropriately distribute larger increases to districts with the highest needs; however, they also include a minimum increase of 0.25 percent that mostly benefits wealthy districts. Since enrollment is increasing in poorer districts while wealthier districts have seen enrollment declines, some wealthy districts receive more generous increases in aid per pupil compared to other districts. To see how the increases per pupil vary throughout the state, the Citizens Budget Commission created a map that shows how every district in the state fares under the governor’s Foundation Aid proposal. Although all districts are guaranteed an increase, some poorer areas of the state would actually experience declines in aid per pupil.

However, even if the new formulas were perfect, they would only affect the distribution of the $338 million added this year, ignoring the problems with the $17.2 billion Foundation Aid base allocation.

Fixing the existing Foundation Aid formula would require streamlining the local share calculation, repealing arbitrary floors and ceilings, updating demographic data regularly and repealing any guaranteed amounts or increases. The net result of adopting these changes would be an increase in state aid for poorer districts and decreases to, or elimination of, Foundation Aid for wealthy districts. It also means the state would be able to fully fund a sound basic education with the resources it currently devotes to school aid.

There are, of course, political realities that must be overcome in order to effectuate such substantive changes. However, the time has come for New York’s leaders to direct state aid where it is needed most by students, not politicians.

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