NY School Funding Project

New York's Foundation Aid Formula Is Unconstitutional and Out of Date. We Need To Fix It Now!


Center for Educational Equity and American Institutes for Research Initiate ACE (Adequate, Constitutional, Equitable) School Funding Project to Advance the Development of a Constitutional School Funding Formula

The Center for Educational Equity and the American Institutes for Research are launching a project to advance the development of a constitutional school funding formula for New York State to replace the current 18-year old Foundation Aid formula, which is outdated and unconstitutional. Our Adequate, Constitutional, Equitable (ACE) School Funding Project will conduct an independent study to begin a process to develop a new formula that will fulfill the state’s constitutional obligation to provide our students sufficient resources each year to truly meet their educational needs.

 

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Watch the New York School Funding Town Hall

The Center for Educational Equity and the AIR teams provide more information about the new Adequate, Constitutional, Equitable (ACE) School Funding Project and answer questions from the interested public. 

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Frequently Asked Questions (FAQs)

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All New York students have educational rights under the state constitution. A constitutional school funding formula is one that assures these rights are respected. 

Article XI, Section 1 of the New York State Constitution says: “The legislature shall provide for the maintenance and support of a system of free common schools, wherein all the children of this state may be educated.” The New York courts have interpreted this to mean that every student is guaranteed the right to “the opportunity for a sound basic education” that prepares them to function as productive citizens.

This right is a result of the Campaign for Fiscal Equity (CFE) v. State of New York case, a landmark education rights lawsuit brought in 1993 against the state government on behalf of New York City public school students. The state’s highest court in the CFE case ruled that the state must “ascertain the actual cost of providing a sound basic education” and ensure that “every school [will] have the resources necessary for providing the opportunity for a sound basic education.” 

A constitutional school funding formula guarantees that this ruling is carried out and that the state ensures every New York public school receives sufficient funding to provide a sound basic education to all its students.

In the CFE decision, the state’s highest court, held that Article XI of the New York State constitution entitles every student to the “opportunity for a sound basic education,” which it defined as “a meaningful high school education, one which prepares them to function productively as civic participants“ (emphasis added). The court emphasized the right encompassed a “high school” level education because the intermediate appeals court had held that students were constitutionally entitled only to an 8th or 9th-grade level education. 

The Court of Appeals also made clear that the opportunity for a sound basic education must include:  

  • The basic skills necessary to function productively as civic participants capable of voting and serving on a jury;
  • Being qualified to vote or serve as a juror “capably and knowledgeably”; and
  • Preparation for competitive employment.

Funding for the public schools comes from three sources: federal, state, and local education aid. However, the New York State government is ultimately and constitutionally responsible for ensuring every school in every district has “the resources necessary for providing the opportunity for a sound basic education” for all students. State aid for schools is funded by several tax streams, primarily from the State General Fund wherein the major revenue source is state taxes (e.g., income and sales). 

State aid for education is distributed to school districts through school funding formulas that account for student need and other factors. 

The “Foundation Aid” formula was developed to comply with the court’s ruling in the Campaign for Fiscal Equity case and provide constitutional funding for general education service to schools and districts in New York State. To implement the ruling, in 2007 state law reformed the method of allocating resources to school districts by consolidating some 30 aid programs into a Foundation Aid formula that distributes funds to school districts based on the cost of providing an adequate education. 

This amount reflects regional costs and concentrations of pupils who need extra time and help in each district, such as multilingual learners, students with disabilities, and students receiving free-and reduced-price lunch. Extra funding is also allocated to reflect extra costs of operating schools in sparsely populated rural areas. Typically, low-income/high-need school districts receive more state funding than lower needs/wealthier school districts in an attempt to level the playing field with equitable educational resources across school districts.

A cost analysis is a study conducted by education finance experts that predicts the cost of providing a sound basic education for every student based on their unique needs. These experts develop a cost methodology based on research that identifies the number of students in each category of specific needs and the cost of effective strategies for educating these students.

Because the state constitution requires the development of a new formula and the state has not begun to comply with this urgent mandate, the Center for Educational Equity at Teachers College, Columbia University, has engaged the American Institutes for Research (AIR), to undertake an independent study to begin the process of developing a new formula. AIR has extensive national experience in conducting cost analyses and developing adequate and equitable state aid formulas. They will conduct initial technical studies needed to gather and analyze a broad range of data and undertake a preliminary cost analysis for a new formula.

This research will constitute Phase I of our independent effort toward the development of the new formula. In Phase II, we will seek input from educators, fiscal experts, parents, students, and the interested public through public engagement meetings, panels of education professionals, and other mechanisms. We expect Phase I of the project to be completed by the end of 2024. We expect Phase II to be completed at the end of 2025.

The work we undertake with AIR in Phase I will provide data and analysis that will allow the Center for Educational Equity, in consultation with parents, students, teachers, and other education stakeholder groups, to develop positions and proposals on key issues relating to the improvements in the state aid system that the state plans to adopt next spring and put into effect for FY 2025-2026. We hope the work we undertake in Phase II to lead to the development and adoption of a constitutionally compliant new formula for FY 2026-2027.

The Center for Educational Equity is a nonprofit, nonpartisan policy research center at Teachers College, Columbia University, that works to secure every child a meaningful educational opportunity to graduate from high school prepared for college, careers, and engaged civic participation. Founded in 2005 by Michael A. Rebell, the Center uses legal advocacy, academic research, and collective action to achieve foundational change. Learn more about the Center for Educational Equity.

The American Institutes for Research (AIR) is a nonpartisan, not-for-profit organization that conducts behavioral and social science research and delivers technical assistance to solve some of the most urgent challenges in the United States and around the world. Their expertise in education policy research, particularly school finance, sets the standard in the field. AIR uses the best research methods to undertake studies in school finance that shed light on how educational funding and resources can be distributed more equitably across districts/schools and used more efficiently to improve the outcomes of students. 

For nearly two decades, AIR researchers have conducted increasingly sophisticated evaluations of school funding in the state of New York; with Dr. Jesse Levin serving as deputy project director, they conducted the original New York adequacy study as part of the remedial phase of the Campaign for Fiscal Equity v. State of New York litigation. Levin has collaborated with colleagues within and outside of AIR to conduct over half a dozen state-level school finance studies, as well as studies of resource allocation, funding, and spending associated with major federal programs, including special education services supported by the federal Individuals with Disabilities Education Act (IDEA) and compensatory education supported by the Title I program. Learn more about their school finance research. 

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Timeline of NY’s Fight for Fair and Adequate School Funding

The battle for an equitable and constitutional school funding formula began in the 1990s and has involved two major court cases and six different governors. The fight is still going on.


 

Year

Action

Governor

1993 

The Campaign for Fiscal Equity (CFE), a coalition of education stakeholders founded by Michael Rebell and Robert Jackson, files a lawsuit against the State of New York, claiming that the current education finance system results in the chronic underfunding of New York City public schools and denies students the opportunity for a sound basic education.

M. Cuomo

1995 

The Court of Appeals, New York’s highest court, denies the state’s motion to dismiss the case and allows CFE to proceed to trial to challenge the constitutionality of the New York State education financing system. 

G. Pataki

1995-1999

CFE undertakes pre-trial discovery and trial preparation. CFE and its allies conduct a statewide public engagement campaign to obtain student, parent, and public input on defining “sound basic education” and designing a constitutional school funding system that is equitable and adequate to meet all students’ needs.

G. Pataki

1999 

CFE v. State of New York trial begins.

G. Pataki

2001 

The trial court finds in favor of CFE, holding that the current state finance system in NYC denies students the opportunity for a sound basic education. The State of New York appeals the court’s decision.

G. Pataki

2002 

The Appellate Division reverses the trial court’s decision. In its decision, the court declares that New York is only responsible for providing an eighth-grade education. CFE appeals the court’s decision.

G. Pataki

2003 

The New York State Court of Appeals, the state’s highest court, reverses the Appellate Division and affirms the trial court’s initial ruling: the State of New York must provide a meaningful high school education and must reform its education finance system. The state is given a deadline of July 30, 2004, to (1) determine the actual cost of providing students the opportunity for a sound basic education; (2) develop a needs-based funding formula that provides the amount of funding needed for every school to provide its students the opportunity for a sound basic education and (3) create a system of accountability to ensure that every school is adequately funded.

G. Pataki

2004-2006 

The state fails to meet its court-ordered deadline. CFE seeks relief from the court to force the state to comply and is met with appeals from the state. When the Appellate Division orders the state to provide operating funding to New York City, Governor Pataki proposes a different methodology that was ultimately accepted by the Court of Appeals.

G. Pataki

2007

Governor Spitzer proposes, and the legislature enacts, a new “Foundation Aid” formula that will increase funding, mainly for New York City and other high-need districts, by approximately $5 billion when fully phased in after four years, without reducing aid to other districts.

E. Spitzer

2007-2008

The state increases state aid in accordance with the requirements for the first two years of the Foundation Aid phase-in.

E. Spitzer/
D. Paterson

2009

Citing the impact of the Great Recession of 2008, the state freezes the level of education funding and does not continue the required third-year phase-in of the Foundation Aid formula.

D. Paterson

2010 - 2014

Federal stimulus subsidies are eliminated, and the state begins to impose substantial decreases in education funding through the “Gap Elimination Adjustment” and other mechanisms. 

A. Cuomo

2014

A statewide coalition of major education advocacy and policy organizations, parents, and students known as New Yorkers for Students’ Educational Rights (NYSER) files a new lawsuit challenging the state’s failure to fully fund the Foundation Aid formula as a violation of the students’ rights to the opportunity for a sound basic education. 

A. Cuomo

2019

Senate Education Chair Shelley Mayer convenes a series of statewide forums collecting information on whether the Foundation Aid formula is meeting current student needs. 

The Board of Regents and the State Education Department (SED) request a legislative appropriation to study the Foundation Aid formula; the request is denied.

NYSER plaintiffs continue discovery and prepare for trial.

A. Cuomo

2020

The NYSER v. State of New York case is scheduled for trial.

A. Cuomo

2021

Kathy Hochul is appointed governor and agrees to settle the NYSER case. The state agrees to pay all outstanding funds due to schools under the Foundation Aid formula over the next three years. The plaintiffs agree that if the Foundation Aid formula is fully funded at the end of the three-year period, the case will be dismissed.  

K. Hochul

2022

CEE issues a report calling for the creation of an independent commission to develop a new constitutional school funding formula to replace the outdated Foundation Aid formula.

K. Hochul

2023

Foundation Aid is fully funded. The NYSER case is dismissed.

The Board of Regents and SED request a $1 million appropriation to allow them to hire national experts to help them develop a new Foundation Aid formula. Both houses of the legislature agree to provide the appropriation, but Governor Hochul refuses to approve the appropriation in the final budget negotiations.  

K. Hochul

Apr. 2024

The Board of Regents and SED again request a $1 million appropriation to allow them to hire national experts to help them develop a new Foundation Aid formula. Both houses of the legislature again agree to provide the appropriation, but Governor Hochul again refuses to approve the appropriation in the final budget negotiations.  

Instead, the governor induces the legislature to appropriate $2 million for the Rockefeller Institute to undertake a limited study of ways to improve aspects of the current Foundation Aid formula.

K. Hochul

Sept, 2024

Center for Educational Equity and American Institutes for Research announce the formation of the Adequate, Constitutional, Equitable (ACE) School Funding Project to begin to develop a constitutional school funding formula to replace the old Foundation Aid formula.

K. Hochul

Dec. 2024

The Rockefeller Institute is scheduled to issue its recommendations for modification of the current foundation aid formula.

CEE and AIR are scheduled to issue responsive recommendations and proposals.

K. Hochul

Jan.  2025

Governor Hochul is scheduled to issue her budget proposal for FY 2025-2026.

K. Hochul

Intended for:

This work is made possible thanks to the generous support of the Robin Hood and Schott Foundations.

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