Next year’s state budget outlook is darker than it’s been for several years, which is bad news for schools in New York. 

An analysis of the latest state budget by Comptroller Tom DiNapoli shows that spending will grow nearly 4% year over year amid a projected drop in revenues and as temporary federal aid is spent down.   

Additionally, gaps between spending and tax revenue will reach $9.1 billion next year and grow to $13.9 billion the following year and $13.4 billion in the year after that. 

That's $36 billion over three years, an increase from the $21 billion initially projected when Hochul presented her budget at the start of the year.

It's a situation that Dr. Rick Timbs, executive director of the Statewide School Finance Consortium, said means schools need to brace for tough budgets.

“It means they’re going to be under a lot of financial stress over the next three, four, five years,” he said.   

That said, districts have seen quite a bit of cash coming their way from both the federal government and from state government via the promised “full funding” of the Foundation Aid formula, the formula that governs how much each school district gets in aid from the state.

There are school districts that have quite a bit of cash saved thanks to those federal funds which gave them a chance to rebuild resources after the COVID-19 pandemic. 

But not all districts are in a good financial position. 

“Even if they have significant savings, because of inflation and labor costs, we’re in for a rough road over the next few years,” Timbs said. 

An update of the Foundation Aid formula could usher in a more equitable distribution of aid, according to Timbs, but he isn’t optimistic that an update will take place this year. 

“The Legislature had a great opportunity to start a Blue Ribbon commission. Our organization has called for a Blue Ribbon commission to study this for the last five years because we could see this coming,” Timbs said. “We knew that once (schools received the balance owed to them from the Foundation Aid formula), which is inequitable at best, then the problem would be, how do they continue to fund it, and how can we make it more equitable and the funding more adequate.”

Timbs isn’t optimistic that the formula will be updated this year.

In response to a request from Capital Tonight, the New York state Department of Education sent a statement that also mentioned the failure of the Legislature to fund a commission to perform a needs assessment to update the Foundation Aid formula. The statement went on to say NYSED will take a leadership role in engaging with stakeholders to create a new formula.

“While the Department lacks the resources to provide the depth of analysis and public engagement that is needed to address the core questions and provide a comprehensive analysis, the Department can address some of the well-understood limitations and develop a substantive set of options to improve Foundation Aid.

The Department plans to take a leadership role in reviewing the formula and engage with stakeholder groups, including teachers’ unions, parent-teacher organizations, school business officials, and superintendent and school board groups, as part of this process.”