Background
Information
This proposal
represents the third year in a proposal to establish a foundation aid program
that adjusts for differences in school district pupil needs and regional
costs. Its goal is to close the
achievement gap in a manner that is adequate, effective and efficient.
Recommendation
The Regents
should discuss alternatives and recommend improvements to further develop their
conceptual proposal on State Aid.
Timetable for Implementation
Once the Regents approve their State Aid
proposal, they will have the opportunity to advocate for its inclusion in the
Executive’s budget proposal and in enactment of the Legislative budget signed
into law by the Governor. Once
school funding is in place, the Department will continue to work with school
districts on the most cost-effective practices to raise student achievement so
that virtually all students meet State learning
standards.
Regents Proposal on State Aid to School
Districts
For School Year 2006-07
CONCEPTUAL PROPOSAL
The Regents State Aid proposal for 2006-07 will
request the resources and funding system needed to provide adequate resources
through a State and local partnership so that all students have the opportunity
to achieve State learning standards.
This is the third year of a multi-year proposal recommending transition
to a foundation program based on the costs of successful educational
programs.
Statement of Need
This proposal pursues two Regents goals: to close the gap between actual
and desired student achievement; and to ensure that public education resources
are adequate and used by school districts effectively and
efficiently.
The Regents annual report to the Legislature and Governor on the
educational status of the State’s schools cites numerous examples of improvement
in student achievement since 1996 when the Regents began to raise standards for
all grade levels and imposed graduation requirements aligned with the new
standards. For example, the report
notes:
Since the implementation
of higher graduation requirements in 1996, the percentage of public school
graduates earning Regents diplomas increased from 42 to 56
percent.
The number of public
school students participating in Advanced Placement examinations has nearly
doubled since 1992. There were
almost twice as many Black, Asian, and Hispanic candidates in 2003 as in
1992.
The mean SAT composite
score for the class of 2003 was 18 points higher than the mean for the class of
1993.
In 2003, 64 percent of
fourth-graders in public schools met the standards in English language arts, an
increase of 15 percentage points over 1999. Seventy-nine percent of fourth-graders
met the standards in mathematics in 2003, compared with 67 percent in
1999.
Despite these improvements, the
report notes continuing, serious challenges. It says:
These signs of progress are encouraging, but too many
students and schools have not yet shared in these successes. These, by and large, are schools faced
with the challenge of educating large numbers of children placed at risk by
poverty, the inability to speak English well, and recent immigration. Throughout
this report, in fact, we document a dismaying alignment of disadvantaged
students (disproportionately racial/ethnic minorities), schools with the
poorest educational resources (fiscal and human), and substandard
achievement. Conversely, we find
that those schools that serve the fewest at-risk children have the greatest
financial resources, teachers with the best credentials, and the highest levels
of achievement.
Figure 1 shows
that the State Aid increase school districts have experienced has not affected
appreciably the share of State Aid that each district category receives. Despite
increases to high need school districts, the relative share of education
revenues received by high need city school districts has increased by
approximately one to three percentage points over the past eight years. The relative share declined for high
need rural school districts (almost one percentage point), average need school
districts (approximately three and a half percentage points), and for low need
school districts (about half a percentage point).
Four principles guide this Regents
proposal. They
include:
- Adequacy—Effective distribution across all
districts will ensure adequate resources for acceptable student achievement.
- Equity—School funding will equalize differences
in school districts’ fiscal capacity, pupil need and regional costs to
maintain comparable levels of local effort in school districts across the
State.
- Accountability—The education system will
measure outcomes and use those measures to ensure that financial resources are
used effectively. As part of the
Regents goal that education resources will be used or maintained in the public
interest, the Regents employ a two-prong strategy. The Department will give greater
flexibility to districts with acceptable student achievement and will
encourage the most efficient and effective use of resources in districts not
yet meeting State standards.
- Balance--The State should balance stability in
funding and targeting aid to close student achievement gaps. It should drive aid based on current
needs, and use hold-harmless provisions to provide
stability.
The Regents recommend changes in the following
focus areas for their 2006-07 proposal.
Enact a Foundation Program
The proposed foundation aid would consolidate
approximately 30 existing aid programs and adjust for regional cost differences
and pupil needs. It would identify
an expected local contribution for each school district, based on ability to
pay. The foundation level is based
on the cost of educating students in successful school districts.
The proposal for a foundation program represents
a dramatic simplification over the current system. It would replace approximately 30
different aid programs, each with many different components or aid
drivers, with one formula with four moving parts.
The
foundation formula is based on the cost of educating students in
successful school districts, adjusted for regional cost differences and
differences in each district’s concentration of needy pupils. An expected local contribution is
calculated based on each district’s actual value per pupil, adjusted by income
per pupil. State Aid is calculated
as the foundation cost less the expected local contribution. The proposal would hold school districts
harmless against loss for the group of aids combined into Foundation Aid and
would be phased in over a multi-year period.
The
Foundation Formula approach has several advantages. It sets aid independent of any decisions
by districts on how much to spend.
It also provides certainty to districts regarding how much funding they
will receive. And, most
significantly, it explicitly links school funding to the cost of educating
children and drives dollars where they are most needed.
Special Education
Funding
The Regents explored options for improving the
funding of special education in a series of meetings around the State with
educators and the public.
Participants considered how funding can best support program goals of
improved student achievement and education of students with disabilities in the
least restrictive environment.
Three options were discussed that provide special education funding
separate from the foundation program and respond to policy concerns voiced at
public forums on special education funding.
Understanding a proposal
requires understanding the existing system that is to be changed. Current laws provide school
districts State Aid to help meet the excess costs of educating students with
disabilities--that is, districts receive operating aid for each student
including those with disabilities, and, in addition, excess cost aid for those
costs that are above and beyond the costs of a non-disabled student. In addition, the laws provide:
- That
excess cost aid be wealth-equalized but require a substantial local
contribution;
- That
excess cost aid be based on the average spending on all students in the
district but provide more aid for higher levels of service to students with
disabilities;
- A
substantial minimum aid, regardless of wealth;
- Extra
aid for high cost students and students integrated with their nondisabled
peers; and
- Aid
for students with disabilities placed in approved nonpublic special education
schools.
The proposed approach
maintains a separate special education funding stream based on a count of
students with disabilities. It
aligns that funding with the Regents proposal for foundation aid for general
education instruction.
The proposal is this:
Calculate the foundation amount for general education students (e.g., General
Education Foundation Cost x Pupil Needs Index x Regional Cost Index). This would
be divided into an expected local contribution and State Aid in order to provide
support for general education instruction, as it was proposed in the 2004-05 and
2005-06 Regents State Aid proposals.
For Public Excess Cost Aid,
that same foundation amount would be multiplied by a single weighting for all
classified students with disabilities to determine an expense upon which to base
excess cost aid per pupil. Thus,
each student with a disability would generate operating aid based on a portion
of the general education foundation amount and, separately, excess cost aid
based on a portion of the special education weighted general education
foundation amount. The excess cost aid would be tied to the cost of education in
successful districts by basing it on the foundation amount from our original
successful schools study. High cost aid and private excess cost aid could be
continued separately and the Regents proposal for a current-year aid for new
high cost students with disabilities would be carried
forward.
The following is an example of
this proposal in a hypothetical school district. The amounts used are made up
and are intended to illustrate how the formula would work and not its specific
details.
Calculate the foundation
amount for general education students (e.g., $1,000 x Pupil Needs Index x
Regional Cost Index or by example a district with moderate pupil needs and
moderate costs, $1,000 x 1.5 x 1.2 = $1,800/pupil). Divide this into State Aid
and an expected local contribution to provide State support for general
education instruction. For this
hypothetical school district, assume the expected local contribution was $1,000
per pupil and State Aid was $800 per pupil.
Take the same foundation
amount ($1,800/pupil) multiplied by a single weighting for all classified
students with disabilities to determine excess cost expense per pupil. (For
example, $1,800 x 1.1 = $1,980 of excess cost expense per special education
pupil.) A state and local share of
this expense can then be calculated.
Thus, each student with a disability would generate foundation aid and
excess cost aid.
Strengthen Accountability for the Use of
Funds
The Regents have examined ways to strengthen the
education system to be able to answer the question: How do we know if resources
are well spent? They recommend
continued support for state-of-the-art systems for processing State Aid and
gathering and reporting information on students and resources. They recommend a strengthened State
Education Department capacity to provide technical assistance to school
districts in fiscal or programmatic crisis and to audit school districts. They have reviewed statutory and/or
regulatory barriers to improving student achievement and have made
recommendations for removing them in a separate legislative proposal on
streamlining school district planning and reporting.
Specific recommendations are as
follows:
A.
Financial Condition
Indicator System. The
State must also improve data and information systems to support school
improvement. The State needs a
school district financial indicator system (“FCIS”) that would ensure proper
stewardship of dollars that pay for public education. The FCIS would include an early warning
system for school districts to prevent financial distress; fiscal benchmarks and
best financial practices; a public reporting tool providing information about
the management of public funds to achieve educational goals; and a long-range
financial planning tool for school districts.
Currently no
such system exists. The
Department’s Office of Audit Services collects data to assess the short-run
financial condition of school districts, but this does not assess long-term
financial condition and cannot be used as a tool for long-range planning by
school districts. Information that
is currently available on school district finances does not incorporate
professional judgments so the public lacks the necessary knowledge to interpret
fiscal data.
B.
Student Data
Information System. A
statewide student data system must be implemented to assess if reform is taking
root. SED has already begun to
build such a system, which will create greater capacity to track students,
measure their progress, and thus raise the achievement of all students in New
York. These efforts could be
accelerated with additional funds.
The current system can only analyze information for entire groups of
students, but the tracking of individual students over time will allow us to
follow individual students through the system and analyze the effectiveness of
State strategies and programs. For
example, we will be able to measure the benefit of using smaller class sizes
with certain groups of students. Such programs often involve the allocation of
billions of education dollars without reliable data on their impact on student
achievement. An individual record
system will also help us to better meet many federal reporting requirements,
including those of NCLB.
C. State Aid
and Grants Management Systems.
The Regents are implementing a unified State Aid management
system to address the shortcomings of the current system. This improved system would provide a
single point of access to all State Aid data, and be capable of analyzing
districts’ fiscal needs. It would
enable SED to more effectively collect information from school districts across
the State, and would streamline the method for distributing to districts State
and federal funds. The proposed
system would provide timely feedback to users in school districts and SED and
would facilitate modeling of State Aid formulae for the Legislature and
Executive Branch. The current system is a mix of older systems that are not
efficient, flexible or as exacting as the proposed system.
An improved
data system would include two final components: an update of the web-based
system to improve the efficiency of the grant awards process and provide
improved reporting capability, and the elimination of redundant State reporting
requirements, freeing districts to engage in more comprehensive planning and
reporting. Streamlining plans,
applications and reports that school districts submit to SED will reduce
administrative burden and increase the focus of planning and reporting to
support real gains in student achievement.
A uniform
system of State accountability must use accurate, consistent and trustworthy
data on local finances, demographic information and indicators of student
performance that can be validly compared across districts of the State. Such a system contributes to equal
educational opportunity for all by ensuring that policy decisions are
data-driven and equitably applied.
Approximately
$16 billion in State Aid is devoted to public schools in New York State, and
that sum is primarily allocated on the basis of information provided by the
districts themselves. If aid is to
be distributed appropriately, that information must be accurate and
verifiable. In order to ensure
this, the State Education Department staff must implement a rigorous data
quality assurance program.
The Regents
Plan calls for enhanced State oversight of school district fiscal transactions
to ensure the integrity of district finances. SED would significantly expand its
current audit capacity to: conduct more random audits of districts that have no
known problems or issues; focus more resources on districts with indications of
poor student performance, fiscal stress, or inadequate management controls; and
conduct more frequent audits of school districts and review of school district
financial statements. Recent
legislation calls for strengthening protocols for annual school district
independent audits conducted by CPAs, requirements for an internal audit
function in school districts and the establishment of audit committees to help
the board review and assess school district internal control procedures, as well
as increased training on the fiscal oversight responsibilities of school
officials.
Regional Services for the Big Five City School
Districts
This proposal recommends that the existing
practice of excluding large city school districts from accessing BOCES services
be discontinued. It recommends that
the large four city school districts (Yonkers, Rochester, Syracuse and Buffalo)
be given the authority to contract with neighboring BOCES for services in
critical service areas that are strong in BOCES and weak in the city
district.
A program should be established authorizing the
Big Four city school districts to participate in BOCES and purchase services
from BOCES. A corresponding
increase in aid should be provided to the New York City school district to allow
them to fund similar programs within the city district. Such regional services can
include:
- Arts and cultural programs for
students;
- Career and technical programs for
students;
- Alternative education for students including
those who are in secure and non-secure detention centers within the city
boundaries;
- Staff development as part of a district
required professional development plan and annual professional performance
review;
- Technology services provided through
BOCES;
- Regional teacher certification;
and
- For the 2006-07 school year, planning and
development activities necessary to implement these programs in the following
school year.
For the New
York City school district, the enriched Special Services Aid would be provided
to support regional services in critical need areas within the city school
district.
Strengthening Preschool Education
In the spring of 2005, the Board of Regents
approved going forth with the development of a strong early education
policy. Among other items, it is
expected to call for full access to high quality pre-kindergarten programs for
all four-year-olds. A strong
statewide pre-kindergarten program will be key to establishing a sound
foundation for closing the achievement gap. Strong pre-kindergarten programs will
provide advantages for preschool students with disabilities to get services
integrated with their nondisabled peers.
Establishing pre-kindergarten as a child’s first year of public education
is needed to ensure that all children attain skills necessary for a successful
academic experience. In order for
the Board of Regents to attain its goal of achieving a statewide
pre-kindergarten program, the State Aid formula must be examined to establish
the funding necessary for all districts.
The State Aid formula must seek a way to establish funding for districts
in support of Regents policy.
Need For Statewide
Pre-kindergarten Programs
The need for statewide pre-k programs is evident in the following
facts:
- Currently only 73,500 (30 percent) of
approximately 250,000 four-year-olds are in State-funded pre-kindergarten
programs (BEDS data)
- Eighty percent of all four-year-olds are
in placements outside of the home (Human Services Policy Center,
2004)
- Six hundred twenty-three of 680 school
districts (92 percent) have full-day kindergarten or offer full-day
kindergarten
- Early childhood investment pays off (Clive
Belfield Study; NYS Experimental Pre-k Study; etc.)
- Early Education Pre-k closes the gap
(Rochester Children’s Institute)
Status of Regents Policy
Paper
The Regents are currently
revising their early childhood policy.
Staff are on target for a July draft to the Regents. The draft policy will be disseminated to
the field (principals, pre-k directors); organizations (NYSUT, NYSSBA, NYSAEYC,
SCAA, IHE); departments in SED (VESID, Higher Ed, Teacher Cert, State Aid Work
Group). The Regents will consider
adoption of the policy in December 2005.
Policy
Directions
- Require attendance in full-day
kindergarten.
- Fully fund pre-kindergarten education with
a separate foundation-like aid formula, separate from K-12 funding, that
allows school districts to contract with private providers.
Early Childhood Education
Funding Issues
In order to support the move
to universal access to pre-k and quality early childhood education, the Regents
support aligning funding for pre-kindergarten education programs with the
Regents Foundation Aid proposal for elementary and secondary education
programs.
Because the majority of pre-k
programs are operated by private providers including community-based
organizations, and because attendance in
pre-kindergarten is not mandatory, a consolidation of funding for pre-k programs
and funding for elementary and secondary education programs is neither practical
nor desirable.
Funding
Directions
A more practical direction
that is compatible with the Regents goal of providing a simplified and adequate
funding stream for educational programs, while emphasizing the importance of
early childhood education, is to propose two parallel funding programs:
one to support pre-k programs and one to support K-12 elementary and
secondary education.
For example, pre-k grants can
be appropriated based on a State share of the general education foundation
amount multiplied by a count of pre-k pupils. Grants between school districts
and private providers would provide a portion of these funds to nonpublic
program providers.
The advantage of an early
childhood education funding stream, compared with a pre-k-12 funding stream, is
that it focuses public and school district attention on the importance of early
childhood education. It targets
funding for those programs, helping school districts to support these programs
in times of fiscal stress. Care
will be taken to balance the need for sustainability of State and local support
for quality early childhood education programs with the long-term cost savings
that these programs provide.
Enrollment trends and facilities needs will be considered as pre-k
programs grow.
Simplified Cost
Allowance for State Building Aid
The Regents recommend that the
State simplify the maximum cost allowance formula for State Building Aid. The
State sets a reasonable cost ceiling for all capital projects. The current
system is an overly complex and inefficient process that, in some cases, forces
a district to compromise the desired educational goal in order to achieve
maximum reimbursement. It is proposed that the State calculate a cost allowance
based on a certain allotment of space and cost per enrolled pupil, according to
the following formula:
Cost Allowance = Projected Pupil Enrollment
x Allowed Square Feet
Per Pupil x Allowed Cost per Square Foot x
Regional Cost Factor
Allowable costs would be updated
monthly by the current New York State Labor Department Cost Index. Unlike the
Regents Regional Cost Index proposed for Foundation Aid, which is fundamentally
a professional wage index, the New York State Labor Department cost index is
based solely on the wages of three major occupational titles critical to the
building industry. A
simplified formula would offer greater educational flexibility, ease of
understanding and transparency.
