February 09, 2015

Educational Conference Board (ECB) asks governor, other state officials for guidance on state aid

Source: Educational Conference Board (ECB)
educational conference board - ebb
Seven leading New York state education groups seek clarification of what school districts should rely upon as baseline state aid figures as they proceed with developing their budgets.

The New York State Educational Conference Board today released the attached letter (Web | PDF) requesting guidance from Governor Cuomo and other state officials on what state aid estimates school districts should use in local budget development and mandated tax cap reporting.

The letter explains that the Governor's proposed budget contains a contingency linking state aid increases to enactment of a series of education policy initiatives. Under the Governor's budget, if the reform initiatives are not enacted, no district would be permitted to receive any increase in state aid.

The Educational Conference Board is comprised of the state's seven leading statewide education organizations and represents parents, teachers, building administrators, school board members, school business officials, superintendents, and other educators.

# # #

For Release: February 9, 2015
Contact: John Yagielski
518-810-8382 (cell)
Email: kyagielski@nycap.rr.com 


Text: ECB Aid Guidance Request

February 9, 2015

Honorable Andrew M. Cuomo, Governor
Honorable Dean Skelos, Temporary President of the Senate
Honorable Carl Heastie, Speaker of the Assembly

Dear Governor Cuomo, Senate Leader Skelos, and Speaker Heastie:

As leaders of the state's public schools, we write to you for clarification of what school districts should rely upon as baseline state aid figures as they proceed with developing their budgets and plan to submit data in compliance with property tax cap reporting requirements.

In the "State of Opportunity" address and budget presentation, Governor Cuomo indicated that School Aid would increase by $1.1 billion (4.8 percent) if a series of education reforms are enacted, but only $377 million (1.7 percent) if reforms are not enacted.

However, the "Education Opportunity Agenda" Article VII bill provides,

25	Section 1. As used in this section, "current  year"  and  "base  year"
26	shall have  the same meanings as defined in paragraphs a and b, respec-
27	tively, of subdivision 1 of section 3602 of the education law.
28	1. Notwithstanding any provision of law  to the  contrary,  a school
29	district shall not be eligible for an apportionment of general support
30	for public schools for the 2015-16 school year or any school year there-
31	after in excess of the amount apportioned to such school district in the
32	base year, unless the following eligibility criteria and conditions have
33	been met:
34	(a) For all school districts, the director of the budget has notified
35	the commissioner  of  education  in writing that by March 31, 2015 the
36	legislature has enacted a chapter or chapters of law identical to part A
37	and part B of this act as proposed in legislative  bill numbers S.2010
38	and A.3010  and  submitted  in  support of the executive budget for the
39	2015-16 state fiscal year; and … (S. 2010/A.3010, p. 56).

Similar language is contained in the School Aid appropriation (S.2003/A.3003, p. 107).

This provision establishes that if proposed reforms are not enacted, no district would receive an increase in aid over what it received in 2014-15.

It is not clear what amount districts would receive if proposed reforms are enacted into law. The Executive Budget would appropriate funding for a $1.1 billion increase. But the budget does not propose formula changes or other funding recommendations to allocate a full $1.1 billion increase.

Under either scenario, current law School Aid formulas remain in place. So if the proposed reforms are enacted, it may be reasonable to assume that districts would receive current law funding amounts for such aid categories as Building, Transportation, BOCES, and Excess Cost (special education) aid, as well as other categories. On the other hand, 146 districts are to experience reductions in aid under current law, due to changes in enrollment, wealth, expenditures or other factors. Accordingly, if reforms are not enacted, these districts would lose aid, since the bill language cited above provides no district would receive an aid increase; it does not freeze aid for all districts.

In subsequent spoken comments, the Governor has advised that districts should plan on a 1.7 percent aid increase, stating that this amount is provided for under the state's statutory School Aid growth cap, based on change in statewide personal income. But again, the bill section cited above provides that, absent enactment of education reforms, no district would receive any increase in aid over 2014-15 amounts. Also, the growth cap indicates a planned overall statewide increase in aid; it would not assure every district a 1.7 percent increase. Finally, we note that through October, the Division of the Budget had been projecting that the growth cap would call for an $864 million (3.9 percent) increase (see Division of the Budget Mid-year Update to the 2014-15 State Financial Plan, p. 61).

District leaders need baseline state aid estimates to comply with reporting requirements for the property tax cap. By law, districts are required to submit data to the Office of the State Comptroller, State Education Department, and Department of Taxation and Finance by March 1. Relying upon current law estimates would partially address these responsibilities. But again, budget legislation provides that unless education reforms are enacted, no district would receive an aid increase above what it received in
2014-15.

There are also larger considerations for district leaders. The school district budget process emphasizes openness and transparency. Outside the "Big Five" cities, the process culminates with a voter referendum. Requiring voter approval, the entire process emphasizes informing and engaging local opinion leaders, parents, and other voters. The School Aid levels proposed in the Governor's budget give district leaders a documented baseline estimate for one of the two major revenue sources for most school systems. This enforces a degree of realism in the consideration of budget options by these community parties.

Delaying the availability of any creditable state aid estimates until late March or beyond does not allow enough time for this realistic engagement over options to take place. Also, by collective bargaining agreement, some districts have advanced layoff notice requirements. If districts are to proceed with the assumption that no aid increase is a possibility, this would require the issuance of layoff notices before the state enacts a budget.

The property tax cap has elevated the importance to districts of timely and reliable state aid figures. Prior to the tax cap, spring budget votes authorized a maximum spending level. Districts could then wait, even into summer for a final state budget and resulting School Aid runs, before adopting a tax levy. Under the prior system, the local tax levy essentially constituted the "last dollar in" in district budgets, filling the gap between the voter-approved spending level and other revenue sources. But now, budget votes authorize a maximum local tax levy – once approved by voters it may not be increased.

Accordingly, we seek official guidance on what level of School Aid individual districts should use in complying with tax cap reporting and local budget development.

As a final point, we also want to emphasize that uncertainty over state aid expectations has so far diverted attention from even more critical matters, including consideration of the overall financial needs of public schools.

In October, the Educational Conference Board groups joined together to issue a statement outlining the need for a $1.9 billion increase in School Aid to accelerate the end of the Gap Elimination Adjustment, assure adequate funding for all districts, and advance critical priorities such as expanding full-day prekindergarten, strengthening career and technical education, improving services for English language learners, and supporting implementation of state education reform initiatives.

We continue to advocate for enactment of funding to advance all these essential priorities for the schools and students we serve.

Sincerely,

John Yagielski, Chair

Bonnie Russell, President, New York State PTA

Timothy Kremer, Executive Director, New York State School Boards Association

Andrew Pallotta, Executive Vice President, New York State United Teachers

Robert Reidy, Executive Director, NYS Council of School Superintendents

Georgia Asciutto, Executive Director, Conference of Big 5 Schools

Michael Borges, Executive Director, NYS Association of School Business Officials

Kevin Casey, Executive Director, School Administrators Association of New York State

C: Senate Democratic Leader Stewart Cousins
Senate Independent Democratic Conference Leader Klein
Assembly Republican Leader Kolb
Senate Education Committee Chair Flanagan
Assembly Education Committee Chair Nolan
Acting State Education Commissioner Berlin