THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234
Regents Subcommittee on State Aid
John B. King, Jr.
Legislative Action on State Aid to School Districts and Context for the 2011-12 Regents State Aid proposal
September 9, 2010
2 and 5
Issue for Discussion
Does the Board of Regents have any questions concerning Legislative Action for 20010-11?
Reason(s) for Consideration
Review of policy.
This question will come before the Subcommittee on State Aid at its September 2010 meeting.
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.
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.
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.
HIGHLIGHTS OF THE 2010-2011 BUDGET AS PASSED BY THE LEGISLATURE AND APPROVED BY THE GOVERNOR
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:
- Language that would have required C4E districts to continue to set aside funds for Contract activities. Because that language was vetoed, districts qualify under existing statutory provisions and, at this time, it appears that Yonkers is the only district required to submit a Contract to the Department.
- The proposed freeze of Charter School tuition is not currently implemented.
- The proposed extension of the sunset for NYC to use Teachers of Tomorrow funding for costs associated with transitional certification is not currently implemented, making NYC's ability to participate in the program uncertain.
- Authorization for districts other than NYC to expand class sizes for students with disabilities is not carried forward. This may increase district operating costs.
- Provisions allowing districts to advance the accrual for certain costs from 2011-12 to 2010-11 are not carried forward. This may impact some districts who rely on these mechanisms for budget-balancing purposes. It should be noted that the Executive and the Legislature have committed to enacting these provisions before the end of the current legislative session.
- Existing setasides within Foundation Aid are not extended for Magnet Schools, Attendance Improvement/Dropout Prevention in NYC and Teacher Support Aid.
Education Jobs Fund Attachment 2
- The Ed Jobs Fund is a new Federal program that provides $10 billion in assistance to states to save or create education jobs for the 2010-2011 school year. Jobs funded under this program include those that provide educational and related services for early childhood, elementary and secondary education.
- The Ed Jobs program is authorized in Public Law No. 111-226 (Act), which President Obama signed on August 10, 2010.
- New York’s application was submitted by Governor Paterson in mid-August.
- New York State’s application was approved on August 31, 2010.
- The State Fiscal Stabilization Fund program education reform assurances apply to the Ed Jobs program. If, like New York, a state has an approved SFSF phase two application, it is considered to be in compliance with those assurances and does not have to provide in its Ed Jobs application any additional data relative to those assurances.
Allocation of Funds:
- The US Department of Education determines the allocation of each state by formula on the basis of (1) its relative population of individuals who are aged 5 to 24, and (2) its relative total population. The amount of funding available to each state under the program is provided on the program website at http://www2.ed.gov/programs/educationjobsfund/index.html.
- New York will receive $607.6 million.
- A state must distribute the funds to LEAs either –
- Through the state’s primary elementary and secondary education funding formula(e) as identified in its application for funding under the SFSF program (the option chosen by New York); or
- On the basis of the LEAs’ relative shares of funds under Part A of Title I of the ESEA for the most recent fiscal year for which data are available.
- District allocations are shown on NYSED’s State Aid website under “Estimates of 2010-11 State Aid.
Local Uses of Funds:
- An LEA must use its funds only for compensation, benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services.
- For purposes of this program, the phrase “compensation, benefits and other expenses, such as support services” includes, among other things, salaries, performance bonuses, health insurance, retirement benefits, incentives for early retirement, pension fund contributions, tuition reimbursement, student loan repayment assistance, transportation subsidies and reimbursement for childcare expenses.
- An LEA may use the funds to pay the salaries of teachers and other employees who provide school-level educational and related services. In addition to teachers, employees supported with program funds may include, among others, principals, assistant principals, academic coaches, in-service teacher trainers, classroom aides, counselors, librarians, secretaries, social workers, psychologists, interpreters, physical therapists, speech therapists, occupational therapists, information technology personnel, nurses, athletic coaches, security officers, custodians, maintenance workers, bus drivers and cafeteria workers.
- Funds may be used by school districts for the 2010-11 and/or 2011-12 school years.
- The statute prohibits LEAs from using Ed Jobs funds for general administrative expenses as that term is defined by the National Center for Education Statistics (NCES) in its Common Core of Data. These prohibited expenses are administrative expenditures related to the operation of the superintendent’s office or the LEA’s board of education, including the salaries and benefits of LEA-level administrative employees.
- The statute also prohibits LEAs from using Ed Jobs funds for other LEA-level support services expenditures as that term is defined in the Common Core of Data. These prohibited activities include the payment of expenditures for fiscal services, LEA program planners and researchers, and human resource services.
- Districts are required to comply with the reporting requirements of 1512 of the American Recovery and Reinvestment Act.
- Districts will report jobs saved and created and the expenditure of funds on the Department’s existing ARRA reporting system.
- Guidance is available at:
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.