EPP Monitor/Newspaper Winter 00

The Educational Priorities Panel has taken an initial look at both plans to see how they would change the state school system if they were enacted and what their impact would be on New York City public school students. In a nutshell, the Regents’ plan could be viewed as an "incremental" reform which improves upon the current system, while the Midstate Finance Consortium introduces new types of calculations and attempts to develop a system that is also fair to taxpayers. Both proposals have a mix of strengths and weaknesses in how they implement funding reform:

COSTS
Regents Recommends a five-year phase-in of changes. By the fifth year, the increases in state Operating Aid would total $3.05 billion.	Midstate Recommends a three-year phase-in of changes. By the third year, the increases in state Operating Aid would total $3.3 billion.
SIMPLIFICATION
Regents Simplifies current Operating Aid by eliminating several formulas. Provides a choice to school districts of receiving a flat grant or a "foundation level" of $4,300 (up from the current $3,900) in state Operating Aid and this formula, which could increase or decrease the "foundation level:" [$4,300 X regional cost] X wealth adjustment X [student count X student needs adjustment] Students are counted on the basis of attendance. Phases out "transition caps" over five years, and would provide relief from the caps in the first year for high-needs school districts. Phases out "save harmless" funding over five years. School districts receive the same amount as the previous year under "save harmless," even though their student enrollment may have decreased or their districts’ wealth may have increased.	Midstate Much easier to understand and compute than the Regents proposal. Starts out with the premise of a "sound basic education" "foundation level" of $8,000 for each student and this formula: $8,000 X student count X regional cost X student needs adjustment MINUS federal aid for basic operations and a wealth-adjusted minimal local contribution Students are counted on the basis of an average of enrollment and attendance figures. Eliminates "transition caps," which puts a limit on aid increases to school districts. Keeps "save harmless" funding for three years, with an option to extend this funding policy. Only twelve other states have similar policies, which tend to drive education costs up and to promote inefficiencies in school district operations.
REGIONAL COST INDEX
Regents Does an accurate accounting of differences in regional costs by using data provided by the Bureau of Labor Statistics on wages and earnings for 78 non-education occupational titles within 10 regions of New York State. The range in the regional cost index goes from a low of 1.000 for the most rural part of the state (North Country) to a high of 1.539 for the New York City/Long Island region. This reform proposal recognizes that adjacent school districts must compete among themselves for personnel. Various analyses of regional costs have found that differences in housing costs among regions are a major predictor of differences in wage rates. By excluding school related-occupations, this "regional cost factor" also tends to avoid distortions brought about by collective bargaining policies of individual school districts.	Midstate Uses an index of school district costs developed for the National Center for Education Statistics by Jay G. Chambers based on an analysis of the salaries of certified educational personnel and nonprofessional personnel (based on experience and academic preparation) and some costs of materials. Since the "cost index" is pegged to individual school districts, this proposal ignores the reality that school districts hire within the same regional labor pool. Also, the way this "cost index" is created means that some of the differences are the result of current inequities in school district funding. More affluent school districts can pay higher salaries and low-wealth districts cannot. The adoption of the Chambers index, which ranges from a low of .778 for one rural upstate school district to a high of 1.127 for a school district in Nassau County, would be highly disadvantageous for New York City, which would have a "cost index" of only 1.040.
MEASUREMENT OF STUDENT NEEDS
Regents Computed on the basis of an added weight of .33 for every high-poverty, English Language Learner, or rural student in the school district.	Midstate Uses a very different formula by setting aside 15% of total state Operating Aid for at risk students and then allocating it to districts on the basis of their proportionate share of high-risk students and district wealth, which would be disadvantageous to downstate and some city districts.
ADJUSTMENT FOR LOCAL DISTRICT WEALTH
Regents District wealth is computed on the basis of both income and property wealth as compared to state averages. Both the school district’s wealth and the state’s wealth is divided by a total student count (both public and private students) to come up with per capita amounts. New York City’s wealth, which is now calculated on a county basis (called "borough aid"), would be computed for the city as a whole. In this new way of measuring the city’s wealth, Manhattan’s higher incomes and property wealth would increase the city’s wealth average. The regional cost factor would counterbalance the city’s "increase" in wealth due to this new way of calculating wealth.	Midstate Simplifies the computation of school district wealth (and formulas) by assuming that any locality should be able to fund their schools on the basis of $13 per $1,000 of the full value of real property. By eliminating a measurement of personal income within a locality, the risk for New York City is that in an economic downturn, the drop in available income tax revenues would not be reflected. New York City also has 50% of the state’s private school students, so the elimination of this student count calculation could also be disadvantageous.
LOCAL SCHOOL DISTRICT FISCAL EFFORT & TAXPAYER FAIRNESS
Regents Would strengthen current law (the Stavisky-Goodman Maintenance of Effort Act, for the New York City school district) to the other four large cities (Buffalo, Rochester, Syracuse, and Yonkers). This would require the cities to maintain their expenditures for schools on the basis of an average proportion of municipal funding for education in the three previous municipal budgets. Would improve current law by eliminating state and federal education funding in the calculation of "average proportion."	Midstate The formula itself would automatically require a minimal fiscal effort by all school districts of $13 per $1,000 of the full value of real property if they wanted to receive state Operating Aid. In affluent school districts with high property values, tax rates could be lower or they could provide even more local resources for education. By requiring this minimal level of local school district fiscal effort, the Midstate Finance Consortium goes beyond looking at just these five cities and attempts to create a fair system for taxpayers in all parts of the state.