SED Seal                                                                                   

 

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

TO:

Regents Subcommittee on State Aid

FROM:

John B. King, Jr.

SUBJECT:

Legislative Action on State Aid to School Districts and Context for the 2011-12 Regents State Aid proposal

DATE:

September 9, 2010

STRATEGIC GOAL:

2 and 5

AUTHORIZATION(S):

 

SUMMARY

 

Issue for Discussion

Does the Board of Regents have any questions concerning Legislative Action for 20010-11?

Reason(s) for Consideration

Review of policy.

Proposed Handling

This question will come before the Subcommittee on State Aid at its September 2010 meeting.

Procedural History

The Regents adopted their State Aid Proposal for 2010-11 in December 2009. The Executive Budget was released on January 19, 2010.  Legislative action was approved on August 19, 2010.

Background Information

Each year the chair of the Regents Subcommittee on State Aid requests a review of the enacted budget with regard to legislative action on State Aid to school districts.  This is done in order to define the context for school districts in order to begin the planning process for the development of the Regents proposal on State Aid to school districts for the next year.  This year's context for school finance is also affected by the enactment of the federal Education Jobs bill which will provide New York State with $607 million.  Attachment 1 provides highlights of the Executive Budget.  Attachment 2 provides information related to the federal Education Jobs Fund.

Recommendation

Not applicable.

Timetable for Implementation

This discussion will inform the development of the Regents State Aid proposal to occur from now until the Regents approve their State proposal in late 2010.  As part of this process, the Subcommittee will have a conversation with a group of educational associations known as the Department’s Education Finance Advisory Group, which advise the Regents and Department on school aid issues.  The purpose of this consultation is to get the broader reaction of the range of New York State educational associations to school aid and educational issues. 


                                                                                                                        Attachment 1

HIGHLIGHTS OF THE 2010-2011 BUDGET AS PASSED BY THE LEGISLATURE AND APPROVED BY THE GOVERNOR

 

School Aid

Overview

The 2010-2011 Budget as passed by the Legislature provided an estimated $21.3 billion in funding for General Support for Public Schools (GSPS), as supplemented with federal American Recovery and Reinvestment Act of 2009 (ARRA) funding. This is a year-to-year reduction of $476 million, or 2.2%.  When adjusted to reflect the impact of the Executive veto of various education-related provisions, this is reduced by approximately $511 million, or about 2.5%.  The reduction is, however, more than offset because of the availability of an additional $608 million in Federal funding.  When that is included, aid available to districts increases from the enacted run by $97 million or about 0.5%.

The most significant change from the Budget as passed by the Legislature is the elimination of $565 million in State Aid that was added by the Legislature to reduce the impact of the Gap Elimination Adjustment (GEA) proposed by the Governor.  The $1.4 billion net GEA consists of a GEA reduction of $2.1 billion offset by $726 million of ARRA funding.  The GEA is calculated through a formula that recognizes pupil need, fiscal capacity, tax effort and administrative efficiency.  Although the Governor vetoed the Legislature's addition of $565 million to mitigate the GEA, the newly-enacted Federal Education Jobs Fund will make an additional $608 million available to districts, and is to be distributed in the same proportion as were the vetoed funds. 

This total amount may be further reduced in response to Chapter 313 of the Laws of 2010, which provides the Executive with the authority to reduce certain payments in order to compensate for shortfalls in revenues attributable to enhanced Federal Medical Assistance Percentages (FMAP).  At this time, the recovery need has not been determined.

In addition, Supplemental Valuation Impact Grants to Haverstraw-Stony Point ($2.5 million) and Barker ($1.3 million) are not continued. 

While these are the major changes in funding, the Executive veto also resulted in a number of other noteworthy changes.

The Executive has proposed the elimination of aid increases resulting from district data submissions following the Executive budget (which was based on data used to produce the Department's November aid estimates).  Although the Legislature accepted this proposal for the 2009-10 school year, and rejected it for future years, the veto eliminated the statutory changes necessary to implement the freeze on aid increases. As a result, current payments for 2009-10 include approximately $95 million attributed to data updates.

The Executive had proposed and the Legislature enacted a variety of provisions that would have altered aid-related policies.  Since the Executive vetoed the entire Article VII bill enacted by the Legislature, these provisions are currently not in effect, although a final resolution of the budget process may include the restoration of many of these provisions.  The major provisions relating to State Aid are:

 


Education Jobs Fund                                                            Attachment 2

Overview:

 

 

Assurances:

 

Allocation of Funds:

 

 

 

Local Uses of Funds:

 

 

 

Prohibited Uses:

 

Reporting Requirements:

 

 

Guidance:

http://usny.nysed.gov/arra/ and
http://www.ed.gov/category/program/education-jobs-fund

The Act contains some provisions that apply only to the State of Texas

For purposes of this program, the District of Columbia and Puerto Rico are defined as states.