March 2003 Vol

Vito DiCesare represented the Association at the February 25, 2003 Legislative Hearing on Governor Pataki’s Proposed Budget for 2003-2004. He was accompanied by Beacon CSD Assistant Superintendent Skip Lamont and Association Counsel Robert Biggerstaff. In giving his testimony, he joined the more than 30 speakers representing the State Education Department, NYS Board of Education, Teacher Unions, and other education organizations all of which vehemently objected to the proposed $1.2 billion reduction in education aid. He spoke not only about the need to roll back Governor’s cuts, but also about specific proposals which could alleviate burdens on small city school districts and use scarce state and local resources more effectively. Those specific proposals mentioned included greater equalized targeting of state aids, debt ceiling reform, charter school reform, budget vote reform to allow a bifurcated budget to accommodate a late state budget, austerity budget cap reform and tax reform to permit recognition of uncollected tax revenues in the current year.

Other speakers included State Education Commissioner Richard Mills who urged rejection of the proposed cuts and suggested adoption of the Regents state aid proposal which recommends a $516 million increase. NYC Chancellor Joseph Klein echoed those sentiments reflecting that NYC will lose $477 million in aid under the Executive Budget, far more than the NYC budget can accommodate. Assemblyman Steven Sanders, Education Committee Chairman, noted that the gap is really $750 million in 2003-2004 because of new teacher contracts to be negotiated. He further asked how, under “maintenance of effort” requirements, can the city absorb that shortfall without cutting classroom services. The Chancellor said it could not be done. Assemblyman Sanders followed with questions, the answers to which made clear the effect of the Executive Budget in dismantling pre-kindergarten programs, increasing class size and losing the progress made in reducing numbers of schools on the SURR list, which numbers he said are at an all time low.

Bob Lowry of NYSCOSS also testified about the Executive Budget’s effect on poorer districts and on their already overburdened taxpayers. He voiced concerns about BOCES aid cuts, Special Education aid cuts, Operating aid cuts and elimination of Ladder aids.

On behalf of the New York State Small City School Districts, we welcome this opportunity to comment on the Executive Budget proposal for State Aid to Education in fiscal year 2003-2004. The Executive Budget proposes a $1.2 billion reduction in aid to elementary and secondary education, or nearly a 9% reduction over all, as a way of dealing with the $9.3 billion state deficit in 2003-2004. This proposed reduction in education aid exceeded all expectations and asks the education community, the children they serve and local taxpayers to assume a disproportionate share of the burden of the deficit. The total decline in state spending in the General Fund is projected at 2.9% and for All Funds there is essentially no decline. Nevertheless, the Executive Budget proposes a 9% reduction in aid to education. Of the total deficit of $9.3 billion, only $3.5 billion is addressed through real cuts to services and programs[1]. Of that $3.5 billion, education cuts support 35% of these reductions. This is an enormous burden to place on school districts. Moreover, with the increasing requirements of the Regents Higher Standards and No Child Left Behind Act, which impact most heavily on the poorest schools with the weakest tax bases, these reductions in state aid could possibly bankrupt many districts or cause taxpayers revolts[2].

Small City School Districts serve two-thirds of the inner city children outside New York City and are comprised of districts with an average combined wealth ratio which is approximately 20% below the state average. They have weaker tax bases, higher tax rates and lower spending per pupil than average. The primary issue for Small City School Districts has always been the need for greater equity in the distribution of state aid for education and greater recognition of both district wealth and student need. We have consistently advocated that any change in aid must be made on a more highly equalized basis or it will result in hurting children and programs and require local taxpayers, who are already over burdened, to assume an even greater share of the cost of education.

Prior to submission of the Executive Budget, we recognized that even a freeze in state aid in 2003-2004 would have a serious detrimental effect on programs and tax rates in our districts[3]. Adding a 9% reduction in state aid on top would be devastating to small city schools and create havoc in our communities. Moreover, even if the Legislature restores some or all of the cuts proposed by the Executive Budget, if the State Budget in not approved until after school budgets are voted on, programs, children and taxpayers will suffer immeasurably because the Executive Budget figures will have been used to develop local school budgets.

We recognize that there are critical and difficult choices facing the Legislature and School Boards this year. We have attempted to develop ideas which would assist our districts and the state making those choices less difficult. While the following is not an exhaustive list of possible solutions, we ask the Legislature to consider the following at a minimum:

1. Restore cuts in aid to education proposed by the Executive Budget at least; reject the proposed consolidation (and reduction) of operating aids and reject the elimination of Ladder aids.

2. Target limited state resources by modifying public excess cost aid, private excess cost aid, building aid, BOCES aid, and other aids containing guaranteed minimums and flat grants, so as to provide greater equalization in aid distribution.

3. Retain the proposed freeze in Hurd aid contained in the Executive Budget and recognize that several high need, low wealth small city school districts which get only nominal amounts of such aid need increased aid.

4. Provide debt ceiling reform for Small City School Districts (i) approve the resolution eliminating the Constitutional 5% debt cap, (ii) approve legislation enacting a 10% debt cap as is currently applicable to non-city districts, (iii) approve legislation excluding amounts received in building aid from computation under the debt ceiling as is currently applicable to non-city districts, and (iv) provide that debt incurred by small city districts through the New York State Dormitory Authority shall be excludable from debt ceiling computations.

5. Allow districts to present a bifurcated budget to voters which would authorize expenditure of additional state aid over the Executive Budget figures if such aid is appropriated in the State Budget after the statewide school budget vote.

6. Allow Small City School Districts to recognize revenues in the current year for uncollected taxes which are to be paid by cities in the subsequent year (See RPTL §1332). (This will ensure that Small City School Districts are treated the same as all other non-city school districts with respect to uncollected taxes.)

7. Provide state aid to public school districts for the stranded costs of students attending charter schools and provide that charter schools shall be paid at separate rates depending on whether the students are attending an elementary charter school or secondary charter school.

8. Provide that hearing officers may only choose state-approved schools for placement for children with disabilities.

9. Reject the Executive Budget proposal for a priority pool for building projects.

10. Reject the Executive Budget proposal for a school budget cap and provide for modification of the austerity budget cap so that the cap is the “greater” not the “lesser” of 4% or 120% of the CPI.

11. Provide for flexibility in the use of Ladder aids to avoid districts losing such aids.

12. Establish a cap on attorney’s fees and the length of impartial hearings with respect to special education placement issues.

14. Regardless of the decision by the Court of Appeals in the case, Campaign for Fiscal Equity vs. New York State, begin an effort, in coordination with the education community, to assess the cost of a quality education in New York State and develop reform proposals to ensure that every child receives a quality education and that the burden of the support of that cost is distributed equitably.

We are available to discuss any of these recommendations at greater length and look forward to working with the Legislature in the coming weeks on these important issues.

March 25, 2003
Legislative Breakfast and Seminar -- 8:00 am at Fort Orange Club, Albany

August 10 and 11, 2003
Summer Conference, Annual Meeting and Board Meeting at The Thayer Hotel, West Point

[1] See pp. 7-8 New York State Executive Budget, 2003-2004.

[2] For example, under the Executive Budget Utica CSD receives an 11% reduction in aid, which will necessitate more than 100 layoffs. Still, a 25-30% tax increase will be required.

[3] Albany CSD has forecast that a freeze in state aid would drive an 11% tax increase.