The Rockefeller Institute of Government on Monday released a highly anticipated reassessment of the Foundation Aid formula, the primary formula New York state uses to fund public schools.
The report was a compromise as part of budget negotiations earlier this spring after Gov. Kathy Hochul set the stage by insisting on ending Save Harmless, also known as "hold harmless," which ensures districts don’t receive less Foundation Aid funding than the previous year, even if their population decreases.
Legislative and education leaders pushed back, and advocated for a study of the outdated formula instead.
Dropped at 5 p.m. Monday, the recommendations include:
- Phasing out 50% of "save harmless" over five years as Foundation Aid formula reforms are made; some districts would eventually not be eligible for Save Harmless
- Allowing districts to increase their unrestricted year-end fund balance to 10%
- Replacing the current out-of-date poverty measure with an annually updated federal measure
- Scaling aid for students with disabilities based on their level of need
- Eliminating the $500 per pupil flat grant, and proposing the $41 million that would be saved by the elimination to wealthy districts be reallocated through the general Foundation Aid formula
According to the Rockefeller Institute, the report should be considered “a menu of options for policy makers to consider,” with the possibility of phased-in changes so no districts see a large year-to-year change in funding. The report is available publicly here.
“We’re paying for empty seats” was the governor’s refrain throughout the spring as she took aim at the save harmless provision.
“Regardless of if your population goes down 50 percent, that you still get the same money you got the year before, a formula that goes back to 2008, I’m just asking everybody to look at this rationally,” she told reporters in March.
It was a proposal that rattled school officials and lawmakers alike, and at their urging, Sen. Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie gave the idea a resounding thumbs down.
“We are very, very concerned. We pride ourselves on being the education conference,” Stewart-Cousins said at a news conference in January.
What everyone did agree on was that the formula was vastly out of date, relying on population data from the 2000 Census. When the dust settled and the negotiated budget was passed, rather than cutting save harmless, Hochul and lawmakers and agreed to a study to revise the formula.
“The Foundation Aid Formula needs to be revisited. It’s using 20-year-old data,” Heastie said as the budget was being negotiated in April.
After seven months of research and five public hearings, the Rockefeller Institute faced a Dec. 1 deadline to present their recommendations to state leaders.
Speaking earlier Monday, Bob Lowry, deputy director of the New York State Council of School Superintendents, said a report that offers options would play out differently than one that offered a one-size-fits-all approach to revising the formula.
“It will be the first word not the last,” he said of the study. “The next word will be the governor’s budget proposal. What will she propose in January? Will she just take what the institute recommends and make that her proposal? And how will the legislature respond?”
He stressed that he expects to once again see resistance to any recommendations in the executive budget that would result in a drop in funding, but a report designed to phase in changes could offset that.
“Some things could be done now, other things would require more time and funding to study and develop,” he said.
Asked last month how the governor would use the study as she finalizes her executive budget over the next month, Budget Director Blake Washington said that idea of timing would play a role.
“We obviously have a financial plan to run, but putting all of those things together, figuring out what the right mix is, what can you solve for in the near term? What do you need to solve for in the long term?” Washington said.