December 2001 vol. XV, no.10
LEGISLATURE ENACTS
SUPPLEMENTAL BUDGET AND RESTORES HURD AID
As previously reported, the Legislature returned to Albany on October
27 and approved a supplemental budget bill which, among only a handful of
education aid initiatives, restored the nearly $12,000,000 in cuts in Hurd Aid
proposed by the executive budget for 2001-2001 and enacted in the base budget
approved in August of this year. The
$12,000,000 cut in Hurd Aid represented a 16% reduction in that aid category.
The Association communicated with legislative leaders and the Governor
about the extreme hardship this aid reduction would cause many small city
districts. It emphasized the inequity to small city school districts
when all other districts, even the wealthiest districts, were protected
through save harmless provisions. While
we are gratified that those reductions have been restored, the overall aid
increase for education of $382,000,000 or 2.8% and the method by which that
increases the distributed through “Flex Aid”, leaves poor school districts
such as small city school districts further behind their more affluent
suburban neighbors than ever. Charles
Winters, State Education Aid consultant to the Association has provided us an
extensive analysis of State school aid for 2001-2002 which analysis is
attached as an addendum to the newsletter.
The analysis shows how the increase in education aid was distributed by
wealth/poverty and geographically. The
analysis also shows how the limited increases in education aid work in “the
real world where costs are rising.” If
there are any questions regarding the analysis or the data supporting its
conclusion, please contact us.
LEGISLATIVE UPDATE
Despite strong indications to the contrary, the State Legislature
appears reluctant to return to Albany before the end of the year to finish up
unresolved budget issues absent a “three-way” agreement on the matters to
be considered. Previous plans to
return to Albany on December 17th were predicated upon the Governor issuing
his 2002-2003 executive budget on or before that date.
Governor Pataki has now backed off the commitment to deliver an early
budget. It has been reported that
the executive wishes to review levels of state tax receipts after the holidays
in order to have a more realistic basis for its revenue projections for the
new state fiscal year. Left
hanging unresolved is the distribution of the stabilization grants
($50,000,000 of the total $100,000,000) earmarked for distribution prior to
January 1, 2002. The
stabilization grants were authorized in the supplemental budget approved in
late October. However, the legislature could be reassembled on short notice
before the end of the year if the leaders agree on an agenda.
CONSTITUTIONAL DEBT CEILING FOR SMALL CITY SCHOOL DISTRICTS
The Association has been working this year to address the growing
problem faced by many small city school districts which have hit their 5%
constitutional debt ceilings. The
non-city school districts, of course, generally do not have this problem since
their debt ceiling is set at a 10% and does not include amounts received for
building aid in the computation of debt (Local Finance Law §121.20).
Elimination of the 5% debt ceiling requires approval in two separate
legislatures and at a November statewide referendum.
The earliest this could be accomplished would be November 2003.
Senator Randy Kuhl and Assemblyman Ronald Canestrari have introduced
bills that would accomplish this, S.4765/A.8681 and S.4766/A.8680.
In addition, the Association has been discussing amendment to the Local
Finance Law to permit Small City School Districts to deduct State aid payments
from the calculation of debt, just as the central school districts can under
§121.20. The Association has talked with Commissioner Mills, Senator
Kuhl and Assemblyman Canestrari, as well as with leadership.
It appears that an amendment to the Local Finance Law §121.20, which
would be a partial but significant short-term solution, may be doable in the
coming legislative session. The
Commissioner has indicated that the department would support such an
amendment. The debt ceiling
problem will become even more troublesome as new and existing debt is
amortized or reamortized over longer terms, as required by amendments to the
building aid under the recently enacted supplemental budget.
REFINANCING OF EXISTING DEBT AND ACCESS TO THE
NEW YORK STATE DORMITORY AUTHORITY
The
supplemental budget passed in October makes extensive changes to the way
building aid will be paid both for existing debt and new debt incurred after
the effective date of the changes. In
short, the law now requires that building aid be paid based on an assumed
amortization and assumed interest rate, each to be determined by the
Commissioner. The assumed
amortization will be based upon probable useful life for each project
depending on whether it is new construction, renovation or other projects such
as energy performance contracts. The
department is currently working to develop policies and guidelines to
implement these new provisions which we understand will be forthcoming in the
next several weeks. The details
that must be worked out for both the refinancing (which is also being referred
to as advanced refunding) and new financing are highly technical.
Moreover, financing and refinancing through the Dormitory Authority
adds further significant complications, some of which are only now being
uncovered.
The Association will be attempting to provide districts with assistance
and understanding in implementing the new law in three ways:
1. the regional meeting to
be scheduled at the end of January in Newburgh will be devoted in part to
discussing some of these issues; 2. The Association has been in discussions
with First Albany Corporation, which has extensive experience in underwriting
Dormitory Authority bond issues; and 3. The
Association counsel has extensive experience with Dormitory Authority
financings and will be an available resource to districts.
The Board of Directors met with State Education Department Commissioner
Richard P. Mills and Deputy Commissioner James Kadamus on November 30th.
Representing the Association were Norma Barton, of Canadaigua CSD,
Ronald Friedman of Long Beach CSD, Richard Jorgensen of Norwood CSD, Michael
Egan of Fulton CSD, Ronald Ross of Mount Vernon CSD, Judith Johnson of
Peekskill CSD, Sandra Lockwood of Rome CSD, Thomas McGowan of Glens Falls CSD
and Association Counsel, Bob Biggerstaff.
Bob started the discussions by outlining the issues that the Board
wanted to cover. Those issues
included middle school testing, teacher shortages, Hurd Aid, the
constitutional debt ceiling, charter school funding, the BOCES aid freeze and
the transition from 55 to 65.
With respect to the concern over middle school testing, Bob conveyed
the concerns of James Lee of Binghamton that the test results were down, that
there were too many tests being given, that there may be a failure of
curriculum alignment, and that there is a loss of instruction time and
additional cost incurred in test administration.
The Commissioner responded that Jim Kadamus is currently working on
these and related issues with a view to spacing the exams so that the English
exam is held at mid-year, Math will be given as late in the year as possible
and that other exams would be split between mid-year and late in the year,
including Science and Social Studies. He
also said that he was concerned that some did not want Science and Social
Studies results reported to the Commissioner or to the newspapers for two more
years. This bothers him because
the public will not see the improvements that he knows will occur.
Michael Egan said that Social Studies results are much better than the
results for English and Math; that 90% are in categories II, III and IV and
well more than half are in III and IV in his district.
The Commissioner observed that some districts have been doing very well
and wanted to know what were they doing to achieve those results.
Ron Friedman observed that the system is overwhelmed with requirements
and that is beginning to affect morale in the schools.
Sandy Lockwood stated that fourth graders generally aim to please and
that the same cannot always be said for eighth graders.
The goal in their district is to make children life long learners.
James Kadamus responded that he agreed and that motivation is essential
to overall performance.
Tom McGowan said that receiving results immediately was important for
the teacher’s morale and for the students, and must be connected to
promotion. Judith Johnson, who
has been at Peekskill city school district for three months, said that the
test results there are not good and that the kids don’t know what is
required of them. Further, she
said teachers don’t have the training to teach the standards and haven’t
taken the tests themselves. Therefore
immediate results are essential to teacher assessment of their professional
needs. Ronald Ross said that he didn’t think scores could go down
but they did and that the quality of teaching in Math is greatly inferior to
that in Social Studies.
The Commissioner said that Mount Vernon had devoted substantial
resources to the early grades and got great results. He
asked what was happening in the middle school.
Ron Ross responded that he needed more funding to make similar progress
in the middle grades. Judith
Johnson stated that there needs to be a major shift in teaching methods.
James Kadamus observed that the problems in middle school really start
in the fifth and sixth grades where advancement is not sufficient.
Tom McGowan said that the maturation of students is a major factor in
eighth and ninth grades. Failures
are high in the ninth grade but not necessarily thereafter.
There should be a fifth year track for some.
Jim Kadamus asked what was being done to help the transition from
eighth to ninth grades. Tom
McGowan observed that his district had a program to address this for 40
identified kids working with 4 teachers who are putting in much additional
time .
Richard Jorgensen stated that a new approach to character education is
needed and attention given to why we learn.
Norma Barton expressed her concern that there needs to be a greater
focus on teacher education. Jim
Kadamus stated that there needs to be developmentally appropriate education
and that this must be thought about. He
believes that this may be a problem in the middle schools.
The Commissioner stated that we needed to talk with college presidents
who often resist department suggestions because they cost more money.
(For example, requiring that a teacher has to major in the course that
they will ultimately teach.) Judith
Johnson stated that her district will not take teachers from certain colleges
without a minimum GPA because of some of these problems.
The Commissioner stated that some teachers can’t teach.
A paper on teacher shortages shows a net total of 23,000 which is
larger in some areas e.g. Math than in others.
The solution necessarily involves expansion of capacity through an
alternative certification program. Cliff
Janney, Superintendent of Rochester City School District, has had great
success in this area. He also
suggested that there be recruiting exit interviews asking prospective teachers
why they were leaving or why they were not taking a job that was offered.
Ron Friedman said that his district has much feedback on how
prospective teachers were treated during the process of being a candidate.
Generally candidates were not told what they will face during the
process and his district gives its candidates that information before they go
through the process. Tom McGowan
said that his district was losing candidates for being too tough.
They ask for a video on their teaching, three unpaid orientation days
and four additional teacher professional development days.
The Commissioner stated that the district may be losing people that
they really want to lose. Ronald Ross stated that his district is getting teachers that
are leaving other districts. James
Kadamus asked what are the competitive problems in attracting teachers.
Tom McGowan answered - low salaries as compared to surrounding suburban
districts. Judith Johnson
answered low test scores were a factor. The
Commissioner stated that the first ten years of a salary schedule needs to be
competitive not necessarily the whole schedule.
This is the result of work done by Cliff Janney in Rochester.
James Kadamus observed that the some teachers tell the district in the
summer that they are leaving, making it difficult to replace them with good
teachers. Perhaps a bonus for
early notice should be considered. The Commissioner asked where is all of this
information shared that we have been discussing here today.
Ron Friedman stated that at the various association conferences there
is considerable networking at which this kind of information is available.
Tom McGowan continued by observing that teacher mentors are needed and
a fifth year needs to be added. The
Commissioner said that the system, however, is going in the opposite
direction. James Kadamus asked
how well are the teachers prepared to teach the higher standards. Tom McGowan replied, not well.
Norma Barton stated that districts have to prepare teachers to teach
now. The Commissioner asked
whether the Superintendents talk about college reputations among themselves.
Ronald Ross stated that many teacher applications do not use correct
English grammar.
The discussion then turned to the issue of the transition between the
passing grades of 55 to 65. Ronald
Friedman stated that he thought that the timing of the transition is too fast;
districts can accomplish the transition but need more time to do it.
The Commissioner stated that if more time were given he would need to
see what would be done with that additional time.
Ronald Ross asked whether a phase-in would be possible.
Jim Kadamus stated that that might be possible.
Other topics were discussed including debt reamortization and
refinancing. Sandy Lockwood
stated that the new requirements will force her district to exceed their
constitutional debt limit. Commissioner
stated that the department was developing rules which should be out in
December and that further the Governor next year will be proposing additional
reforms to slow building construction down.
Tom McGowan asked what about the kids the 70-75 I.Q. who are not
classified as special education students but probably wouldn’t pass regents
exams. Jim Kadamus replied that
the department is looking at that and maybe recommending that, if a student is
declassified in ninth grade, he or she may take the Regents Competency Test in
order to receive a diploma.
DATES TO REMEMBER
Date and Time
Location
Event
December 17, 2001
Board meets with
Legislative Office Building
Assemblyman
Albany 11:00 am
Tokasz, and
Senator Kuhl
January 13,2002
Board Meeting
Desmond Hotel, Albany
1:30pm-4:00pm
January__, 2002 (tentative)
Mid-Hudson Location
Regional
Meeting-Mid
Hudson Valley
March 26, 2002
egislative
Fort Orange Club, Albany
breakfast
8:00am-1:30pm
and
seminar
August 18 and 19, 2002
Summer
Statler Hotel, Cornell University
Conference
and Annual
Meeting
Charles Winters
Consultant of NYSASCSD
11/01
2001-2002 School Aid
The
leadership of the legislature made it clear that this was only an initial step
that would be followed up in September by a genuine budget package.
Some districts levied taxes based upon the baseline budget while others
assumed that more restorations would be forthcoming.
Yet, before the legislature re-convened to develop this final package,
the terrorist attacks of September 11th occurred, changing
everything.
For about three weeks, all other state business
was put on hold in order to deal with the unprecedented emergencies the
accompanied the aftermath of September 11.
By October 2, however, legislative aides began to indicate that nothing
major could be done with school aid. The
worsening economy, along the economic impact of the disaster itself, was
blamed for turning the state’s estimated $2.5 surplus into a projected
deficit. However, something had
to be done to reconcile some of the inconsistencies in the budget. On October 24, 2001, the day before the state’s appeal of
the CFE case was to be heard, the legislature convened to approve bills to
authorize new forms of gambling to help raise revenue and to make some of
these corrections, but left the vast majority of the “computer run” basis
for school aid just as it was in the base-line budget.
While the formulas that created the Governor’s
Flex-Aid were never enacted, the results of those calculations, made in
January on projected data and never updated, became the official distribution
of school aid for the 2001-2002 school year on October 25, 2001.
Analyzing the Results
Organizational Impact
Several aid formulas act as incentives based upon
districts’ expenditures in prior years.
When districts commit money in areas such as BOCES, special education,
capital projects and transportation, they do so with the expectation of
partial reimbursement from the state the following year. Since these expenditure-driven formulas are also equalizing,
poorer districts depend much more heavily upon them. BOCES Aid and Excess Costs Aids for children with
disabilities have been frequent targets of the Governor’s attempts to reduce
inflationary aid increases, but have always been restored by the legislature.
Despite their initial signals that these cuts would be restored, the
Legislature finally left them frozen at the Governor’s levels.
In many cases, the aid contained in the
Governor’s run was based on estimates of 2000-01 costs supplied by the
districts themselves in September of 2000.
Normally the aid would be recalculated using actual data from financial
reports and aid claims, but not this year.
Thus, districts generate additional cuts or even random windfalls based
upon bad guesses. For high wealth
districts, these variances are not material since their aid is only a small
fraction of the amount spent. However,
for the poorest districts, these reimbursement rates can run well over 70%.
There are many examples of property-poor school
districts that also have low tax rates and very low spending.
When the actual yield of added taxation is very small due to a weak tax
base, there is a marked tendency for districts to restrain spending rather
than raise taxes. Thus, a weak
local tax effort often compounds the problems of the aid system.
Uncertainty surrounding future aid increases has a pronounced chilling
effect on spending decisions of these poorer districts, since state aid
represents well over half of the budget and local tax increases would be
disproportionately greater to make up for any shortage in aid.
The abandonment of historic commitments to these expenditure driven
aids erodes the confidence of poorer districts in the state’s willingness to
consistently support a significant share of new costs.
High levels of student poverty and lower test
scores are also common in many of these schools.
For years, the State Education Department has urged these schools to
raise achievement through supplemental programs during school, after school
and over the summer. As
supplements, however, it is far easier for districts to curtail these programs
than to lay off salaried staff in core courses.
To what extent programs targeted at low achieving students will suffer
a disproportionate level of cuts remains to be seen. However, local confidence in state guarantees has been badly
shaken.
Analysis of Equity in the Existing Distribution of Resources
In order to
judge the impact of the aid increases, it is first necessary to understand the
underlying problems in the existing distribution of resources.
This is made far more difficult in New York due to the wide divergence
of costs between upstate and downstate. According
to a study done by the State Education Department of 77 professional,
non-teaching occupations in nine separate regions throughout the state, there
is a 51.5% higher cost for the same professions in the Long Island/NYC area as
compared to the northernmost counties, with lesser variances in other parts of
the state. It is not possible to
make resource comparisons between regions without taking these cost
differentials into account. We
can, by dividing the actual school spending by these cost indices (the same
ones used in the Flex-Aid proposal) produce an adjusted spending value that
demonstrates equivalent buying power throughout the state.
By comparing this cost-adjusted spending to other variables it is
possible to discern how spending varies among districts.
Both
nationally and in New York there has been a consistent showing that family
background has a profound influence on performance of children in schools.
Schools are expected to compensate for these disadvantages through
supplemental programs that give extra time and attention to students who are
struggling. These supplements add
to the cost of education. Therefore
it would be reasonable to assume that school districts with high
concentrations of poverty would need more money than districts with low
concentrations of poverty. However,
when we look at districts in this way, we see the opposite.
|
|
Free
Lunch Percent
|
Regionally
Adjusted Operating Expense
Per Enrolled Pupil
|
Total
Enrollment
|
|
New
York City
|
80%
|
$5,158
|
1,072,061
|
|
102
Other High Poverty Districts (50%+)
|
69%
|
$6,710
|
405,214
|
|
351
Medium Poverty Districts (20% to 50%)
|
34%
|
$6,766
|
686,119
|
|
223
Low Poverty Districts (Less than 20%)
|
9%
|
$7,023
|
705,045
|
|
All
Districts Outside NYC
|
32%
|
$6,854
|
1,796,378
|
|
Total
State
|
50%
|
$6,220
|
2,868,439
|
What is most striking is the contrast between the spending in New York
City ($5,158) compared to the rest of the state ($6,854).
With a poverty rate that is more than double the rest of the state (77%
to 32%), New York City spends 25% less than the rest of the state.
Leaving New York City out of the mix, we find that the other high
poverty districts also spend less on average than the rest of the state, but
only 2% less, while the lowest poverty districts spend 2% more than the rest
of the state, and 36% more than New York City.
Thus, there is significant inequity in the distribution of resources to
deal with the effects of poverty, but it is particularly stark in New York
City.
Spending and Wealth
Like many
states, New York allows local schools to control their overall spending by
levying local taxes, predominantly on property. While the state provides relatively more funds to poorer
schools in an attempt to equalize the power of weak tax bases and poor
communities, it provides some aid to all schools, and limits the amount of
spending that is equalized. In
addition, the amount of local tax effort is left to local discretion.
The overall school spending, then, is produced through a combination of
local effort decisions, local wealth and state aid. The end result of this combination, however, still allows
districts with higher property values to spend significantly more on schools.
Districts with concentrations of retail, manufacturing, utility or
vacation property can export the cost of local education to surrounding
communities, while residential communities cannot.
Thus, New York shows a system where school
spending is largely a function of local wealth, not of student need.
These factors underlie most of the elements in Judge DeGrasse’s
finding in the CFE case that the state finance system is a causal link in
depriving the children of New York City an adequate education:
1.
The state fails to recognize regional differences in the cost of
services.
2.
The state fails to recognize the needs of disadvantaged students.
3.
The state allows local control, including a lack of local tax effort,
to determine levels of school spending.
4.
The formulas are unduly complex and incomprehensible.
The Distribution of Aid Increases
It was in
the above context that the Governor advanced a proposal for overall school aid
reform, the results of which ultimately became final. The Governor’s proposal directly addressed three of the
above points by including them in the proposal.
1. There is a weighting for poverty and for regional costs in the new
formula. 2. Aid increases are
equalized based on local property and income wealth.
3. The formula is simplified by consolidating fourteen separately
calculated categories into one. While
the problem of local effort was not addressed overtly by the formula, it was
included in language for the five largest cities only.
There are two other elements in the Flex Aid
formula as well. There is a
guarantee that no district would receive less than a 1% increase. There is
also a sparsity factor that increases aid for rural districts that bear extra
cost burdens due to uneconomically small schools.
Finally, there is overall design of the proposal
itself. The “Flex Base” is
simply the total of the prior year’s aids.
Thus, any increase in operating aid or aid for students with
disabilities is frozen. This
growth is replaced by a much smaller amount of increase driven by the Flex-Aid
formulas, but producing only a 2.61% increase statewide.
Thus, one major thrust of the proposal was to eliminate much of the aid
increases being driven by current laws.
While the Legislature rejected Flex Aid as a
formula, the ultimate resolution of the impasse was that the results of these
calculations were accepted as final.
Analysis of Equity Changes
We can
examine these increases two ways. First,
by simply looking at how the increase was distributed, by wealth, by poverty,
upstate and downstate. Second, by
looking at how the increase works in the real world where costs are rising.
