sed seal                                                                                                             

 

 

THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

 

TO:

State Aid Subcommittee

FROM:

Johanna Duncan-Poitier

SUBJECT:

2010-11 Regents State Aid Proposal: Foundation Aid Principles and High School Regionalization

 

DATE:

June 12,  2009

 

STRATEGIC GOAL:

1, 2, 3 and 5

AUTHORIZATION(S):

 

 

SUMMARY

 

Issue for Discussion

 

              To   review the guiding principles for Foundation Aid; to continue the discussion of maximizing school district resources by considering information relating to regionalization of high schools.

 

Reason(s) for Consideration

 

                For information.

 

Proposed Handling

 

This item will be discussed at the State Aid Subcommittee meeting in June 2009.

 

Procedural History

 

                The Regents have been discussing ideas to maximize school district resources--improving achievement and containing costs.  In light of the continuing deep economic crisis the State is experiencing, the Regents have requested that staff continue to develop the theme of maximizing resources and promoting efficiencies as they begin considering their 2010-11 proposal on State Aid to school districts.  In the coming months, staff expects to engage the Regents in discussions about preserving Foundation Aid, increasing the effective use of BOCES Aid, fostering green building construction and other efficiencies in school construction that will explore ways to maximize school district resources while pursuing educational adequacy. 

                At the June meeting, staff will discuss with the Regents:

 

Background Information

 

The Regents proposed and the State enacted in 2007-08, a four-year plan to phase in a new Foundation Aid formula to achieve educational adequacy for all school districts.  The State funded the first two years of the plan and then has frozen aid for the third and fourth years because of the economic recession.  The federal government has provided stimulus funds under the American Recovery and Reinvestment Act of 2009 which the State has used to restore cuts proposed by the Governor.  The challenge before the Regents is to advance a proposal that continues progress in reducing the achievement gap and increasing learning by all students during these difficult economic times.

 

Recommendation

 

Not applicable.

 

Timetable for Implementation

 

The Regents will consider aspects of their proposal over the coming months and will review a draft full conceptual proposal in November.   In December the Regents will consider details on the amount and distribution of funds to recommend to the Governor and Legislature and will act to approve their State Aid proposal.


2010-11 Regents State Aid Proposal:

Foundation Aid Principles and High School Regionalization

 

Table of Contents

 PAGE 

 

Memo to Board of Regents   ...................................................................................................... 1

 

Attachment A:  .............................................................................................................................. 4

 

Foundation Aid Principles

 

Attachment B:  .............................................................................................................................. 5

School District Reorganization and Regional High School

 

References  .......................................................................................................................... 18

 

Appendix I:  .......................................................................................................................... 19

Details on the School District Reorganization Process

 

Appendix II:  .......................................................................................................................... 21

2006-07 Expenditure per Pupil by Need Resource Category/Geographic Region

 

Attachment C:  ........................................................................................................................... 22

State Aid Work Group Plan: Regents Proposal for State Aid
to School Districts For School Year 2010-11

 

             

 


ATTACHMENT A

Foundation Aid Principles

For School Year 2010-11

 

 

Staff propose that four principles continue to guide this Regents proposal.  In response to a bleak and worsening revenue picture resulting from the international economic crisis, the State has frozen Foundation Aid for the 2009-10 and 2010-11 school years.  It continues to honor commitments to expense-based aids like Building Aid and BOCES Aid that helps districts with expenses they have already incurred.  During difficult economic times adhering to these principles is very important.

Adequacy— Ensure that all districts have the resources to give all students the opportunity to achieve, at minimum, State level proficiency.

Equity—The funding system must be fair for all students and taxpayers.  State resources should be allocated on the basis of student needs, fiscal capacity, and cost.

Accountability and Transparency—The education system will measure outcomes and use those measures to ensure that financial resources are used effectively.  The Regents will employ a two-pronged strategy to ensure education resources will be used or maintained in the public interest.  The Department will give greater flexibility to districts with acceptable student achievement, while working closely with districts not yet meeting State standards.  Measures of student achievement and district expenditures should be accessible and transparent.

Stability—The State should balance stability in funding with targeting aid to close student achievement gaps.  It should drive aid based on current needs, while establishing reasonable amounts of hold-harmless aid to provide stability.

 

 

Policy Questions for Discussion

 

 


ATTACHMENT B

 

 

School District Reorganization
and Regional High Schools

 

 

 

Subsequent to a review of 2008 statewide commission reports on property tax relief and local government efficiency and competiveness, the Regents began a review of proposals to maximize school resources through the regionalization of educational and ancillary services. Possible strategies include regionalization of high schools, both rural and suburban; regional student transportation services; and the expansion of central business office services provided by BOCES and serving two or more school districts.

 

 

This paper will review statewide reorganization efforts and explore the potential benefits of regional high schools by investigating the following questions:

 

 

 

 

 

Brief History of Reorganization: A Context for High School Regionalization

 

School district boundaries are established in law and are not co-terminus with county lines. In fact more than a dozen school districts have territory in as many as four counties.  A large number of reorganizations have occurred in New York State since 1870 when there were approximately 11,400 school districts.  By 1940 there were about 6,400 districts, in 1980 fewer than 740 districts, and by 2000, about 700 districts in the State. See Figure 1.  As of July 2007, New York State had a student enrollment of 2,715,068 in 698 school districts.

The process of school district reorganization encompasses consolidations, mergers and annexations. Appendix I delineates the range of procedures covered by the term reorganization.

  

The Commissioner of Education’s powers for restructuring school districts are currently limited to proposing and overseeing reorganizations.  The 2008 Executive Commission reports made recommendations to change State law and grant the Commissioner powers not currently held, such as ordering reorganization for school districts with certain characteristics.  Historically and presently, some type of local approval, such as a vote, a permissive referendum, and/or board approval is required in all reorganizations. 

 

Figure 1:  History of School District Reorganization Since 1870

Map of NYS School Districts by enrollment Fiscal Year 06-07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Although the Commissioner may propose reorganization at any time, he only does so after:

 

Once the Commissioner has proposed a reorganization, the steps vary depending on the type of reorganization.  See Appendix I. Under this existing legal framework, the State has experienced on average only about one merger or annexation of districts every other year for the last decade. 

 

The map displayed in Figure 2 reveals that more than half (58.5 percent) of the State’s school districts have fewer than 2,000 pupils and that over 200 districts (the groups of districts in dark pink) have fewer than 1,000 pupils. They are largely in the Southern Tier and North Country regions of the State, although they are represented on Long Island as well.  Of these 200 districts, there are 65 which have enrollments of fewer than 500 students.

 

Rural high schools have an average of 424 pupils, while non-rural districts, i.e., suburban and cities, have 991.  Thirty districts tuition their students to another district.  One operates only a k-two program; two a k-four. There are three central high school districts in Nassau County which serve students in grades seven to twelve only. 

 

 

Potential Cost Savings Related to Reorganization: 

              Are there parallels to cost savings to be gained from regionalization of high              schools?

The actual cost of educating students across New York State varies widely depending on several variables, including student need and regional cost differences, e.g., salaries, facility costs, and other educational and related costs. Per pupil expenditures are displayed in Appendix II by Need/Resource Capacity (NRC) and geographic region of the state.  Any potential cost savings to be gained by implementing a regional approach to high schools in rural areas is framed by data that shows rural districts already tend to spend less than many other geographic regions of the state. However, the average costs shown for rural districts minimize the very high per pupil costs found in some extremely small districts, such as remote towns in the Adirondacks.

The question of whether there are cost savings from high school regionalization is debatable, since studies have examined cost savings resulting from reorganization of districts and did not specifically address the combining of high schools. However, regionalization can be discussed in relation to merging of districts, which remains an important issue in state educational policy.

 

State Education Department staff studied potential cost savings in 1992 in a paper titled Analysis of Change in Expenditure Following School District Reorganization.  The study reviewed the rich aid incentives associated with reorganization, as well as other factors, such as additional Regents requirements and facility needs, resulting in an increased number of reorganizations in the mid to late 1980s.  Reorganization Incentive Operating Aid which the State provides to reorganized school districts doubled from ten percent to 20 percent during this period. As operating aid is wealth equalized, there was a much more immediate benefit from reorganization available to low wealth districts than to high wealth school districts. Therefore, while costs to district residents may have lowered due to reduced tax rates, there is not evidence that overall expenditures were lower. Alternatively, in four of the reorganizations, expenditures were at least five percent higher than county or regional averages, and as much as 21 percent higher.  In every case studied, reorganized districts leveled up teacher salaries such that the higher salary schedule was applied to the new district.  In addition, expenditures from debt


Chart - Enriched high school course offerings, rual vs. Merto New York School districs, SY 2001-02


 service were a contributing factor as reorganized districts began  building and renovation projects, in addition to aid for expanded instructional costs. Overall, based on the limited data it was concluded that expenditures were not reduced as a result of school district reorganization. However, local residents did pay fewer taxes largely due to reorganization incentive aid for both general operations and construction or renovation. 

 

Duncombe and Yinger’s (2000) study examined the cost implications of 12 pairs of rural school district reorganizations within the State from 1985-1997 (including some of the above districts). All other rural school districts served as the comparison group. Factors including student performance and teacher salaries were held constant. Findings indicated that reorganizations did cut costs for small, rural school districts and the savings appear to be driven almost entirely by economies of scale. Initial increased spending was offset by later cost savings. They concluded that reorganization is likely to cut the costs of two 300-pupil districts by over 20 percent; two 900-pupil districts by seven to nine percent; and would have little if any net impact on the costs of two 1,500 pupil districts that reorganized. The study concluded that cost impacts of reorganization can be evaluated and shown to significantly lower costs in certain school districts.  It recommended that a state program should encourage reorganization among small, rural school districts, but eliminate financial incentives for reorganization of other types of school districts. It proposed that future studies consider the impact of reorganization on students’ commuting times and on measures of student performance other than test scores.

 

 

Executive Commission Reports

 

Executive Commission reports, issued in 2008 by blue ribbon panels, both came to the conclusion that small school districts should reorganize.  One panel was led by former Lieutenant Governor Stan Lundine on Local Government Efficiency and Competitiveness, and the other by Nassau County Executive Thomas Suozzi, on Property Tax Relief.

 

The Lundine report recommended:

 

 

The report of the Suozzi Commission made similar recommendations, including: 

 

 

 

Economy of scale has been identified as one barrier to the efficient delivery of adequate and necessary educational programming.  A possible remedy therefore is to deliver services at a larger level of geography. Two county wide districts in suburban Washington, D.C. have undertaken such a large scale reorganization effort.  While the ability to generalize from these large, wealthy county-wide suburban districts is not uniformly possible for several reasons, especially when discussing rural, less affluent non-county wide districts, members of the Regents Subcommittee on State Aid specifically requested that staff examine these two systems to ascertain what information may be applicable.

 

Fairfax County, Virginia

 

Fairfax County, with a population of just over one million residents is located in the northern Virginia suburbs of Washington, D.C.  The school district converted to a cluster system in 1993.  With an enrollment of 164,000 pupils, they estimated they will spend $13,407 per pupil in fiscal year 2008.  There are eight groupings in the cluster: three high schools, three middle schools, and 11-16 elementary schools, and one to two special schools.  The cluster structure enabled district officials to implement the following improvements in the cost-effective delivery of educational services:

     

 

 

Montgomery County, Maryland

 

Montgomery County, Maryland is primarily a wealthy county, with pockets of poverty, and has approximately 875,000 residents. Like Fairfax County, its county and school district boundaries are coterminous.  The county pursued desegregation and equitable school funding by implementing a county-wide educational system. Key reform efforts have narrowed the achievement gap at the elementary levels and are underway at the middle and high school levels. Reform efforts include:

 

 

Regional High School Efforts in New York State

New York State has a historical context for suburban regional high school development. 

 

Nassau County

 

In February of 1925, in response to a voter petition, the Commissioner authorized the creation of a   Central High School District in Valley Stream.  This was made possible by a 1917 provision of law legalizing the formation of central high school districts, serving grades seven to twelve, by residents of two or more adjacent elementary school districts. Residents created a limited number of such districts throughout the State before the law was revoked in 1944, as an ineffective form of reorganization, and replaced by a provision for centralization on a K-12 basis. The other two Nassau County central high school districts that residents formed, and which are still in existence, are Sewanhaka and Bellmore-Merrick.

 

Suffolk County

 

The law authorizing Central High School Districts, revoked in 1944, was reinstated in 1981 to enable the formation of a central high school district in Suffolk County only. In 1999, one school district was formed from the reorganization of two local districts, Eastport Union Free School District and South Manor Union Free School District.  This was viewed, by some, as an ineffective form of reorganization because it created more districts while the Master Plans for School District Reorganization in New York State of 1948 and 1957 call for a reduction in the number of districts.  The Master Plans promote combining small districts to result in larger districts containing a stronger tax base and enlarged pupil population to establish more effective and economic districts.

 

Tech Valley High

 

Tech Valley High, located in the Capital Region, was created in 2007 to provide students with a program emphasizing math, science and technol­ogy. Currently about 75 students attend this BOCES operated and aided program. Regents and/or Advanced Regents Diplomas are awarded by the home school district. Many students also take courses that qualify them for college credits. All eighth grade students from participating component districts can apply, however space is limited. In addition to BOCES aid, the school receives grants and professional development provided by private-sector sources, including the Gates Foundation. The school also partners with educators in all grade levels, businesses, organized labor, the government and colleges. Busing is provided by the home district and students may continue to be involved in playing sports in their home districts.

 

Inter-district Collaboration through Tuitioning High School Students

School districts may admit nonresident students based on terms specified in district policy and including the payment of tuition by parents or guardians. Commissioner’s regulations (Education Law sections 1709(3), (13; 3202(2); 8NYCRR Part 174) provide a formula for the calculation of tuition.  School districts can, under existing law, tuition to another district, thus creating another option for a regional high school.  The tuitioning of an entire grade of students (such as all the twelfth graders) requires a positive vote of the residents of the district.

 

Regionalization of High Schools in Rural Counties:

 

              Will regionalization lead to increased educational opportunities, such as,      greater access to enriched coursework?

 

While there is a national debate about the relative merit of large schools versus small schools, the student achievement results of rural school districts in New York State have been generally positive.  However, declining enrollments and tax bases in rural New York State have caused rural communities to be concerned about the very existence of their schools and by extension their communities.

     

Declining enrollments and tax bases are important insofar as they are measures of fiscal capacity and proxies for economic growth.  For example, over the last six years for which data are available (2000 to 2006), rural New York districts have experienced enrollment declines four and a half times greater than those of metropolitan districts. Because of school district reliance on taxing property to fund education, without strong growth in property values, a rural district may be reluctant to raise tax rates because of the local burden it will impose and the relatively small amount of revenue it will raise.  This in turn, may lead to depriving the district of the revenue to support academic enrichment.   

 

One argument in favor of regional, and thus larger, high school districts is a widely held perception that rural high schools lack the vast array of enriched courses of other districts. One factor is the small, and further declining, enrollment base of so many rural districts. Small high schools may not have the resources to purchase the services of instructors to teach Advanced Placement (AP) classes for only a few students.  However, in larger schools and districts, where the number of students seeking enrichment is likely to be greater, the per-pupil unit cost of hiring an AP teacher will be significantly less.

Figure 3 displays data on pupils benefiting from enriched courses as a ratio of total enrollments for school year 2001-02, by rural and non-rural counties. It appears that rural pupils have thirty percent fewer enriched course offerings than their urban and suburban counterparts.  With the wide growth in adoption of Advanced Placement, International Baccalaureate (IB) and other enhanced academic coursework in recent years, we have reason to believe that this trend of rural and metro disparity has continued or widened.

 

Figure 3:           Enriched High School Course Offerings, Rural vs. Metro New York

                            School Districts, SY 2001-02 

 

 

Chart - Demographic and economic data by metro and rual NYS counties 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The reduced access to enhanced and enriched courses in rural school districts is, at least in part, attributable to diminished fiscal capacity. Figure 4 displays evidence that supports this finding of weaker economic conditions in rural parts of the State.  As of February, 2009, rural counties have experienced disproportionate job losses in the current recession.  Their unemployment rate of 10.5 percent is almost 20 percent higher than metropolitan counties in New York.  Moreover, in the six years from 2000 to 2006, counties in rural areas experienced 44 percent less growth in property values relative to metro counties.

 

 

 

 

 

 

Figure 4:  Demographic and Economic Data by Metro and Rural NYS Counties

 

Chart - Achievement by geographic school district type, SY 2007-08

 

 

 

 

Relationship between Size and Achievement:

              Can regionalization lead to greater achievement and improved graduation    rates?

 

Evidence has been presented in favor of larger districts in order to yield economies of scale.  However, there is substantial achievement literature which says that smaller aggregations, particularly at the secondary level are desirable because of the close relationship that can develop between pupils and between pupils and teachers.   In turn, this relationship has been found to lead to greater pupil engagement with their
coursework, particularly when it is accompanied by rigorous and relevant content .  This literature for example is the empirical foundation for small learning communities, ninth grade academies and other program options that are incorporated into the middle and high school restructuring programs allowable under the Contracts for Excellence (C4E).  Figure 5 reflects the achievement of students by the type of geographic district type and Figure 6 reflects graduation rate.  It may be that mid size high schools, achieved through regionalization, best accomplish both the goals for maintaining a reasonable size and the ability to offer additional enrichment.

 

Figure 5:           Achievement by Geographic School District Type, SY 2007-'08

 

Chart - Graduation rate by geographic school district type, SY 2007-08

 

 This measure reflects the rate or percentage at which elementary and middle school pupils achieved at least a Level '3' on   all their respective State assessments during the 2007-08 SY.

 

 

 

 

 

 

 

Figure 6:           Graduation Rate by Geographic School District Type, SY 2007-'08

 

chart - 2006-07 expenditure per pupil by need resource category/geographic region

 

Conclusion

 

              This paper concludes by answering the questions that were posed in the introduction and then summarizes the pros and cons of this complex educational issue.

 

 

                      There is a potential for savings over the long term.

 

 

                      It is expected that reorganization will lead to greater access to enriched                                  courses by students.

 

 

 

                            To the extent that regionalization will lead to greater access to enriched                                        course offerings, achievement and college readiness will be improved.

 

 

 

The following factors lend support to paying further attention to rural schools as a public policy concern: 

 

 

 

 

There are simultaneously mitigating factors working against regionalization:

 

.

Regents Policy Discussion

At the June meeting, the Regents Subcommittee on State Aid will discuss the policy implications of this report and directions for further work, as appropriate. 

 

 


References

 

Duncombe, William D. and John Yinger.  2001. “Does School District Consolidation Cut Costs?” Center for Policy Research Working Paper No. 33, The Maxwell School.   Syracuse, NY: Syracuse University, January.

 

Lundine, Stan, Chairman.  2008.  “21st Century Local Government:  Report of the New York State Commission on Local Government Efficiency & Competitiveness”.  Prepared under Executive Order No. 11, April 23, 2007.

 

Spear, Suzanne.  Analysis of Change in Expenditure Following School District Reorganization.  Prepared for the New York State Education Department.  Albany, NY, 1992.

 

Suozzi, Thomas R., Chairman, 2008. “New York State Commission on Property Tax Relief”. Final Report to Governor David A. Paterson. 


        Appendix I

 

 

Details on the School District Reorganization Process

 

Once a proposed reorganization has been confirmed to be in accordance with State Plan for Reorganization, the steps vary depending on the form of reorganization the districts have selected.

 

Centralization of School Districts

              referendum with signatures numbering the lesser of 100 qualified voters or ten percent of the pupils.

 

Annexation to Central School District

              school district.

 

Annexation to Union Free School District

 

Consolidation of Union Free and/or Common School Districts

 

 

 

 

Consolidation with Small City School District

 

 

              In addition to the Commissioner’s powers for reorganization, the Commissioner may also close a school for poor academic performance under the Schools Under Registration Review process or the No Child Left Behind Act. The Commissioner may also remove school superintendents or school board members for willful violation or neglect. There is no comprehensive process by which the State may takeover a school district, as they did with the Roosevelt School District. This required a special act of the Legislature.


Appendix II

 

2006-07 Expenditure per Pupil by Need Resource Category/Geographic Region

 

2006-07 EXPENDITURE PER PUPIL BY NEED RESOURCE CATEGORY

BIG 5

$17,762

HI URB/SUB

$17,169

HI RURAL

$15,790

OTHERS

$17,177

STATE

$17,330

 

 

2006-07 EXPENDITURE PER PUPIL BY GEOGRAPHIC REGION

DOWNSTATE SMALL CITY

$20,962

DOWNSTATE SUBURBAN

$20,140

LARGE CITY

$16,987

UPSTATE SMALL CITY

$15,028

UPSTATE SUBURBAN

$14,630

RURAL

$15,936

NYC

$17,857

 


ATTACHMENT C

 

State Aid Work Group

Work Plan

Regents Proposal for State Aid to School Districts

For School Year 2010-11

 

Month/Dates of Regents Meeting

Regents Committee

Topics

April 20 and 21

State Aid

Budget

June 22 and 23

Joint Meeting:
State Aid and Audits

Fiscal Stress and Fund Balance

 

June 22 and 23

State Aid

1)  Principles of Foundation Aid

2)  Maximizing School District Resources

September 14 and15

State Aid

1)  Foundation Formula Update

2)  Pre-K

October 19 and 20

State Aid

1)  Building Aid

2)  Special Education Funding

3)  Instructional Materials Aid

November 16 and 17

State Aid
Full Board

Full Conceptual Proposal

December 14 and 15

State Aid
Full Board

 

Detailed State Aid Proposal

 

 

 

 

 

 

 

For this reason, many secondary educational policy experts have referred to the ‘Three Rs’ as very promising high school interventions;  Rigor (in terms of content offerings), Relevance (of those academic offerings) and Relationship (between pupils and their work, other students and their teachers).  This literature had been previously addressed by the Regents in the past work on the High School Initiative during 2005 and 2006.  This site:  http://www.ncsl.org/programs/employ/slc.htm discusses the research and these issues in greater depth.