Later this week, the New York State Education Department's Board of Regents will be submitting for approval its final state aid proposal for the upcoming 2013-14 school year.
The final proposal is being developed from elements of the Regents' conceptual proposal, which was presented in November. The state aid proposal is intended to address the issue of providing quality educational equality in the midst of an economic recession by suggesting modifications to the existing funding structure in support of a productive and efficient system.
The proposal cites many problems facing school districts as consequences of the recession of 2008. The Board of Regents say that in 2007, the state had enacted a new Foundation Aid formula which would consolidate approximately 30 categories of aid into a single formula and provide a more equitable approach to distributing state aid. More than $5 billion in new operating aid was to be phased in over a four-year period.
After the economic collapse in late 2008, increases in the Foundation Aid were frozen and enacted state budgets further reduced state funding through gap elimination adjustments. These adjustments were alleviated through funds provided by the American Recovery and Reinvestment Act of 2009, but now those funds have been exhausted as well. This resulted in levels of state support for public schools in the 2012-13 school year being lower than in the 2008-09 school year, as well as Foundation Aid being $5.5 billion below its full implementation target.
As a result of reduced state and local funding, school districts have lowered the rate of spending increases. However, the rate of increasing costs such as district contributions for employee health care, retirement costs and energy utilization are challenging to the districts' efforts to maintain a balanced budget. Studies show that districts are using increasing amounts of their unrestricted surplus, or fund balance, to cover these costs, with an overall fund balance decrease of 55 percent between the 2009-10 and 2010-11 school years.
In an attempt to rebound from this downward spiral, a process that is projected to take at least a decade, the Board of Regents has made recommendations for improving student learning in these fiscally challenging times. The Board places a large importance on prioritizing support for school districts with the greatest need and the least local fiscal resources through a Foundation Aid construct and a modification to the gap elimination adjustment.
Other strategies put forth in the proposal include: adjusting the Personal Income Growth Index, encouraging multi-year fiscal planning, investing in a consistent statewide universal pre-kindergarten program, incentivizing the merging of school districts to counter the issue of declining enrollment throughout most of the state, instituting reforms to building aid and pupil transportation, promoting mandate relief and promoting flexibility relating to curriculum, transportation, educational management services and containing special education costs while protecting educational opportunities.
The 2013-14 Regents state aid conceptual proposal will be submitted for approval before Board of Regents at its meetings Monday and Tuesday.