New York State school funding needs a reset

Not even New York's best students could make sense of the puzzle that is New York's system of providing public school aid.

The primary pot of money known as “foundation aid,” which makes up the bulk of state aid to school districts, is shaped by an opaque and inscrutable formula that determines much of what each district gets. Long the bane of state officials and school district leaders, this formula desperately needs revision. The public must be informed clearly and simply about what goes into its calculations.

That is only one of the major problems with how funding is awarded. It's also long past time to revisit the assumption that schools will always get more money than they got the year before.

Fortunately, Gov. Kathy Hochul recognizes these and other problems, like the booming amount of reserve funds held by some school districts. Unfortunately, she has chosen an ill-devised way of dealing with this contentious issue.

In her budget proposal last month, Hochul suggested ending the provision known as “hold harmless” or “save harmless” — the promise that school districts would get at least as much aid as they got the prior year. Dozens of Long Island school districts could see reductions in state aid for 2024-25, some by more than 20%. On top of that, Hochul proposes changing how inflation is factored, smoothing it as a 10-year average rather than adjusting year-by-year. That could be painful for districts with soaring costs.

NECESSARY REVISION

Revisiting aid calculations is necessary and overdue. But the governor's plan came without warning or prior discussion. Superintendents, advocates and state Education Department officials were caught off guard. Hochul's own budget officials admit the brash move is a “blunt instrument” that is now “provoking a conversation.” That conversation should have taken place before.

The current foundation aid formula includes economic factors such as poverty levels, regional costs, property values and inflation, and educational factors such as enrollment and the number of students who are designated as English Language Learners or who have special needs. Those factors and many others are thrown together in ways few people understand to apportion aid for the state's 673 school districts.

But the poverty and regional cost levels used for areas like Long Island are artificially low. The formula doesn't account for a new focus on mental health and social and emotional needs, and should better reflect student population changes due to immigration trends. By many accounts, high-needs districts still aren't getting the funding they require and wealthier districts are getting too much.

Last year, the state Board of Regents sought $1 million to fund a study of the foundation aid formula, but it didn't make the final budget. State lawmakers should revive the measure. Such an analysis must be independent and provide multiple avenues for reform. Funding increases shouldn't always be presumed.

Part of that reformulation is ending the “hold harmless” provision. Hochul was right to focus on enrollment; many schools have seen significant population declines, and fewer students means lower costs. She also noted that some of those districts have excessive reserves, beyond state limits, that they refuse to spend.

PROVIDE NOTICE

But allowing those factors to trigger funding cuts would require legislation spelling out clearly the circumstances that would prompt that — such as an enrollment decline combined with reserves that exceed set limits. Enrollment decreases happen over time; cuts probably should, too, so the impact isn't as severe in a single year.

Another factor in determining aid should be a school's opt-out rate on standardized tests. Districts whose students and parents refuse state tests in droves should face a financial penalty. Taxpayers have a right to know whether their dollars are well spent. 

Such metrics must be clearly spelled out, so a district would know when it's in danger of state aid cuts.

None of that should happen overnight. Hochul's current effort, which lacks straightforward metrics and emerged with little warning, would force school districts to make tough decisions too quickly. If such cuts appear in a state budget finalized April 1, school administrators would have very little ability to adjust before their own school budgets face a May 21 public vote.

School districts deserve some warning, a “glide path” of sorts, before drastic changes are made. Hochul and the legislature should restore the proposed cuts and the “hold harmless” provision, for now, while preparing legislation that sets standards for future funding shifts.

Let this year's proposal serve as the warning school districts say they need. Our method of funding schools must change — just not like this.