January 19, 2010

Information from Gov. Patterson's Web site regarding education funding in the budget - http://publications.budget.state.ny.us/eBudget1011/fy1011littlebook/Education.html

A summary provided by the New York State Council of School Superintendents

School Aid
The Governor recommends a $1.1 billion (5 percent) cut in School Aid.

Individual aid categories are funded according to current law formulas (e.g., current law calls for Foundation Aid to be frozen, while Building Aid, for example, increases by $222 million). But then similar to last year, a bottom-line reduction is applied against total aid (excluding Building Aid and Universal Prekindergarten Aids). This time the bottom-line reduction is called a “Gap Elimination Adjustment.” The GEA reduces aid by $1.4 billion statewide. The GEA is partially offset by increases in other aid categories under the current law formulas to produce the net overall year-year cut of $1.1 billion.

Here is how the Governor’s Budget explains the GEA: “The Executive Budget recommends a one-time $1.4 billion reduction to certain formula-based School Aid categories. This is comprised of a one-year $2.1 billion Gap Elimination Adjustment for the 2010-11 school year, partially offset by the use of the remaining $726 million of the American Recovery and Reinvestment Act (ARRA) State Fiscal Stabilization Fund - Education Fund award. The reduction is structured so that a low-wealth district will face a smaller percentage cut than a higher-wealth district. In addition, the GEA is adjusted for student need, administrative efficiency, and residential tax burden.”

The state has $726 million in federal Stabilization Aid remaining (the funding used to pay for offsetting the Deficit Reduction Assessment proposed in last year’s Governor’s budget). In the budget proposed by Governor Paterson today, the remaining $726 million in Stabilization Aid is used to partially offset the proposed Gap Elimination Adjustment. Unlike last year, the federal aid is not available to the Legislature to pay for restorations it would choose to make.


Other cuts:

• A wealth adjustment would be applied to state reimbursement for Summer School Age Special Education (current the state pays 70 percent of costs for all districts. The budget would also limit reimbursement for claims for years prior to 2009-10 (it is unclear whether payment would be delayed or permanently denied). This is estimated to save the state $86 million.
• Prospectively (for costs incurred in 2010-11), the growth in Preschool Special Education costs to be paid by counties would be limited to 2 percent, with school districts to assume any growth in costs above 2 percent.
• The STAR exemption for homes valued at more than $1.5 million would be eliminated. The “floor adjustment” that limits possible annual reductions in STAR exemptions would be increased from 11 percent to 18 percent. The budget would also restructure the New York City Personal Income Tax credit enacted as an analog to the STAR program to save the state $143 million.
• Funding for Teacher Centers would be eliminated.