By Michael A. Rebell 

The 2016-17 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 $1.35 billion, which will provide an average increase of 4% in foundation aid and a 5.9% increase in overall school aid for the state’s school districts. Although Governor Andrew Cuomo has boasted that “this is the best [budget] plan the state has produced…in decades literally,” in percentage terms the increase is basically the same as last year’s. Moreover, this budget does not rival the 14% increase in foundation aid and 9% increase in overall education aid that the legislature enacted for 2007-08, immediately following the final court decision in the Campaign for Fiscal Equity (CFE) case.

Bright spots in the budget include a substantial commitment to converting struggling schools into community schools that provide important health, academic, and social supports to students and their families. The foundation-aid increase includes $100 million earmarked for school districts to spend on community schools, and, there is an additional categorical allocation of $75 million for expanding community schools in districts with struggling or persistently struggling schools. The budget also finally does away with the notorious “gap elimination adjustment” that, since 2010, has provided a rhetorical justification for the state to reduce educational spending below constitutionally required amounts. Plaintiffs in the pending NYSER v. State of New York litigation are continuing to press for a court ruling that would prohibit the state from ever reinstating the GEA or any similar device in the future.

This year’s increase is well below the $2.4 billion in additional state aid that the Regents had recommended. And it is not sufficient to remedy the state’s ongoing violation of the requirements of Article XI, §1 (the education article of the state constitution), and does not fulfill the clear directives of the state’s highest court in the 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 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]

The state also continues to maintain a “supermajority” tax cap that prohibits school districts outside of New York City from increasing local property tax rates by more than 2% or the last year’s increase in the consumer price index, whichever is less, without the approval of 60% of the district’s voters. This year the cap allowed increases of essentially 0%. The foundation formula is premised on an expectation that local property taxes will be funding a share of the school district’s budget, in accordance with local property wealth. Since, in many cases, the property tax cap will prohibit the district from raising a fair share of needed revenues from local taxes, the shortfall between the available resources and the amounts needed to provide students the opportunity for a sound basic education will be even greater than is indicated by the continuing shortfall in state aid. It should be noted that an attempt to extend the property tax cap to New York City this year was defeated.

Major Violations of Constitutional Requirements

Among the major violations of constitutional requirements that the 2016-17 state budget perpetuates are (1) a continuing deferral of full funding of the amounts needed to meet constitutional sound basic education requirements; (2) a revival of the infamous “shares agreement” that was banned by the courts in CFE; and (3) a failure to provide full funding for universal prekindergarten services.

1. 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. Six years past this deadline, the state continues to flout 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 2016-17, even with the $1.35 billion in additional funding that the state appropriated, total foundation funding will still be approximately$4 billion below the amount the state legislature itself had determined to be necessary to provide all students the opportunity for a sound basic education. 

2. Reversion to the Infamous “Shares Agreement”

In its CFE decisions, the Court of Appeals repeatedly specified that the state’s funding system must “align funding with need” (CFE II, 100 N.Y. 2d. at 929), that resources must be “calibrated to student need” (id. at 929), and that the amount of state aid provided must “bear a perceptible relation to the needs of City students” (Id. at 930; CFE III, 8 N.Y.3d at 21 (2006)). 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 (see CFE v. State of New York 187 Misc. 2d 1, 89 (S. Ct., N.Y. Co, 2001)). Significantly, for the past few years, and now again for 2016-17, New York City’s share of the state aid increase will be the same 38.86% or the “fixed percentage share” that the court held to be blatantly unconstitutional in CFE.

3. Failure to Fund Prekindergarten Services Appropriately

Two years ago, the governor and the legislature committed to provide access to 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 were ready to expand their programs.[2] However, for 2016-17, the third year of the proposed five-year implementation period, the state again failed to keep that pledge.

For the 2014-15 school year, the legislature appropriated $300 million for New York City and only $40 million for all other school districts in the state. Last year, and now for this year, the state appropriated only those same amounts. This means that students in many upstate districts still cannot be served. Estimates of the number of currently unserved children run as high as 100,000.

The legislature did enact a new $22 million competitive grant program for preschool for three year olds, which will expand opportunities for a small number of these younger students. The manner in which this funding has been appropriated, however, further complicates the already complex and fragmented funding mechanisms that New York State now utilizes for pre-K: there are now seven separate programs through which pre-K is funded, many of which are competitive grants that school districts must research and navigate in order to obtain funding for their students.

Necessary State Action for Achieving Constitutional Compliance

The Campaign for Educational Equity (CEE) will continue to press 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 the NYSER litigation that is now pending before the New York State Supreme Court. In that case, the plaintiffs are claiming, based on research and recommendations from CEE, 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
• Reduce costs without violating children’s constitutional rights by eliminating unnecessary mandates, revamping ineffective requirements, and providing school districts clear guidance on how to maximize cost efficiency and cost effectiveness 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. 

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[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]”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.