The Budget and the Public Schools

Transcription

1 The Budget and the Public Schools THE COUNCIL S Winter Institute March 7, 2016 Robert Lowry Deputy Director NEW YORK STATE COUNCIL OF SCHOOL SUPERINTENDENTS 1

2 Governor Cuomo s School Aid Proposal $991 total increase, including: $189 million reduction in the Gap Elimination Adjustment $266 million increase in Foundation Aid Net $408 million increase in expense-based and other aid categories, funded according to current law formulas New $100 million Community Schools Aid formula $24 million for prekindergarten expansion & quality $4 million for Early College High Schools 2

3 2 views on the distribution of the Governor s proposal Percent change in School Aid under the Executive Budget Increase in Total Aid Increase in Total Aid,excluding Building and Community Schools Aid 0% 1% 2% 3% 4% 5% 6% Total State NYC Big 4 High Need Small Cities & Suburbs High Need Rural Average Need 3.3% 3.2% 2.4% 2.8% 3.4% 2.9% 4.2% 4.0% 4.2% 4.5% 4.0% 5.0% Key Point: With the near zero tax cap, state aid will be the only significant revenue increase for most districts. Low Need 4.6% 4.3% 3

4 Major formula components GEA Restoration: Average restoration: 44%, Minimum: 30% 205 districts would have GEA ended in ; all would in Foundation Aid Increase: 75% of districts qualify for an increase high need in 2003 or 2008 or getting less than the equivalent of a 3% increase in Foundation Aid from GEA restoration plus Community Schools Aid Community Schools Aid: $75 million to 17 districts with a receivership school $25 million to 211 other districts designated as high need in either 2003 or

5 What could Community Schools Aid fund? d. School districts shall use amounts apportioned pursuant to this subdivision to support the transformation of school buildings into community hubs to deliver co-located or schoollinked academic, health, mental health, nutrition, counseling, legal and/or other services to students and their families, including but not limited to providing a community school site coordinator, or to support other costs incurred to maximize students' academic achievement. 5

6 School Aid Arithmetic The Governor proposes a $991 million increase. Fully eliminating the GEA would cost an additional $244 million and would bring the total increase to $1.235 billion, with New York City receiving 32% of the increase. To provide New York City its historical share would require adding $131 million just for the City. Total cost: $1.366 billion. The Big 4 and many other high need districts would still be receiving small increases. More than a $1.5 billion increase is probably needed to address all priorities. 6

7 Increase in aid ($ in millions) FOUR KEY POINTS About School Aid and the State Budget 1. The proposed state budget falls far short of providing an adequate level of support to enable schools to maintain current services. $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Educational Conference Board Estimate $1.7 billion ECB assumptions: 2.7% increase in salaries 6.6% increase for health insurance Reduction in TRS costs 2.3% increase for nonpersonnel costs No offset to total cost increase from local revenue due to prospect of 0% tax cap SOURCE: ECB estimates and Division of the Budget publications Regular Aid New Programmatic Initiatives Executive Budget Recommendation $128 million $863 million

8 2. The property tax cap allows only minimal increases in local revenue, necessitating significantly increasing state aid. The 2% cap isn t 2% the allowable levy growth factor for will be 0.12%. The tax cap is based on the average monthly change in the Consumer Price Index for But most economic forecasts predict the CPI will rise by at least 1% in How much would a 0.12% tax increase yield? ECB assumptions: 2.7% increase in salaries On average, districts would raise only $17 per pupil, or enough to support only a 0.07% increase in spending 6.6% increase for health insurance More than 50% of districts would not raise $25,000 Reduction in TRS costs Less than 20% would 2.3% increase raise for nonpersonnel costs $863 million enough to preserve the job of a single first-year teacher receiving typical compensation No offset to total cost increase from local revenue due to prospect of 0% tax cap The bottom line: For all districts rich, poor, and in-between state aid is essentially the only source of additional revenue for

9 3. State budget gaps have been eliminated, the Gap Elimination Adjustment must end as well this year. Gap Elimination Adjustment per Pupil GEA Proposed GEA After Restoration $0 $50 $100 $150 $200 $250 $300 $350 Total State $91 $162 NYC Big 4 High Need Small Cities & Suburbs High Need Rural Average Need Low Need $5 $22 $13 $1 $47 $82 ECB assumptions: $23 2.7% increase in salaries 6.6% increase for health $23 insurance Reduction in TRS costs But ending the GEA doesn t do enough for high need districts 2.3% increase for nonpersonnel costs No offset to total cost increase from local revenue due to prospect of 0% tax cap $197 $185 $269 $863 million $310 What remains of the GEA is hurting average need districts the most. SOURCE: Council analysis of NYSED School Aid data

10 4. Eliminating the GEA is not enough, the state must commit to increasing and updating the Foundation Aid formula Foundation Aid Increase per Pupil Fully Phased-in Foundation Aid Increase per Pupil -$500 $500 $1,500 $2,500 $3,500 $4,500 Increasing Foundation Aid is imperative for many of the poorest districts this year. Total State NYC Big 4 High Need Small Cities & Suburbs High Need Rural Average Need Low Need $99 $159 $190 ECB assumptions: $ % increase in salaries 6.6% increase for health insurance $145 $1,307 Reduction in TRS costs 2.3% increase for nonpersonnel costs $31 $761 No offset to total cost $1 increase from $662 local revenue due to prospect of 0% tax cap $1,447 $1,546 $2,591 SOURCE: Council analysis of NYSED School Aid data $3,990 Updating the Foundation Aid formula is essential to providing a sustainable financial future for all districts especially given the restrictive tax cap. The 2007 Foundation Aid formula generally provided the greatest aid per pupil to the neediest districts while promising all districts greater predictability in state support going forward. Read the full report Four Key Points About School Aid and the New York State Executive Budget here:

11 Good News Bad News Revenue forecasts: Senate Majority: $721 million more than Executive Budget Assembly Majority: $693 million more than Executive Budget Consensus: $225 million more than Executive Budget Senate Deputy Majority Leader John DeFrancisco: Quite honestly, it s almost a rounding error in our budget. It s not a heck of a lot of money to add to the budget. There s so many requests by so many people in both houses for the use of that money Next steps One-house budgets to be passed next week March 14 Final budget passage planned for March

12 APPR Past Council Statements: The well-known definition of insanity is doing the same thing over and over and expecting a different result. Since 2010, legislation to change the teacher evaluation system in New York has been passed three times this proposal would double down on the system s deficiencies and undermine its current successes. (Joint statement with NYSSBA, March 31, 2015). We believe the most recent changes enacted through the state budget to the Annual Professional Performance Review (APPR) system of teacher and principal evaluations are deeply flawed and should not be implemented as enacted. (Letter to Legislators, June 3, 2015). In order to create a valid evaluation system for teachers and principals, section 3012-d should be repealed and replaced by a law which allows school districts the tools to fairly and effectively evaluate their employees and make employment decisions based upon legitimate measures of educator effectiveness. (Comments to SED on proposed regulations, August 24, 2015). One recommendation: Avoid the aid penalty allow districts to conduct evaluations under either 3012-c or 3012-d. 12

13 Education Tax Credits Governor s Proposal: 75% Personal Income or Business Tax Credit on donations of up to $1 million $50 million for private schools $20 million for public schools $500 credit for private school tuition for households with incomes <$60,000 $200 credit for teacher purchases $150 million total cost Tax benefit as a % of donation Traditional charitable donation Governor's Education Tax Credit proposal Senate Education Tax Credit proposal 0% 50% 100% 5.7% 75.0% 90.0% 13

14 Minimum Wage Governor Cuomo s Proposal to Phase-in $15 Minimum Wage Effective Date New York City Rest of State 12/31/2014 $8.75 $ /31/2015 $10.50 $ /31/2016 $12.00 $ /31/2017 $13.50 $ /31/2018 $15.00 $ /31/2019 $15.00 $ /31/2020 $15.00 $ /1/2021 $15.00 $

15 The Big Picture & Longer-Term 15

16 Enacted State Budget Increase for School Aid vs. everything else 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% 2.0% Total State Budget* 6.1% School Aid** 3.7% Medicaid * State Funds General Fund plus Special Revenue Funds ** School year increase -1.0% Everything else SOURCE: New York State Division of the Budget. FY 2017 Executive Budget Financial Plan 16

17 Proposed State Budget Increase for School Aid vs. everything else 5% 4% 3% 4.3% 3.2% 2% 1% 0% 1.7% Total State Budget* 0.1% School Aid** Medicaid Everything else * State Funds General Fund plus Special Revenue Funds ** School year increase SOURCE: New York State Division of the Budget. FY 2016 Financial Plan First Quarterly Update 17

18 End the Gap Elimination Adjustment and re-start the Foundation Aid formula $1,500 $1,000 $1,107 $1,205 Foundation Aid & the Gap Elimination Adjustment ($ in millions) Gap Elimination Adjustment Foundation Aid Increase $500 $0 $0 $0 $0 $112 $171 $251 $428 $266 $0 -$500 -$434 -$244 -$1,000 -$1,500 -$2,000 -$2,500 -$3,000 Foundation Aid enacted after CFE lawsuit -$1,412 Recession leads to state budget gaps -$2,556 -$2,156 -$1,639 -$1,037 State forecasts budget surpluses State is over $4 billion behind Foundation Aid * ** *** SOURCE: Compiled from Division of the Budget annual Description of New York State School Aid Programs. *In , School Aid was reduced by a $1.1 billion Deficit Reduction Assessment which was fully offset by federal stimulus aid. **In , the full GEA was $2.1 billion, but was offset by $726 million in federal stimulus aid. ***For , the GEA is projected to eliminated; no projection of Foundation Aid is available. Meeting Students Greatest Needs Educational Conference Board Feb. 26,

19 Looking ahead Projected state budget structural deficit: : : Projected School Aid increase: : : Projected increase in the Consumer Price Index: 2016: 2017: $1.121 billion (1.5%) $3.129 billion (4.1%) $1.087 billion (4.5%) $1.286 billion (5.1%) 1.0% 2.1% SOURCE: NYS Division of the Budget, FY 2017 Executive Budget Financial Plan Updated, February

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