Friday, January 29, 2016

Disappointing fiscal news for schools

Two weeks ago, Governor Cuomo delivered his State of the State address and Executive Budget proposal in Albany where he outlined his agenda for the year. With New York in healthier fiscal shape than it has been in several years, I was hopeful that perhaps education would truly be a priority this year, but what I heard was the same disappointing political rhetoric with a little softer tone.

School aid as proposed by the governor for the 2016-17 school year is less than half of what the state Board of Regents and other education groups have stated is necessary for schools to support student success. And once again, it appears our school district will take a direct hit.

The Executive Budget proposes a $2.1 billion total school aid increase over the next two years: the 2016-17 and 2017-18 school years.  An analysis of the nearly $1 billion increase in state education funding proposed for 2016-17 shows that it would be split largely in three categories: $408 million to reimburse schools for expense-driven costs such as transportation, construction and BOCES services; $266 million for Foundation Aid, the primary source of funding for general school operations; and $189 million to partially restore the Gap Elimination Adjustment (GEA), a practice of diverting promised funding from schools that began during the height of the economic recession and has since continued to help the state alleviate its own budget shortfalls.

The governor’s proposed year-to-year increase is well below the $2.4 billion in aid to public schools recommended by the state Board of Regents and the $2.2 billion increase called for by the Educational Conference Board, which is comprised of several statewide organizations including the New York State Parent Teacher Association, the New York State Council of School Superintendents, and The New York State School Boards Association among others.

Lack of sufficient operating aid and an excessively restrictive tax cap will impede progress

The state aid projections released by the governor present a total increase in aid for Watervliet schools of $231,673, or 1.27 percent more than our schools received for the current budget year. Of that increase, approximately $136,000 is Foundation Aid, while the remainder is for expense-driven categories.

Making matters worse is that the property tax levy growth for school districts in 2016-17 will be held to 0.12 percent—literally a fraction above zero percent—as reported by State Comptroller Thomas DiNapoli last week. That is due to a key factor in the tax cap formula that limits levy growth to either 2 percent or the change in the Consumer Price Index (CPI), whichever is less. [See copy of op-ed piece published in Dec. 22 Times Union co-authored by me and Schodack Superintendent Robert Horan on the potential effects of a zero percent tax levy cap on schools.]

Many district leaders, including myself, have argued that the inflation rate is not an appropriate measure for school districts since most of our fixed costs are personnel-related, including pension contributions, contractual salaries and benefits, fuel and instructional materials; expenditures which are not typically reflected in the CPI, which measures the change in costs of goods and services that consumers purchase. Also, the CPI reflects conditions in the 2015 calendar year, yet is applied to cap 2016-17 school year expenses that have yet to accrue—in other words future costs.

By making the tax levy growth factor a consistent 2 percent, rather than based on such a volatile factor as the CPI, our district would at least have a more predictable and sustainable way to develop our annual budget.

As costs continue to rise and we strive to meet increased expectations, the inability to raise any additional tax levy revenue threatens to undo the modest progress we were able to make this year to preserve and restore programs after several years of devastating cuts for our district. As I said in my December blog, it’s a classic one step forward, two steps back.

Major challenges lie ahead as budget development gets underway 

While it is still too early in the development process to discuss budget numbers for the 2016-2017 school year, I can tell you that our district has no plans to try to exceed the tax cap. To raise the amount of funding needed to close the gap that we will likely face, would require the district to increase the tax levy by double digits, which our community simply cannot afford.

I am extremely concerned that without intervention by the state legislature, our district will struggle to meet annual cost increases and will again be forced to consider program cuts. We must continue to plead our case and make it known that we can no longer accept inequities in the distribution of state aid that fails to adequately fund high-needs, low-wealth districts like ours. (Links to legislators' email addresses are below.)

As legislators continue state budget negotiations, I ask that parents, staff and the community join me in reaching out to our elected representatives in the Legislature to ask that the Foundation Aid formula be fixed and that our public schools receive equitable and sufficient funding so that we can meet our obligation to educate, inspire and challenge every student, every day.

Assemblyman John McDonald

Senator Neil Breslin

Assemblywoman Catherine Nolan, Chair of the NYS Assembly Education Committee

Senator Carl Marcellino, Chair of the NYS Senate Education Committee