The NY Legislature Must Reject Gov. Hochul’s Minimal Education Funding Proposal and Establish a New Funding Approach That Truly Meets Student Needs

The Executive Budget proposal for education funding for next year that Governor Kathy Hochul released last week was extremely disappointing. It includes a minimal 2.1% increase ($507 million) in foundation aid (which provides core operation aid for all school districts), compared with the $2.7 billion that was added last year. This year’s small increase does not keep up with inflation. It also fails to allow school districts to continue to make up for pandemic learning loss, as federal aid is being phased out. Finally, her proposal calls for reducing the current save harmless provision, a measure that ensures districts will receive at least as much funding as they did the previous year, even if their school population has declined in a way that will devastate the budgets of many small and rural schools that have had big population losses. 

By contrast, the State Education Department and the Education Conference Board (ECB), which is composed of the major statewide education organizations, both called for maintaining the current levels of foundation aid with full inflation adjustments. They also each called for a number of temporary revisions to the existing funding formula to deal with specific ways it is grossly out of date or inequitable. SED’s proposal would increase foundation aid by $1.3 billion. It would tweak the current formula by, among other things, using current poverty counts, rather than 2000 census figures that the formula now uses, and eliminating the income wealth index minimum that results in the poorest of districts being treated by the formula as wealthier than they really are. The ECB also calls for updating the regional cost index and revising various pupil count weightings, including those for students with disabilities. 

At a minimum, the legislature needs to accept these SED and ECB proposals. It also needs to provide resources to allow New York City and other districts to respond to the recent influx of migrant students and to provide the necessary funding to allow New York City to meet the mandate the legislature has imposed on the New York City Department of Education to substantially reduce class sizes over the next few years. More fundamentally, however, the legislature, working with the governor and the Regents, needs to set up a process to analyze the full range of our students’ current education needs and respond to them in a thoughtful, deliberative manner rather than through temporary, band-aid approaches.

The save harmless (referred to as “hold harmless”) provision was intended as a temporary measure to support districts through the financial crisis that occurred more than a decade ago; it essentially became a permanent fixture as high-need and rural districts became faced with significant demographic shifts with the migration of over one million people from rural areas of the state into the urban centers. Now, however, the state must responsibly confront these rural realities and other dramatic changes in student demographics and student needs: large increases in students living in poverty, an influx of students who are newcomers to the United States, rapidly rising numbers of students in temporary housing, and the impact of the pandemic both on student learning and student mental health. All these changes have created huge funding challenges for school districts that did not exist in 2006 when the current foundation aid formula was created.  

Governor Hochul’s executive budget proposal totally ignores these vast needs. She has not responded to our proposal (incorporated in bills introduced in both houses of the legislature last year) to create an independent permanent commission to explore these issues in depth, create a new foundation formula responsive to current educational needs, and monitor its effectiveness. Considering the range of contemporary education needs and rethinking the weightings and other technical mechanisms of the complex foundation aid formula requires a thorough, deliberative process involving education finance experts and substantial public engagement processes and constituent input. Neither the governor nor the legislature has set up any process for doing this.

The governor has not even responded to SED’s modest request for a $1 million appropriation to retain education finance experts to analyze the problems with the present formula. She emphasized a need for “more measured education spending,” but cost-effectiveness should be pursued through reasoned research into more efficient and effective methods for meeting student needs, and not by putting an arbitrary cap on funding increases. 

Although funding SED’s request for expert input would be a helpful start, we reiterate our position that a thorough revision of the foundation aid formula is warranted. This requires a commission or another structure that also allows for thorough expert study, public deliberation, and a robust public engagement process that seeks input from stakeholders, including teachers, students and their families, school and district leaders, and other community leaders.

To meet immediate school funding needs in the budget for 2024-2025, the governor or the legislature should quickly appoint a representative group of knowledgeable New Yorkers and educational finance experts to review the SED and ECB recommendations, as well as the funding requirements of New York City’s class size mandate and districts’ needs relating to the education of migrant students. This group should then make recommendations.

Ultimately, the state cannot cut corners when it comes to its young people’s futures. A full commission should then be established to analyze current needs thoroughly and propose a new foundation aid formula for the 2025-2026 school year and beyond. The commission should also examine ways to eliminate excessive or wasteful expenditures (like the $1.3 billion currently being spent on private school special education placements and services), abolish unnecessary state mandates, and promote cost-effective practices without sacrificing educational quality and students’ rights. Finally, the commission should also propose permanent mechanisms for monitoring implementation and proposing regular periodic updating of the foundation aid formula, as necessary, to ensure equitable and adequate school funding that fulfills the state constitution’s guarantee of a meaningful education for all New York students.