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January 2002 Vol. XVI, No.1
STATE
OF THE STATE MESSAGE 2002 Unfortunately, little in the way of anything new or creative was unveiled in the speech, which is not surprising in view of the combined fiscal restraints of business and school tax cuts already approved in past Budgets (which the Governor said he would not delay), projected deficits of $5 billion and $3 billion in the next two fiscal years and the Governor’s pledge to cut general fund expenditures in 2002-2003. With respect to education the Governor had little to say other than giving himself a pat on the back for over $4 billion in increased aid from 1995-2001, which, of course, he vigorously resisted during each and every Budget season. He did propose flexibility in expenditure of state aid by local school districts as a way of insuring that that aid is used more effectively. While there is merit to that proposal generally, it can also be used to smoke screen inadequate state aid appropriations and to freeze aids, such as public and private excess cost aid, which are subsumed in the “flex aid” proposal and which is tantamount to a glorified block grant. The Governor did briefly mention the issue of
equity in the distribution of education aid. Stating that greater equity was a
goal, he modified that goal by expressing his desire not to pit one school
district against another. Again, in
view of the fiscal restraints that recent events, the economy and the Governor
have set for the 2002-2003 State Budget, greater equity without redistribution
of existing funding may for the foreseeable future be only a chimera.
And of course, equity like beauty is in the eye of the beholder. Measures
of student and school need by which aid is distributed are subject to so much
complex manipulation and subjective judgment that it is often impossible to
determine whether equity has or has not been achieved in any specific year.
Proposals which are touted to accomplish equity may in the long run not
significantly close the gap in funding and resources between wealthy and poor
districts, or between suburban and urban or poor rural districts. It is remarkable that the message did not mention the Campaign For Fiscal Equity lawsuit which was decided against the Governor last year and is now on appeal, a decision being expected in one to two months. The CFE case has asked the courts to define what the specific indicia of a “sound basic education” required under the State Constitution are (teacher qualifications, class size, adequacy of books, supplies instructional equipment and facilities, drop out rates, student performance?), and whether the State has violated the State Constitution by failing to provide children in NYC that basic education. The political implications of this case are far reaching. Education spending represents about a third of the total of State dollars in the State Budget. If CFE is ultimately successful, it will require the systemic reform of the education aid formula that the State Legislature has been shown institutionally incapable of enacting, and it will undoubtedly require the redistribution of aid from suburban to urban schools and the additional investment of billions in aid for those urban/poor districts. Despite the fact that the CFE case involves only the NYC school system, it will affect, as the trial court decision stated, the entire educational system statewide. And while equity in the distribution of aid among schools is not in and of itself a State or Federal Constitutional issue, the equity issue, which is a volatile political issue, will necessarily be dealt with as the Legislature attempts to comply with the courts’ decision, if upheld, that the State Aid formula is unconstitutional. ASSOCIATION
LEGISLATIVE PRIORITIES FOR 2002 The Association’s board of directors, at its August and November meetings, established its major legislative priorities for 2002 and have included several priorities from prior years and several which have only been identified recently. Among those which have been carried over from prior years are 1) greater equity in the distribution of state aid to education based on district wealth and student need; 2) elimination of the Hurd Aid phase out; 3) reform of charter school funding; and 4) austerity budget cap reform. Among those more recent additions to Association’s concerns are 5) the constitutional debt ceiling; 6) exclusion of building aid from debt ceiling computation; 7) increase in minimum Hurd Aid grants; and 8) debt refinancing/refunding requirements of the 2001-2 supplemental State Budget (chapter 383 of the laws of 2001). Senator Kuhl and Assemblyman Sanders have expressed concern about and a willingness to help with the problems caused by the constitutional debt ceiling. These problems have been made worse by the supplemental State Budget passed last October (chapter 383 of the laws of 2001) which now requires greater amortization periods for new capital financing and for existing debt as of July 1,2002. Chapter 383 will now compound the difficulty many small city districts are facing in fitting sorely needed building projects under the debt ceiling by increasing the time that old and new debt must be outstanding. In addition, this week a secondary concern has arisen involving the pre-1997 debt incurred for non-voter approved projects amortized over a ten-year period. Since voter approval would have been required had the debt structure called for a longer period, serious question is raised as to the legality of refunding these financings and as to the need to obtain an exception for them from chapter 383. Needless to state, with the July 1st deadline less than six months away, it is critical that solutions to these highly technical problems are provided as soon as possible, and that clear guidance is given districts on their available options. The Association will be working closely with districts to provide or facilitate the provision of that guidance. It will also be working with the Legislature and SED staff to develop the necessary statutory and regulatory solutions. DATES TO
REMEMBER
February 9,2002 March 26, 2002 August 17-18, 2002
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