1. School Finance Landscape in New York
Context for the weeks and months ahead
in the school year

2. State Factors Affect School Budgets
State aid:
Gap Elimination Adjustment
Foundation Aid Formula
State aid predictions for
Tax Cap:
0% this year?
Reforms
Other factors:
Smart Schools Bond Act
Tax rebate programs
APPR
Receivership
Prekindergarten
State budget timeline

3. Gap Elimination Adjustment funding withheld from NY schools since 2009-10
The Gap Elimination Adjustment (GEA) was implemented by New York lawmakers for the fiscal year to help close the state’s $10 billion budget deficit at that time. (Its predecessor, the Deficit Reduction Assessment, was implemented in ) Under the legislation, a portion of the state’s funding shortfall was divided among all school districts in New York based on a formula, and each district’s state aid was reduced accordingly. The GEA has remained in place through in order for the state to continue to address budget challenges while funding other priorities.
$1.04 billion
$434 million

4. Foundation Aid Formula frozen, then stalled
The state is $4.4 billion behind full phase-in of the formula.
In 2007, New York state enacted a Foundation Aid Formula to fund its schools. After a $900 million increase in the second year, foundation aid remained frozen for the next three years. Since , foundation aid has been increasing about $200 million per year. It should be noted that under legislation enacted along with the budget, foundation aid is carried forward at prior year levels, unless specific legislation designating a portion of the allowable growth under the school aid growth cap is enacted.

5. State Aid in
State groups calling for $2.2 - $2.4 billion increase:
NYS Board of Regents - $2.4 billion
NYS Assoc. of School Business Officials - $2.4 billion
Educational Conference Board (ECB) - $2.2 billion
New Yorkers for Students’ Education Rights v. New York:
Alleges state is underfunding schools
Verdict expected by year’s end
Could mean $5 billion for schools, but appeal by state likely
State leaders say…
“We’re increasing school aid. We’re getting rid of the GEA, that’s our number one priority.” Sen. Majority Leader John Flanagan
Education spending is "at an all-time high.“ Rich Azzopardi, spokesman for Gov. Andrew Cuomo
NYS Board of Regents source:
Educational Conference Board (ECB) includes:
The Conference of Big Five City School Districts
National Education Association of New York State
New York State Association of School Business Officials – source:
New York State Congress of Parents and Teachers
New York State Council of School Superintendents
New York State School Boards Association
New York State United Teachers
School Administrators Association of New York State
Educational Conference Board (ECB) recommends $2.2 billion increase
$1.7 billion in state aid to continue current programs
End the GEA ($434 million)
Full funding of expense-based aids ($200 million est.)
Restart Foundation Aid formula and provide a significant increase
$500 million in state aid targeted for five initiatives
Universal prekindergarten, English as a new language, struggling schools, graduation pathways, teacher training
ECB data sources:
NY for Students’ Education Rights sources:

6. Tax Cap Formula
Allowable levy growth factor = The lesser of 2% or change in CPI.

7. Tax Cap: It’s Not 2% Year Allowable Levy Growth Factor 2012-13 2.0%
2.00%
1.46%
1.62%
0.00% projected1
1Average monthly change in Consumer Price Index, Jan.-Dec versus Jan.-Sept. 2015
Source: Office of the New York State Comptroller; U.S. Department of Labor, Bureau of Labor Statistics

8. Tax Cap: NY vs. Massachusetts
New York
Basic tax cap
2.5%
Varies by district by year Eight-step calculation
Tax increase permitted without voter approval?
Yes: Up to 2.5% without public vote
No: Must conduct budget vote every year; If not approved, tax levy may not increase at all
Level of voter support needed to exceed cap?
Simple majority (50% + 1 vote)
Supermajority (60% + 1 vote)
Can cap be negative? No
Yes
Subject to CPI?
Was state aid provided to offset impact of the cap?
Note: In Massachusetts, school budgets are a component of municipal finances, and the 2.5% cap applies to the tax levy for all local services. In many municipalities, budgets are subject to approval at town meetings.

9. Tax Cap Reforms Educational Conference Board recommendations:
Make up the shortfall of a 0% cap Included in $2.2 billion recommended school aid increase is $700 million to cover the difference in local revenue between a cap of zero and 2%
Fix the cap Remove the volatility of CPI and allow schools to count on a stable 2% for the allowable levy growth factor
Educational Conference Board (ECB) includes:
The Conference of Big Five City School Districts
National Education Association of New York State
New York State Association of School Business Officials – source:
New York State Congress of Parents and Teachers
New York State Council of School Superintendents
New York State School Boards Association
New York State United Teachers
School Administrators Association of New York State
ECB data source:

10. Smart Schools
Smart Schools Bond Act - $2 billion spread among all school districts
Amount varies by district based on state formula
Designated for technology infrastructure and equipment, high-tech security features, capital project work for pre-kindergarten programs
State-approved Smart Schools investment plan required to begin spending allocation
No expiration date on Smart Schools funds
Source:

11. Tax Rebates/Credits
Property Tax Freeze Credit for school taxes ends in
Rebate on increase in school taxes provided to taxpayers in a district that stays within its tax cap and has a state-approved efficiency plan
STAR program rebates begin in fall 2016
STAR-eligible taxpayers making $200,000 or less to receive a rebate of $185 if district is within its tax cap
School districts do not create, control, or administer state tax exemption/rebate programs

12. APPR APPR changes in 2015-16 state budget: Hardship waivers:
APPR plan meeting new requirements had to be in place by Nov. 15 to receive state aid increase
Hardship waivers:
707 districts in the state; all but 72 asked for and received a state Education Department hardship waiver from this requirement

13. Receivership Receivership set up in 2015-16 state budget:
Special conditions for lowest 5 percent of schools (not districts) with lowest student performance measures
Designated “struggling” or “persistently struggling”
Persistently Struggling
$75 million allocated for turnaround efforts (20 schools identified)
One year to improve under local control or may go into “receivership”
Struggling
No funding allocated
Two years to improve before consideration of receivership

14. Universal Prekindergarten
Not required in New York, but state investment continues… slowly:
… 25 school districts awarded a total of $25 million in competitive grants to increase the availability of high-quality prekindergarten placements for the highest need children and schools
… 53 school districts and 20+ community-based organizations received a total of $340 million “to fund state-of-the-art innovative prekindergarten programs and to encourage creativity through competition”
… 34 school districts received a total of $30 million to increase the availability of high quality prekindergarten placements for high- need children and schools
2015… 5 school districts (New York City, Yonkers, Uniondale, Indian River, Port Chester) divided a $25 million federal grant for preschool expansion

15. State Budget Timeline January to June – 2016 legislative session
Jan. 6 – Governor’s State of the State Address
Jan. 19 – Deadline for Governor to submit Executive Budget Proposal
April 1 – Deadline for state budget adoption

16. Local Budget Dates & Deadlines
March 1 – District’s tax levy limit due to the state
April 18 – Filing deadline for Board of Education candidates (except small cities) & special propositions
April 22 – Deadline for budget adoption
May 3-10 – Hold budget hearing
May 17 – Statewide school budget vote day
Source:

17. “Schools need a responsive and reliable state partner that recognizes the realities they face and makes the commitment needed to address them and move forward.”
- Educational Conference Board School Finance Paper