Governor, stay the course for fair school funding
Last February, we asked on this page a rhetorical question: Who is against funding schools?
Then we answered ourselves: No one.
Progressives as well as conservatives, Democrats along with Republicans can all see the value of educating our youth. The future of our society and our democracy, our progress in the arts and sciences, all depend on good public education.
In this century, schools have taken on many duties once supplied by homes or by community institutions.
Schools provide mental-health care experts as well as social workers for students who require those services. Schools supply meals to students who otherwise wouldn’t eat. Schools provide a sense of community where it is lacking. The list goes on.
But the money that the state allocates for public education has to be apportioned fairly. We called, in February, for an examination of the state’s Foundation Aid formula.
The current formula was designed to account for what it costs a district to educate each student, with more money allocated for districts that have more economically disadvantaged students, or more students with disabilities, or more students from other countries learning English.
The formula also takes into account how much money a district can raise locally.
But the formula had become outdated since it was established in 2007. During last year’s state budget process a hot-button issue was the governor’s proposal to partially reduce the “hold harmless” or “save harmless” provision, which allows a school district with declining enrollment to still continue to get the same amount in state aid.
Ultimately, legislators pushed back to preserve hold harmless and this school year the funding continued but an investigation by the Rockefeller Institute of Government was to take a deep look at the Foundation Aid formula to make recommendations for the upcoming year’s budget.
That report was released on Dec. 2.
We believe legislators and the governor may well heed some of the report’s recommendations for more accurate weightings for English Language Learners, updating poverty data, and better determining regional costs as well as including in the funding equation tasks not expected of schools in 2007.
The report, filled with data, makes a cogent argument in favor of Hochul’s original proposal on save harmless.
But now, the governor is backing away from that. In a statement to The Enterprise, her office said, “As we craft the upcoming Executive Budget, the Governor believes we should avoid proposals that would negatively impact school budgets, such as eliminating the hold-harmless provision of the Foundation Aid formula.”
We urge the governor instead to stay the course. What is popular is not always what is best.
Leaders from the state’s school boards association and also from the state’s biggest teachers’ union pushed last year to preserve hold harmless. They used this example: If the number of students in a class decreases from, say, 25 to 23, the same resources are still needed. This, of course, is true.
But, what if, over the years, enrollment has plummeted?
A local example is the rural Berne-Knox-Westerlo school district where enrollment has fallen from 1,100 students in 2005 to just 655 students this year.
We ran a top-of-the-front-page story last week on the stellar standardized test results at BKW so we believe the money is being well spent. The small class sizes as well as admirable ratios for counselors allow students to succeed.
In an ideal world, every student would have the resources to succeed. But what if those resources are limited?
The goal then should be to allocate the available funds fairly.
The Rockefeller Institute report notes that New York state spent $29,873 per pupil on K-12 education in 2022, more than any other state in the nation and almost double the national average of $15,633. Meanwhile, enrollment in the last decade has dropped 10 percent statewide.
A single page of the report has two graphs that vividly illustrate these trends.
From 2012 to 2022, a graph on state expenditures on education shows a steady line up from $60 billion to $85 billion while the graph on public-school enrollment for that same decade shows a steady decline from 2,700,000 to 2,400,000.
As more people leave New York state, some of them because of high taxes, the trend for declining enrollment is likely to continue. The report shows that some states, like Vermont and Hawaii, count on local property taxes for only 5 percent or less of school funding.
In New York, however, local property taxes pay for the majority of public school expenses. And next year, with Donald Trump threatening to do away with the U.S. Department of Education, it is not clear that New York schools will be able to count on even the less than 10 percent they currently receive for public education.
The Rockefeller Institute report also notes the wide disparity in funding among districts statewide with per-pupil spending ranging from less than $20,000 in some districts to over $80,000 in others.
Hochul’s budget proposal last year noted that three-quarters of the state’s school districts that would be affected by discontinuing hold-harmless payments had lost 20 percent or more of their students with no loss in aid, and that the practice caused aid to flow to districts that may not need it as much as others
“Some districts that might not have been higher need before, now have higher need,” Hochul said. “I want to make sure I have the flexibility to take care of the high-need school districts.”
The Rockefeller Institute, which held five statewide hearings, notes testimony from the Citizens Budget Committee, a non-partisan, not-for-profit think tank, saying, “The hold harmless provision has led to some jarring outcomes. Most striking perhaps, in 17 districts whose enrollment has declined at least 40 percent since 2008, per-student Foundation Aid increased an average of 162 percent over that period, compared to an average of 115 percent in all other districts.”
The Citizens Budget Committee recommended, “Quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.”
The Rockefeller Institute report also cites testimony from Robert Lowry, deputy director at the New York State Council of School Superintendents, that, among the 35 percent of districts on hold harmless, 18 percent of that hold-harmless funding, about $67.5 million, is currently allocated to low-need, or wealthy, districts.
The report notes that 89 percent of districts across the state have fewer pupils now than they did a decade ago with just 6 percent seeing student enrollment increase at least 5 percent over the same 10 years. In other words, the vast majority of districts could soon become eligible for hold harmless.
The Rockefeller Institute also looked at school districts that have more in their unrestricted fund balances, or rainy-day accounts, than the 4 percent of the coming year’s budget allowed by the state. Over 200 districts exceed that threshold and $136 million in hold-harmless payments go to those districts.
Further, about $59 million of that total was paid to districts with rainy-day accounts greater than 10 percent of the coming year’s budget.
The report says, too, that hold-harmless payments may keep neighboring districts with declining enrollments from merging or regionalizing “denying students the enhancements in educational experiences that could result from such consolidations.”
The Rockefeller Institute calls Hochul’s initial proposal for save harmless “thoughtful and progressive” and a model for better serving students in high-needs, low-wealth districts.
The institute recommends establishing a threshold for local wealth to determine which districts should still get hold-harmless funds as the funds are phased out over five years for the 18 percent of wealthy districts currently receiving the funds.
“Markers could be established for sizable multiyear enrollment losses that would require school districts to accept reductions in scheduled Save Harmless payments, particularly if these districts maintain large reserves,” the institute recommends.
It gives, as an example, a district that lost 15 percent of its students over a decade and that has a rainy-day account over 4 percent being required to apply the excess above 4 percent as an offset against hold-harmless payments.
Districts with rainy-day accounts greater than 10 percent, the center recommends, could be required to apply the overage as an offset against the hold-harmless payments.
The report also recommends hold-harmless payments scheduled for wealthy districts that have lost students be redistributed to lower-wealth districts with enrollment increases.
Finally, the Rockefeller Institute recommends capping the reduction faced by any district at 50 percent of its scheduled hold-harmless payment for all but the wealthiest districts and prorating how large a portion of the scheduled payment it can retain based on a measure of its per-pupil income and property wealth.
So schools in need that now receive hold-harmless funds would not suddenly be without all that added support. Funding would be retained based on property wealth and per-pupil income.
These recommendations help distribute finite resources fairly.
We urge the governor to return to her “thoughtful and progressive” approach and the legislators to follow suit. What, after all, is the point of commissioning a study if its recommendations are ignored?
The governor’s statement says she wants to “avoid proposals that negatively impact school budgets.” With finite funds, some school budgets will, indeed, be impacted. The goal is to be sure the available state funds are equitably distributed.
Maintaining hold harmless as it now exists does not do that.
“This study’s comprehensive findings,” the statement from Hochul’s office went on, “will help inform ongoing discussions with the Legislature and key stakeholders about how we better align our spending to meet the needs of future generations of students.”
A good place to start in aligning spending to meet student needs is to follow the Rockefeller Institute’s recommendations on hold harmless.