STATE BUDGET INFO

Quick Review of FY 06-07 State Education Budget Agreement

Martine G. Guerrier

     Last year saw not only the first on-time budget since the early 1980's, it also saw the Governor's Flex Aid proposal adopted.  As part of the Flex Aid formula New York City received $3,466,305,284 in aid. One of the important features of Flex Aid was its adjustment by need and regional cost. Additionally, the remaining categorical aids and the newest aid grant Sound Basic Education, all combined for a state aid total of $5,940,696,794 to NYC.  The 2005-06 legislative budget provided NYC with 60% of Sound Basic Education Aid-- without a requirement for a local contribution.  Changes in Building Aid could have provided NYC with at least 50% reimbursement of expenditures for new school construction, however the changes were not implemented because the State Education Department has not written the guidelines or regulations for implementation.

     In what could be the sign of permanent reform, the legislature enacted its second on-time budget.  However, an on-time budget is not necessarily a good budget as evidenced by this year's enacted budget.  In quick review of sums, EPP finds that the 2006-2007 Flex Aids includes only a 1 percent increase over last year's enacted budget.  For New York City, Flex Aid provides $3,501,320,611 in funding.  In an effort to drive more funding to New York City, the legislature created a supplemental Extraordinary Needs Aid category and augmented Limited English Proficiency funding. The Supplemental ENA provides NYC with $43,317,456 in additional support. The Limited English Proficiency funds provide NYC with an additional $13,781,365 in aid to address the needs of pupils who score below the 40th percentile on a standard test of English proficiency and receive LEP services.  While there are increases to school operating through these gimmicks, there is very little additional funding for expansion of services to students beyond maintaining current year initiatives.

     The center ring in the circus of education funding this year was the crafting of a capital funding structure to deal with New York City's school facilities plan, The 2005-2009 Children First Five-Year Capital Plan.  With the aggressive posture of the Mayor, threatening the electoral future of Senate Republicans and the broad stroke brushing of the entire legislature as villains in the failure to achieve adequate funding for the Five-Year capital plan, the legislature was forced to pull together a capital funding proposal.  In a compromise between the Assembly and the Senate, the EXCEL program was enacted to provide a statewide total of $2.6 billion for capital construction. Roughly, $1.8 billion would be directed to New York City and $800 million would be allocated to the rest of the state through borrowing by the NYS Dormitory Authority. There is an additional $3.3 million in Building Aid funding.  However, the legislature also increased the City's debt limit by $9.4 billion for the explicit purpose of school construction, with the understanding the NYC would be reimbursed at the current law rate of at least 50% in Building Aid, for a total of at least $4.7 billion in capital funds from the state.  Therefore, the projected total state aid to the City's school facilities plan would be $6.5 billion.  There are competing interpretations of this facilities deal, which are more optimistic.  Once the budget is set and the dust settles, the exact level of the state contribution to school capital funding will become clearer.

     There is roughly $50 million in additional aid for transportation, including summer school transportation for New York City.  There is about a $136,000 drop in funding for hardware and technology funding, and approximately $411,000 drops in software, library and textbook funding.

     Funding for class size reduction is frozen to last year's level at $88,837,812. 

     Universal Prekindergarten has a frozen funding formula appropriation of $145,531,793; however there are supplemental aid boosters that total $25,996,239.  The grand total of aid for Universal Prekindergarten is $171,528,032.

     Teacher Support Aid is frozen to last year's level at $62,707,000.

     On March 23rd, just days before the legislature was to finalize its budget negotiations the Appellate Court ruled against the Governor's appeal from the CFE case, and ordered the state to comply with Judge DeGrasse's order to provide additional funding to New York City in both operating and capital aid. Unfortunately, in a continued anemic nod to CFE, the legislature only added $225,842,737 over last year's amount to Sound Basic Education Aid for New York City.  The total appropriation is $421,493,115. 

      As of this writing, the Governor could veto this budget or sections of it within the next three days.  There are signs that funding for capital projects will be saved, however the funding mechanisms could be altered.

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