BUDGET PROPOSES HISTORIC SCHOOL AID INVESTMENT TIED TO ACCOUNTABILITY

Governor Eliot Spitzer today proposed a record $1.46 billion increase in funding for 2008-09, the second year of a $7 billion four-year Education Investment Plan.  The $1.46 billion increase, the largest ever proposed by a Governor, will bring total education spending to $21.01 billion, a 7.4 percent increase from 2007-08.  This is approximately the same amount that was projected to be spent on education in 2008-09 when the Budget was enacted last year.

As with the current year, the Budget allocates the vast majority of operating aid through the Foundation Aid Formula, which uses objective criteria to better target state funds to high needs districts, and is tied to the accountability measures created last year with the Contracts for Excellence. 

Two aid categories were revised to use wealth factors to allocate funding similar to the Foundation Aid Formula:  High Tax Aid, which is provided to districts where the property tax burden is greatest relative to income; and Boards of Cooperative Educational Services (BOCES) Aid. After these changes, overall BOCES funding will total $594 million, a year-to-year decrease of $31 million.  These changes will better target funds to high-needs and average-needs districts.

“Investing in education is essential to New York’s future if we are to remain competitive on a global stage,” said Governor Spitzer. “This unprecedented infusion of resources for the second year in a row, coupled with accountability measures proven to get results, will dramatically improve the quality of the education we deliver and lay the groundwork for future economic growth.” 

The cumulative increase delivered to districts over Governor Spitzer’s two years will total $3.18 billion or 17.8 percent under this proposal.

This Budget proposal builds on reforms implemented in the current year.  The Budget refines the Contracts for Excellence accountability initiative to ensure that these requirements apply to qualifying districts’ annual expenditures for at least three years.  At the same time, however, districts that demonstrate improvement in student performance by making “adequate yearly progress” in all schools identified as deficient would no longer be subject to the Contract for Excellence requirements.

Additionally, programs to help English Language Learners meet grade level requirements have been added as an approved use for Contract for Excellence funding. Other strategies that can be implemented under the Contracts include lowering class size, increasing student time on task, providing full-day prekindergarten or kindergarten, expanding teacher quality initiatives, and restructuring middle or high schools.

Coming during a national economic slump, the Executive Budget recommends adjusting the projected expansion of Foundation Aid, saving $93 million in the 2008-09 fiscal year. The overall projected increase in Foundation Aid this year will total $899 million, an increase of 6.6 percent.  This year’s adjustment affects a fraction of the Governor’s overall funding proposal and does not impact his commitment to invest $7 billion over 4 years.

At the time the 2007-08 Budget was enacted, funding for Foundation Aid was expected to increase by $1.24 billion in 2008-09. Several factors combined to change this projection.

Updated wealth and demographic information reported by school districts, which are components of the Foundation Formula, significantly altered the amount and distribution of this category of aid, which would have totaled $992 million in 2008-09 if no other actions were taken.

Furthermore, while the Executive Budget continues to calculate funding based on the cost of a successful education and student needs, several adjustments were made to balance the competing priorities of targeting support to high need districts, preserving funding stability, and addressing the state’s budgetary constraints.

These changes to the formula, which brought the total increase to $899 million, include:

• Enhancing the Foundation Aid Formula to ensure that high needs school districts continue to receive the greatest increases in Foundation Aid;
• Decreasing the minimum increase in total Foundation Aid that a school district can receive from 3 percent to 2 percent, and decreasing the maximum increase from 25 percent to 15 percent; and
• Decreasing the second year phase-in of the program from 42.5 percent of the planned four-year increase to 37.5 percent.

The Budget includes certain additional aid streams that partially offset the reduction in Foundation Aid.  Specifically, the Budget includes $179 million in Academic Achievement Grants for New York City, $100 million in High Tax Aid for districts statewide and $39 million of incremental Special Services funding — primarily for the Big 5 cities.  When the $318 million from these additional aid streams is added to the $899 in Foundation Aid in the Executive Budget, it represents an aggregate of $1.2 billion in operating support.  

Other education initiatives contained in the Executive Budget include:

• Universal Prekindergarten: The Budget provides $452 million in funding for Universal Prekindergarten. This represents a $79 million increase compared to projected spending on that program in 2007-08, and would support 120,000 students receiving these services, an increase of over 27,000.

• Healthy Schools: The Budget increases reimbursement to schools for the expansion of access to nutritious meals – particularly for low-income students – by $9 million for the 2008-09 school year in support of a Healthy Schools Act.

• Pre-school Special Education: The Budget caps the annual growth in local preschool special education costs for counties outside of New York City.  Under this initiative, counties will realize savings of $31 million in their 2009 fiscal year. Additionally, school districts will be required to assume a portion of the costs associated with administering committees on preschool special education (CPSEs) and providing student evaluations. These actions are consistent with the principles articulated by the Temporary Task Force on Preschool Special Education created in last year’s budget.

• English Language Learners: The budget includes an increase in aid of $2 million to support and encourage the expansion and replication of proven programs and model school reform strategies for the increasing number of English Language learners enrolling in New York's public schools.