A Look at State Aid Cuts in New York State 2011-12

Uncategorized 5 Minutes

Following is another in my school finance geeky series of straight-up analyses of state school finance formulas. I wrote about New Jersey’s funding formula few days ago. This analysis focuses specifically on the cuts levied across NY school districts for 2011-12 and the underfunding of the foundation formula for select districts.

In 2007, New York State adopted the new Foundation Aid Program.

A full critique of that state aid program can be found here: NY Aid Policy Brief_Fall2011_DRAFT6

That school funding formula was argued by the state to represent the state’s constitutional obligation to provide for a sound basic education. That argument was built on the assumption that the underlying base aid for the formula would be calculated by estimating the average instructional spending per pupil of districts statewide that were performing well, or achieving 80% proficiency on state assessments.[1] By 2011-12, the foundation level was to be set to $6,535.[2] For each district, the sound basic level of funding would be determined by multiplying the foundation funding level times that district’s Pupil Need Index to account for variations in student populations to be served, and Regional Cost Index to account for variations in regional labor costs.

Target “Sound Basic” Funding per Pupil = Foundation x PNI x RCI

            Next, to determine each district’s total sound basic, or foundation formula funding target, this per pupil funding figure was to be multiplied times the Total Aidable Foundation Pupil Units, or TAFPU. TAFPU is based on district enrollments, but includes additional weightings to account for student needs, such as students with disabilities and summer school pupils.

Total Sound Basic Funding Target = Sound Basic Funding per Pupil x TAFPU

            Next, for each district, the state determines the share of the total to be raised locally and the share to be distributed in state foundation aid. A district receives the greater of aid levels based on two different calculations:

State Foundation Aid = Total Sound Basic Funding Target – Expected Minimum Local Contribution

OR

State Foundation Aid = Total Sound Basic Funding Target x State Aid Sharing Ratio

 Applying the Formula to Small Cities and New York City

We can apply these calculations to determine the aid that should have been received in 2011-12 by several of the state’s small cities and by New York City, based on data and parameters from state aid runs as provided on April 1, 2011. (again… this is how it hypothetically works).

Table 1 shows the first portion of the calculations

Note that these are all high need districts, though Tonawanda and North Tonawanda are certainly lower need than Utica or New York City. Among the districts Utica has by far the highest pupil need index. New York City and other downstate Hudson Valley districts have the highest labor market cost estimates. All but Tonawanda and North Tonawanda receive target per pupil funding levels over $10,000.

In the next step, we determine the total foundation funding and the state share of that funding target.

Table 2. Calculation of Promised State Aid

For example, for Albany, the target per pupil funding is $12,179. The expected minimum local contribution is $4,749 and the difference between the two is $7,430 per pupil. In the case of Albany, that difference becomes the state aid per pupil amount. Multiply that amount times the aidable pupils, and you’ve got a total state aid of about $93.5 million. For New York City, it turns out that the higher aid amount is allotted by using the State Aid Sharing Ratio instead of the difference between target funding and estimated local contribution. By the final calculation, New York City would receive about $8.6 billion in aid.

 Broken Promises: Aid Freezes and Gap Elimination

But, this is all hypothetical. This is all entirely based on the promised foundation aid formula. This is all based on the foundation aid formula that the state has argued is by its design the manifestation of the state’s own constitutional obligation to provide a sound basic and meaningful high school education to children across New York State.  Note that I have provided an entirely separate report which explains the insufficiency of these targets and the rationale behind them. But let’s accept these targets for the moment and explore the extent to which even these modest promises have been ignored. Because we are dealing with really big numbers here, Table 3 reports those numbers in millions.

Table 3. Foundation Freezes and Gap Reductions (or are they just aid cuts?)

For Albany, the sound basic level of aid calculated by the legislature’s own formula is about $93.5 million. But, from the start, foundation aid was frozen at prior year levels, which were actually frozen at the levels of the year prior to that. For Albany, the aid freeze brings them down to $56.7 million, or a $37 million shortfall from their sound basic aid calculation. For New York City, the freeze alone pulls out $2.4 billion in aid. For small cities, the total reduction from the freeze, the total underfunding of sound basic aid, is about $271 million.

But it doesn’t end there. The state budget for 2011-12 does not promise to fund even that frozen level of aid. Rather, an additional “Gap Elimination Adjustment” was applied to cut aid further. At the last minute of the legislative session, there was partial reduction of this adjustment, but not full reduction. The adopted Gap Elimination adjustment removes another $12.5 million from Albany, bring their actual state aid level for 2011-12 to rest at $44.2 million, or less than half of their sound basic aid target. The total funding gap for small cities is $370 million. And the total funding gap for New York City after the Gap Elimination adjustment is $3.2 billion.

In summary, even if we pretend that the current foundation formula does provide for a sound basic education, even if we ignore that the current foundation formula is set to relatively low success rates on an assessment where scores had become inflated over time, the New York State Legislature has fallen 30% to 50% or more below these funding promises for many high need, large districts. Statewide, the foundation formula shortfall before Gap Elimination adjustment is approximately $5.5 billion, and after gap elimination adjustment is $8.1 billion. While the current formula itself falls short in many ways, the New York Legislature faces a serious uphill climb simply to keep their own promises.

Spreadsheet of Calculations: Funding Gap NY Calculations

Note: Analysis above focuses on the Foundation Aid Program. Other aids outside this formula include:

F(FA0013) 00 2011-12 CHARTER SCHOOL TRANSITIONAL

G(FA0029) 00 2011-12 HIGH TAX AID

H(FA0065) 00 2011-12 SUMMER TRANSPORTATION AID

I(FA0069) 00 2011-12 TRANSPORTATION AID W/O SUMMER

J(FA0073) 00 2011-12 BUILDING AID

K(FA0077) 00 2011-12 BUILDING  REORG INCENTIVE AID

L(FA0081) 00 2011-12 OPERATING REORG INCENTIVE AID

M(FA0085) 00 2011-12 NON-CMPNT COMPUTER ADMIN AID

N(FA0089) 00 2011-12 NON-CMPNT CAREER EDN AID

O(FA0021) 00 2011-12 NON-CMPNT ACADEMIC IMPROVMT AID

P(FA0093) 00 2011-12 BOCES AID

Q(FA0097) 00 2011-12 PUBLIC EC HIGH COST AID

R(FA0101) 00 2011-12 PRIVATE EXCESS COST AID

S(FA0105) 00 2011-12 SOFTWARE AID

T(FA0109) 00 2011-12 LIBRARY MATERIALS AID

U(FA0113) 00 2011-12 TEXTBOOK AID

V(FA0117) 00 2011-12 HARDWARE & TECHNOLOGY AID

W(FA0121) 00 2011-12 FULL DAY K CONVERSION

X(FA0125) 00 2011-12 UNIV PREKINDERGARTEN AID

Y(FA0033) 00 2011-12 SUPPLEMENTAL PUB EXCESS COST

Z(FA0185) 00 2011-12 ACADEMIC ENHANCEMENT AID

Published by schoolfinance101

Bruce Baker is an Professor in the Graduate School of Education at Rutgers, The State University of New Jersey. From 1997 to 2008 he was a professor at the University of Kansas in Lawrence, KS. He is lead author with Preston Green (Penn State University) and Craig Richards (Teachers College, Columbia University) of Financing Education Systems, a graduate level textbook on school finance policy published by Merrill/Prentice-Hall. Professor Baker has written a multitude of peer reviewed research articles on state school finance policy, teacher labor markets, school leadership labor markets and higher education finance and policy. His recent work has focused on measuring cost variations associated with schooling contexts and student population characteristics, including ways to better design state school finance policies and local district allocation formulas (including Weighted Student Funding) for better meeting the needs of students. Baker, along with Preston Green of Penn State University are co-authors of the chapter on Conceptions of Equity in the recently released Handbook of Research Education Finance and Policy, and co-authors of the chapter on the Politics of Education Finance in the Handbook of Education Politics and Policy and co-authors of the chapter on School Finance in the Handbook of Education Policy of the American Educational Research Association. Professor Baker has also consulted for state legislatures, boards of education and other organizations on education policy and school finance issues and has testified in state school finance litigation in Kansas, Missouri and Arizona. He is a member of the Think Tank Review Panel, a group of academic researchers who conduct technical reviews of publicly released think tank reports on education policy issues.

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