Hochul willing to consider dropping plan to change school aid, budget official says

ALBANY — Because of better-than-anticipated tax revenue, Gov. Kathy Hochul is willing to consider shelving her proposal to end a longtime policy that guaranteed no school district would receive less state aid than it did the previous year, the state budget director said Tuesday.

Hochul, a Democrat, proposed ending the policy, known as “hold harmless,” citing declining school enrollments over the last decade. The proposal was met with criticism from both Democrats and Republicans in the State Legislature, as it would mean less state assistance for 337 of the state’s more than 700 school districts — including 44 on Long Island.

The governor and state legislative leaders last week released their revenue and economic forecast for the current fiscal year, which projected the state will collect $1.35 billion more in revenue than originally predicted.

State Budget Director Blake Washington, speaking with reporters Tuesday, said that money will “go a long way to smooth out any rough edges that are seen by the legislature.”

“It could go toward any number of things that are in the executive budget,” he said.

When asked by Newsday if that means eliminating the proposed change to hold harmless, Washington said: “Modifying that, I think, is probably fair game.”

Hochul’s $233 billion state budget proposal released in January for fiscal year 2024-25 kept overall spending nearly flat and reduced some aid to schools through the elimination of hold harmless. The spending plan included nearly $35 billion in school funding statewide.

The state Assembly and Senate spending proposals, known as “one-house” bills, are due next week, kicking off budget negotiations between the legislature and governor. Democrats, who hold a majority in the Senate and Assembly, are expected to restore hold harmless in their spending plans.

The final state budget is due by April 1.

Along with hold harmless, Washington told reporters the governor is open to amending the state school aid formula, which would likely result in near- and long-term changes, he said.

The State Education Department, along with education advocacy groups, have called for a study of the decades-old, complex funding formula, which takes into consideration factors including student need, regional cost differences, local district fiscal capacity and the cost of successfully educating a child.

The current formula, originally enacted in 2007-08, but not fully run until last year, has been criticized for its use of outdated 2000 Census poverty data, among other things.

Washington said the administration would be receptive to “amending the formula to provide a meaningful result that the legislative leaders can agree upon.”