Hochul, lawmakers discuss updating outdated school aid formula

ALBANY – Legislative leaders say they and Gov. Kathy Hochul are discussing a comprehensive revision of the outdated formula  used to distribute $35 billion in school aid.

The proposal in closed-door budget negotiations could be an alternative to Hochul’s idea to end the “hold-harmless” practice that guarantees every school district more state aid each year.

Those negotiations are now scheduled to extend beyond Monday’s due date for the 2024-25 state budget.

Lawmakers plan to pass by Tuesday an extension to fund state operations and ensure more than 58,000 state workers are paid while leaders continue to negotiate, according to Senate Majority Leader Andrea Stewart-Cousins on Wednesday.

Major sticking points between the Democratic governor and Democrats who control the State Senate and Assembly have centered around the need to rein in Medicaid spending and Hochul’s plan to build more housing statewide. Hochul and the Legislature also are divided on how much the final budget should spend, with the Legislature looking to add about $13 billion to Hochul’s proposed $233 billion budget.

Changing the school aid formula, however, has been a major issue in budget talks so far.

Stewart-Cousins (D-Yonkers) and Assembly Speaker Carl Heastie (D-Bronx) this week said there has been no agreement, but a broader study to update the school aid formula is being discussed in the private talks. The broader study was part of the Senate and Assembly budget proposals released earlier this month as a counter to Hochul’s call to end the hold-harmless practice as a cost-saving measure by allowing the formula to direct the most funding to the neediest schools.

Hochul wouldn’t comment on statements by Heastie and Stewart-Cousins or about negotiations. Her proposal to end the hold-harmless practice includes $100 million to help school districts that would see a year-to-year reduction in aid.

Stewart-Cousins, however, said eliminating the hold-harmless practice alone continues to be a “non-starter.” Legislators have argued Hochul’s proposal would mean less state aid in the coming school year for half of the state’s nearly 700 school districts.

“Anything that begins with half the school districts in the state losing the money they had planned to get, based on past practices, is really a non-starter,” Stewart-Cousins said in a news conference on Wednesday. “So, we continue to talk about how to move forward on school funding and the importance of doing a study that will let us update the data to look at how we fund schools prospectively.”

The current school aid formula uses some data that is 20 years old to reflect a school district enrollment and the wealth or poverty of the community it serves. The state Board of Regents, which sets education policy, has for years unsuccessfully sought the Legislature’s approval to do a comprehensive updating of the formula.

“We are talking about how we can create a path forward that is based on contemporary data and contemporary needs and contemporary resources that will allow the school districts to plan properly,” Stewart-Cousins said.

Heastie told reporters Tuesday that he expects the broader study will be part of the budget.

“We want it to be reviewed and have it adjusted,” Heastie said.

Hochul proposed ending the hold-harmless practice as a way to control school aid after record increases in the last two years. She said 77 of 121 school districts on Long Island would receive more aid under her school aid proposal.

In February, Newsday reported that the Board of Regents and Education Commissioner Betty Rosa opposed ending the hold-harmless process abruptly, and instead urged the Legislature to fund a $1 million study to update the entire school aid formula.

“Implementing these changes would move toward more equitable funding based on current district need, rather than based on a district’s circumstances two decades ago,” the Regents stated.

The Regents estimated a study by experts in the field could take three to five years to complete and implement, but Hochul has said that was too long to fix the formula.

Stewart-Cousins said Wednesday, “I think we believe that we could do something sooner than that. We have so many resources and technology … I believe that we all believe we can do it in a reduced amount of time and get to the points we want to get to.”