The vigorous debate on the amount and distribution of state education aid occurs with each annual budget cycle. In recent years the Governor has proposed substantial increases. Yet the Board of Regents, teachers’ unions, and advocates demand even larger increases, and the adopted budget falls somewhere in between. This year is no different: the Governor has proposed an increase of nearly $1 billion while others advocate for more than $2 billion.

Despite contrary claims, the majority of districts already have sufficient resources to fund an SBE. In fact, due to significant increases in spending over the past decade, 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.

To be clear, providing the financial resources to provide an SBE does not guarantee that all students receive a high-quality education. However, it is an important goal to meet and can be accomplished with  less than 20 percent of what the Executive Budget proposed.

State Aid Need Only Increase $164 Million to Fund an SBE

In response to the lawsuit that found the State was failing to provide New York City with the resources needed to provide an SBE, the State created a formula to determine the amount needed for each school district.¹ The formula determines the total district resources needed by specifying a base per pupil amount and adjusting it for special student needs in each district along with regional cost differences.

Based on this calculation, $62.6 billion is needed in 2020 to provide an SBE for New York’s students. As Figure 1 shows, school districts will spend an estimated $72.0 billion in 2020—even assuming no increase in State aid from 2019, historical federal funding levels, and local increases commensurate with the property tax cap.  This is $9.4 billion more than is necessary to fund an SBE. (See Figure  1 and Appendix.)

While total funding is greater in the aggregate, 32 districts would have $164 million less than needed. Therefore, the goal of providing sufficient funding for an SBE could be achieved statewide with nearly $800 million less than proposed in the Executive Budget.  (See Figure 2.)

Executive Budget Would Not Provide All Districts Resources for SBE Despite Nearly $1 Billion Increase

The Governor’s Executive Budget proposes to increase school aid $956 million.² However, since it is not targeted to districts with the greatest need, 28 districts still would not have the resources needed. Not surprisingly, the underfunded districts are generally low-wealth districts.³ (See Table 1.)

Education Funding Increased 41 Percent Over Past Decade

Education funding has grown significantly over the past decade. Between school year 2006-2007 and school year 2016-2017, school district revenues increased $20 billion, or 41 percent–twice the rate of inflation. State aid increased 30 percent, or $6.5 billion, and local funding increased 54 percent, or $13.3 billion. New York City local revenues increased 99 percent, while the rest of the state local funding increased 30 percent. State aid increases were concentrated in the lower-wealth districts, while local revenues increased somewhat evenly outside of New York City.  Federal aid growth was more variable, but it represents a comparatively small share of school district revenues.  (See Table 2.)

Districts have different per pupil and total revenue growth due to enrollment trends. Per pupil revenue in New York City increased 46 percent, less than the 61 percent increase in total revenue due to enrollment growth. Outside of New York City, aggregate declines in enrollment resulted in a per pupil revenue increase of 39 percent, more than the 28 percent increase in total revenue. Local and State funding increases also reflect this disparity. Per pupil State aid outside New York City increased 39 percent, and local revenues increased 41 percent. However, in New York City per pupil State aid increased 20 percent, which is equal to inflation, while local revenues increased 80 percent.  (See Table 3.)

Inaccurately Reflecting Local Spending Results in Overstatement of State Aid Shortfalls

Some claim that State aid is $4 billion less than is needed to support an SBE.⁴ Like the analysis presented here, this claim is based on the formula that calculates the resources needed for an SBE.⁵ However, it differs from CBC’s analysis in that it does not reflect actual local funding. Instead, the formula calculates a hypothetical local funding level that is lower than actual local resources provided. It then assumes that the State should make up that gap.

The flaw is exemplified by 179 districts whose actual local funding are already sufficient to provide an SBE; despite this, these districts receive $2 billion in State aid and the flawed Foundation Aid formula concludes these districts need an additional $373 million in state aid to support an SBE.  

Conclusion

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.