State Aid for Education: A Constitutional Analysis of the Enacted 2015-2016 New York State Budget

The 2015-16 New York State budget has now been enacted by the legislature and signed into law by the governor. This budget increases state aid to education by approximately $1.3 billion, which will provide an average 6% increase in aid for the state’s school districts. It also includes $75 million over two years for new grants for districts with struggling schools and provides small amounts of additional competitive grant funding of prekindergarten, extended learning, community schools, master teachers, and early college high school programs that the governor had initiated in the past based on the recommendations of his education reform commission.

This increase is well below the $2 billion in additional state aid that the Regents had recommended and is not sufficient to remedy the state’s ongoing violation of the requirements of Article XI, §1 of the state constitution and fulfill the clear directives of the New York Court of Appeals, the state’s highest court, in the Campaign for Fiscal Equity (CFE) litigation. The state’s on-going noncompliance means that the fundamental educational resource deficiencies created by years of budget cuts, the pressures of additional unfunded state mandates, the escalation of health, pension, and other costs, and the depletion of reserve funds in many districts will continue to undermine the educational opportunities of vast numbers of the state’s three million public school students. The state’s ongoing underfunding of its constitutional requirement disproportionately affects students from low-income households and communities and students of color.[1]

Among the egregious violations of constitutional requirements that the 2015-16 state budget perpetuates are the following: It continues to defer full foundation funding for the costs of a sound basic education; it reverts to the notorious “shares agreement” for funding New York City schools; it continues the unconstitutional gap elimination adjustment; it revives the teacher evaluation penalty provision that threatens essential school aid; and it fails to provide appropriate funding for pre-K.

Continued Deferral of Full Foundation Funding

In CFE v. State of New York, the Court of Appeals directed the state to create a system to provide full funding for the “actual cost” of ensuring all students the opportunity for a sound basic education by the 2010-11 school year. Five years past this deadline, the state continues to fail to comply with this requirement. In 2007, the legislature adopted a foundation funding formula that was based on the amount that the state education department had calculated to be the actual cost of a sound basic education. Although the state has never denied that the validity of this formula for calculating the amounts that are needed to provide the constitutionally required opportunity for a sound basic education, each year since 2009-10, the state has deferred the date for full implementation of the foundation funding amounts.

For 2015-16, even with the $1.3 billion in additional funding that the state appropriated, total foundation funding will still be more than $4.7 billion below the amount the state legislature itself had determined to be necessary to provide all students the opportunity for a sound basic education.

Reversion to the Notorious “Shares Agreement”

In its CFE decisions, the Court of Appeals repeatedly specified that the state’s funding system must “align funding with need,” that resources must be “calibrated to student need,” and that the amount of state aid provided must “bear a perceptible relation to the needs of City students.” [2] Instead of adhering to the foundation formula, the state has reverted to the infamous “three men in the room” decision-making process in which the governor and the two legislative leaders determine how much funding each school district will receive behind closed doors and on the basis of political deals, rather than student need.

Evidence submitted in the CFE trial showed that, for almost all of the decade preceding the trial, New York City had received precisely 38.86% of the annual increase in state aid under a political “shares agreement.” Supreme Court Justice Leland DeGrasse denounced this arrangement, stating that it reflected “an array of manipulations” that did not relate to actual student needs.[3] Significantly, for 2015-16, New York City’s share of the state aid increase is the same 38.86% or the “fixed percentage share” that the court held to be blatantly unconstitutional.  

Continuation of the Gap Elimination Adjustment

In 2010-11, in the wake of the recession, the state created a device it called the “gap elimination adjustment” (GEA) to provide a rhetorical justification for its decision to reduce educational spending below constitutionally required amounts. The GEA is a legislated artifice that allows the state simply to ignore “the gap” between the money the state constitutionally must provide pursuant to the Court of Appeals’ CFE directives, and the money that the state is willing to allocate to education from its total annual budget.

Although the recession has long since passed and the economy has largely recovered, the state has continued to include the GEA in its budget calculations. The amount of the GEA has been reduced from $1.036 billion in 2014-15 to $434 million for 2015-16, but the maintenance of this mechanism remains an affront to the constitution. Moreover, the convoluted “gap elimination reduction” formulas that the state has devised lack transparency, allowing for the political manipulation of state aid and neglect of actual student need.

Revival of the “Penalty Provision”

Two years ago, the state revoked $290 million in state aid that had been appropriated for the benefit of students in the New York City public schools and analogous amounts from several upstate districts because these districts had not negotiated a new annual professional performance review (APPR) system with their teacher and principals unions by a date specified by the governor. The commissioner of education subsequently imposed an agreement on the city and its unions, but the $290 million in penalty funds were not reinstated. A constitutional challenge to this penalty, and a claim for reinstatement of these funds, is currently being considered by the state supreme court.[4]

At Governor Cuomo’s urging, the legislature has now adopted a similar penalty provision for 2015-16 and all of the years thereafter. Specifically, for 2015-16, the state will withhold the entire increase in general support aid for the full school year from any school district that fails by November 15, 2015, to reach agreement with the collective bargaining agents for its teachers and principals and to obtain approval from the commissioner of education on a plan for a revised APPR system for its teachers and principals.[5] This new statute further provides that such funding shall be withheld in each subsequent year in which a school district has not submitted documentation by September 1st demonstrating that it has fully implemented the standards and procedures for conducting annual teacher and principal evaluations.

This penalty provision, like the one adopted in 2012, was enacted without giving any consideration to the potential impact on students’ opportunity for a sound basic education. Whatever may be the merits of the revisions to APPR system that the state adopted this year and that require these new school-district/union agreements, it is unconstitutional to withhold from any students the modest increase the legislature had appropriated to move toward meeting their educational needs for the coming year because some school district and union officials prove unable to conclude a new agreement by the arbitrary deadline the governor established.

Failure to Fund Prekindergarten Services Appropriately

Last year, the governor and the legislature committed to provide universal high-quality full-day pre-K services to all four year olds in New York State within a five-year period. Pre-K is one of the specific services that the CFE court deemed to be constitutionally essential, at least for high-need students. The governor proclaimed that the state would provide school districts sufficient funds for this initiative as soon as school districts are ready.[6] However, for 2015-16, the second year of the proposed five-year implementation period, the legislature took no action to keep that pledge.

For the 2014-15 school year, the legislature appropriated $300 million for New York City and $40 million for all other school districts in the state, but specified that the funds would be provided through a competitive grant process. Funding would not, in fact, be provided to all districts that were ready to mount quality pre-K programs. Furthermore, school districts, already financially strapped by the state’s failure to provide full foundation funding, were required to pay all the necessary expenses up front and wait to be reimbursed for most of these expenses until the next fiscal year. The state also put a $7,000-$10,000 per-child cap on the amount of reimbursement districts could receive, regardless of the actual cost of providing a high-quality program.[7]

Although for 2015-16 the state increased funding for the competitive grant program by $15 million (some of which would be allocated to initiate programs for three year olds), none of the major flaws in pre-K financing were addressed. For the second year in a row, therefore, many districts throughout the state will be unable to initiate or expand pre-K programs, and New York City will probably need to expend additional local funds in order to expand and ensure high quality in its pre-K programs.

Necessary State Action for Achieving Constitutional Compliance

The Campaign for Educational Equity will continue to call upon the governor, the legislature, and the Regents to make significant advances toward constitutional compliance in each of these areas over the coming months, and we will make concrete policy recommendations to help them to do so.

All of these constitutional deficiencies are also being challenged by the plaintiffs in a case currently pending before the New York State Supreme Court, New Yorkers for Students’ Educational Rights (NYSER) v. State of New York.[8] In that case, the plaintiffs are claiming that the governor, the legislature, and the Regents must take the following actions to achieve constitutional compliance:

  • Identify the essential resources, services, and supports that must be available to all students to comply with the constitution and to meet statutory and regulatory requirements;
  • Provide schools and school districts with clear guidance and recommended methods for maximizing the efficiency and cost effectiveness of their operations while safeguarding constitutional educational services;
  • Develop and implement an up-to-date methodology to determine the actual costs of providing all students with the essential resources for a sound basic education in a cost-effective manner that properly weighs student needs and concentration-of-poverty factors;
  • Revise the state funding formulas to ensure that all schools receive sufficient resources; and
  • Create state and local accountability mechanisms for sound basic education and ensure enforcement by the state education department and other entities and the means and capacity to carry out those responsibilities.

_________________________________________________________________________________________________ 

[1] The impact of years of constitutional noncompliance on students in high-need schools throughout the state has been documented in two reports issued by the Campaign for Educational Equity: Essential Resources: The Constitutional Requirements for Providing All Students in New York State the Opportunity for a Sound Basic Education (Dec. 2012) and Deficient Resources: An Analysis of the Availability of Basic Educational Resources in High-Needs Schools in Eight New York State School Districts (Dec. 2012). Both reports are available at www.equitycampaign.org.

[2] CFE II, 100 N.Y. 2d. at 929 and 930; CFE III, 8 N.Y. 3d. at 21 (2006).

[3] See CFE v. State of New York 187 Misc. 2d. 1, 89 (S. Ct., N.Y. Co., 2001).

[4] See Aristy-Farer et al. v. State of New York et al., Index No. 100274/13), Decision on Motion to Dismiss (S. Ct. N.Y. Co., Mendez, J., April 7, 2014). This case has now been consolidated with New Yorkers for Students’ Educational Rights v. State of New York, discussed below.

[5] Educ. Law ¶312-d.11

[6] “As quickly as cities bring it on line, we will fund it. Whatever they need, we have the funding ready,” Statement of Gov. Andrew Cuomo, Brian Lehrer Show, WNYC, March 10, 2014.

[7] For a detailed discussion of these issues, see Campaign for Educational Equity and Center for Children’s Initiatives, Securing the Future of New York’s Children: Taking the Next Steps Toward Truly Universal Pre-K (2014), available at www.equitycampaign.org.

[8] The litigation papers and further information about this case are available at http://www.nyser.org.

Views expressed by the Campaign for Educational Equity or its staff do not necessarily reflect the views of Teachers College.

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One thought on “State Aid for Education: A Constitutional Analysis of the Enacted 2015-2016 New York State Budget

  1. Isn’t there a way to challenge this at the Federal Level? To me it seems the State can just go about doing whatever it wants. There must something in the system of checks and balances that will no longer allow non-compliance.

    Reply

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