2010-2011 Executive Budget – Briefing Book


Education and Arts

I. Overview

New York maintains its strong commitment to quality public education through support from all levels of government. Our education system is financed with local, State and Federal resources, which together make New York's per pupil spending among the highest in the nation, even in these difficult financial times.

The State share of financial support for education is administered by the State Education Department (SED), under the direction of the New York State Board of Regents, which also establishes education policy. The stated purpose of the agency is to “provide knowledge and skills to all,” which it accomplishes through its oversight and administration of a wide array of programs that serve both children and adults.

The single largest program administered by SED is School Aid. Allocated to school districts primarily through statutory formulas, School Aid helps finance elementary and secondary education for pupils enrolled in nearly 680 school districts. To achieve necessary State savings, this budget recommends a progressively structured reduction to overall School Aid, while providing school districts with new ways to control expenses and access existing resources.

SED also has oversight responsibility for a range of programs that provide funding and education-related services to the citizens of this State. This includes support for cultural education, higher education, vocational rehabilitation programs, and special education services.

The New York State Council on the Arts (NYSCA) is an executive agency dedicated to preserving and promoting New York's heritage of rich and diverse cultural resources and expanding access to arts and cultural institutions statewide. Additionally, NYSCA provides advisory services and financial assistance to the State’s arts community.

II. History/Context

New York public schools spend more per pupil overall ($15,546) than nearly any other state and 61 percent above the national average. New York ranks first in per pupil spending for school district employee salaries ($7,328, or 71 percent above the national average) and benefits ($2,901, which is 109 percent above the national average). This reflects both strong local tax effort and significant State spending on education.

In recent years, during the Wall Street boom, School Aid increased at a rapid and unsustainable rate. Even after the year-to-year reduction to School Aid proposed in this Executive Budget, State support for education would still have increased by $6.1 billion or 42 percent compared to 2003-04 – twice the rate of inflation (19 percent) during that period.

Although the economic downturn began more than two years ago, New York has, thus far, been able to avoid year-to-year cuts to education. At the same time, other states facing budgetary pressures similar to New York have been forced to take major current-year actions affecting schools:

Now, however, with education funding representing over 34 percent of State Operating Funds spending and the State continuing to face massive budget gaps, reductions in overall School Aid support are required. The 2010-11 Executive Budget therefore recommends a year-to-year reduction in School Aid of $1.1 billion or five percent. As education funding in New York is a combination of local and State support, the proposed reduction represents two percent of school districts’ total general fund expenditures statewide.

When faced with fiscal hardships, previous governors have proposed deep reductions to School Aid. The 1991-92 Executive Budget proposed a 10.2 percent cut to total School Aid. In order to manage the financial consequences of September 11, 2001, the 2003-04 Executive Budget included an 8.5 percent reduction to School Aid. Presented with an even greater financial challenge, this proposal seeks to limit reductions to education to five percent.

The Executive Budget also recommends several reforms to help school districts responsibly manage necessary reductions in State funding while minimizing any potential impact on property taxpayers. This budget would allow school districts to utilize excess funds in their employee benefit reserve funds. These amounts are in addition to the nearly $1.5 billion in undesignated reserves reported by school districts.

Additionally, the Executive Budget provides school districts with new flexibility to manage expenses and relief from certain State mandates. This proposal provides schools with a statewide exemption to the Wicks Law, which would save more than $200 million in annual capital costs, and allows for streamlined reporting processes. This budget also places a four-year moratorium on new statutory mandates and requires SED to implement a new regulatory review process intended to deter the promulgation of unfunded State mandates affecting school districts.

III. Proposed 2010-11 Budget Actions

This proposal achieves necessary savings through a 2010-11 year-to-year reduction in School Aid of $1.1 billion on a school year basis. This five percent year-to-year decrease would be achieved through several actions:

The Executive Budget seeks to maximize use of Federal funds. In addition to using Federal ARRA funds to partially offset the GEA, this proposal increases the use of Federal funds to help support special education programs funded outside of School Aid. This budget also includes an appropriation of $750 million in anticipation of a successful application for competitive funds through the Federal Race-to-the-Top program. Although this Federal funding would not provide direct fiscal relief to the State, it would provide additional resources to school districts and the State Education Department to fund educational improvements, statewide.

Reimbursement for categorical special education programs has been modified to align fiscal and programmatic responsibility, and funding for certain other education-related programs are reduced or eliminated to avoid other reductions in direct aid to school districts.

This overall funding proposal maintains New York's strong commitment to education aid. The total recommended 2010-11 School Aid amount of $20.5 billion would be $3.4 billion more than if spending were limited to inflation growth since 2003-04. More than 67 percent of all 2010-11 School Aid would be used to benefit students in high needs school districts.

IV. Summary of Spending (All Funds)

Category 2009-10
($ in millions)
2010-11
($ in millions)
Change
Dollar
(in millions)
Percent
School Aid (School Year) 21,613 20,527 (1,086) (5.0)
Overall Education and Arts Spending (Fiscal Year) 28,562 28,012 (550) (1.9)

 

Estimated 2009-10
School District
Total General
Fund Expenditure (TGFE)
($ in billions)
Year-to-Year
Reduction in Total
School Aid
($ in billions)
Year-to-Year
Reduction in Total
School Aid as a
Percentage of TGFE
52.1 B 1.1 B 2.1%

V. Major Initiatives

Gap Closing Actions

Proposal 2010-11
($ in millions)
Fiscal Year
2011-12
($ in millions)
Fiscal Year
School Aid
Reduce School Aid through a Gap Elimination Adjustment (2010-11 SY: $2,138 million) 1,496 641
Eliminate Funding for Teacher Centers (2009-10 SY: $35 million) 25 35
Reduce Supplemental Funding to the Roosevelt Union Free School District (2009-10 SY: $6 million) 4 6
Delay Phase-in of Foundation Aid and Universal Prekindergarten 0 730
Total 1,525 1,412
Other Education and Education Related Programs
Consider Wealth as a Factor in Reimbursing Summer School Special Education Costs (2010-11 SY: $86 million) 68 28
Use Federal Funds for Preschool Special Education 61 0
Reduce Funding for Comprehensive Attendance Program for Nonpublic Schools 2 2
Eliminate Funding for Schools Under Registration Review (SURR) Grants 2 2
Reduce Funding to Independent Colleges and Universities (Bundy Aid) 1 1
Total 134 33
Arts
Reduce Funding for Arts Grants 7 7
Total 7 7
State Operations
Require NYSTI and The Egg to Become Self-Supporting 2 4
Additional Agency Reductions 5 5
Total 7 9

School Aid

Other Education and Education-Related Programs

Arts

State Operations

Other Budget Actions

Reduce Mandates on School Districts. Legislation would be advanced as part of the budget to reform a system that has produced an overly burdensome system of State mandates. Further, the Executive Budget would provide relief from certain existing mandates to assist school districts in controlling costs and adjust to the changing economic climate. These school district-specific actions are in addition to a broader package of local government mandate relief proposals that would address procurement reform and pension costs. Elements of the proposal include:

Limit Growth in County Costs for the Preschool Special Education Program. In order to better align fiscal and programmatic responsibilities and limit expenses for counties, school districts will be responsible for any year-to-year growth in county costs exceeding two percent. Cost increases would be moderated by encouraging the use of nearby providers and by more timely State action on local audits.


Supporting Documents:

Description of 2010-11 New York State Executive Budget Recommendations for Elementary and Secondary Education (PDF, 2.08MB)

School Aid Runs published by the State Education Department (PDF, 5.02MB)

 

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