School Finance Landscape in New York

1. School Finance Landscape in New York Context for the weeks and months ahead in the 2015-16 school year

2. State Factors Affect School Budgets • State aid: • Gap Elimination Adjustment • Foundation Aid Formula • State aid predictions for 2016-17 • Tax Cap: • 0% this year? • Reforms • Other factors: • Smart Schools Bond Act • Tax rebate programs • APPR • Receivership • Prekindergarten • State budget timeline

3. Gap Elimination Adjustmentfunding withheld from NY schools since 2009-10 $1.04 billion $434 million

4. Foundation Aid Formula frozen, then stalled The state is $4.4 billion behind full phase-in of the formula.

5. State Aid in 2016-17 • State groups calling for $2.2 - $2.4 billion increase: • NYS Board of Regents - $2.4 billion • NYS Assoc. of School Business Officials - $2.4 billion • Educational Conference Board (ECB) - $2.2 billion • New Yorkers for Students’ Education Rights v. New York: • Alleges state is underfunding schools • Verdict expected by year’s end • Could mean $5 billion for schools, but appeal by state likely • State leaders say… • “We’re increasing school aid. We’re getting rid of the GEA, that’s our number one priority.”Sen. Majority Leader John Flanagan • Education spending is "at an all-time high.“ Rich Azzopardi, spokesman for Gov. Andrew Cuomo

6. Tax Cap Formula Allowable levy growth factor = The lesserof 2% or change in CPI. https://youtu.be/ZnpN9p8Tq9g

7. Tax Cap: It’s Not 2%

8. Tax Cap: NY vs. Massachusetts

9. Tax Cap Reforms • Educational Conference Board recommendations: • Make up the shortfall of a 0% capIncluded in $2.2 billion recommended school aid increase is $700 million to cover the difference in local revenue between a cap of zero and 2% • Fix the capRemove the volatility of CPI and allow schools to count on a stable 2% for the allowable levy growth factor

10. Smart Schools • Smart Schools Bond Act - $2 billion spread among all school districts • Amount varies by district based on state formula • Designated for technology infrastructure and equipment, high-tech security features, capital project work for pre-kindergarten programs • State-approved Smart Schools investment plan required to begin spending allocation • No expiration date on Smart Schools funds

11. Tax Rebates/Credits • Property Tax Freeze Credit for school taxes ends in 2015-16 • Rebate on increase in school taxes provided to taxpayers in a district that stays within its tax cap and has a state-approved efficiency plan • STAR program rebates begin in fall 2016 • STAR-eligible taxpayers making $200,000 or less to receive a rebate of $185 if district is within its tax cap • School districts do not create, control, or administer state tax exemption/rebate programs

12. APPR • APPR changes in 2015-16 state budget: • APPR plan meeting new requirements had to be in place by Nov. 15 to receive 2015-16 state aid increase • Hardship waivers: • 707 districts in the state; all but 72 asked for and received a state Education Department hardship waiver from this requirement

13. Receivership • Receivership set up in 2015-16 state budget: • Special conditions for lowest 5 percent of schools (not districts) with lowest student performance measures • Designated “struggling” or “persistently struggling” • Persistently Struggling • $75 million allocated for turnaround efforts (20 schools identified) • One year to improve under local control or may go into “receivership” • Struggling • No funding allocated • Two years to improve before consideration of receivership

14. Universal Prekindergarten • Not required in New York, but state investment continues… slowly: • 2013-14… 25 school districts awarded a total of $25 million in competitive grants to increase the availability of high-quality prekindergarten placements for the highest need children and schools • 2014-15… 53 school districts and 20+ community-based organizations received a total of $340 million “to fund state-of-the-art innovative prekindergarten programs and to encourage creativity through competition” • 2015-16… 34 school districts received a total of $30 million to increase the availability of high quality prekindergarten placements for high-need children and schools • 2015… 5 school districts (New York City, Yonkers, Uniondale, Indian River, Port Chester) divided a $25 million federal grant for preschool expansion

15. State Budget Timeline • January to June – 2016 legislative session • Jan. 6 – Governor’s State of the State Address • Jan. 19 – Deadline for Governor to submit Executive Budget Proposal • April 1 – Deadline for state budget adoption

16. Local Budget Dates & Deadlines • March 1 – District’s tax levy limit due to the state • April 18 – Filing deadline for Board of Education candidates (except small cities) & special propositions • April 22 – Deadline for budget adoption • May 3-10 – Hold budget hearing • May 17 – Statewide school budget vote day

17. “Schools need a responsive and reliable state partner that recognizes the realities they face and makes the commitment needed to address them and move forward.” - Educational Conference Board 2016-17 School Finance Paper