January 2014

Governor Andrew Cuomo’s executive budget proposals for 2014-15, while not without some bright points, were largely disappointing, ignoring the ongoing effects on our students — and the risk to New York’s economic future — of the state’s failure to meet its constitutional school-funding obligations.

The good news was that, building on recommendations from his New NY Education Commission, the governor committed the state to implement universal, high-quality full-day prekindergarten programs, entirely funded by the state, within five years. In addition, he proposed a new $2 billion bond act that would provide for enhanced education technology in the schools and additional construction of new prekindergarten classroom space.

The bad news is that the governor’s proposal continues to underfund basic K-12 school operations. His budget actually would provide a substantially smaller increase in basic foundation aid than he proposed and the legislature enacted last year, and it would maintain for the foreseeable future the unconstitutional “gap elimination adjustment” that under his plan would deprive students throughout the state of approximately $1.3 billion for the next school year.

I.            Progress on Pre-K

Last year Governor Cuomo announced his support for full-day prekindergarten programs for students in high-need school districts and proposed a $25 million competitive grant program to initiate the effort. This year, he has taken a major leap beyond that initial gesture. The executive budget proposes that the state achieve universal full-day pre-K for all students within five years. For 2014-15, his budget would commit $100 million toward this program, and he anticipates that the state commitment would grow “by at least” an additional $100 million per year for the four years after that. (This funding would be on top of the approximately $385 million the state currently expends to support half-day pre-K in 441 of the state’s 697 school districts.)

Cuomo’s proposal implies that once the state reaches a funding plateau of $500 million above current annual expenditures for full-day pre-K in five years, the funding needs for universal pre-K statewide will have been met. A detailed analysis undertaken by the Campaign for Educational Equity and the Center for Children’s Initiatives last fall indicated that approximately double that amount, or $1 billion in increased funding, would actually be needed to support a high-quality universal statewide program. Cuomo has provided no cost figures or analysis to explain how he arrived at his substantially lower figure.

New York City Mayor Bill de Blasio is still asserting that the city needs to impose a new income surtax on very high-income taxpayers in order to guarantee an effective, high-quality full-day pre-K program for all of the city’s four year olds. De Blasio’s position has merit. Twice in recent years, the state has announced a commitment to achieve universal pre-K (albeit for half-day programs) by a future target date, and both times it has failed to achieve that end. In 1997, the legislature adopted a “LADDER program” that promised full funding for universal pre-K within five years; again, in 2007, Governor Eliot Spitzer promised that this time full funding for universal pre-K would be accomplished in four years. In both of these situations, after two years of increased funding, political support dwindled, the program stalled, and the state remains far from achieving either of these universal pre-K goals.

De Blasio’s “millionaires’ tax” would raise $500 million per year, of which the mayor would allocate $342 million to fund universal pre-K. The $342 full-funding estimate may, however, fall short of the mark. De Blasio bases his figure on an expectation that a high-quality program can be provided in New York City for about $10,000 a year. Such high-quality programs for high-need children have been achieved in the “Abbott” districts in New Jersey, but at a cost of $13,000-$14,000 per year. Governor Cuomo’s promised state funding for full-day pre-K may, therefore, be important as a necessary supplement that can ensure that New York City’s program will be successfully mounted without any budgetary shortfalls.

The remaining approximately $190 million that Mayor de Blasio expects to obtain from his “millionaires’ tax” he would use to provide afterschool programs to two-thirds of the middle school students in the city. Governor Cuomo’s budget proposal also seeks to upstage Mayor de Blasio in this area, as the governor called for a new state afterschool funding program that would provide $200 million per year statewide by year 5. Here again, the amount the governor identified seems inadequate to the need, and no figures explaining this rate have been provided. More troubling, the possibility of these afterschool funds actually materializing seems even more ephemeral than the pre-K funds, since Cuomo includes no additional afterschool funding in his 2014-15 budget proposal and anticipates initiating the program in 2015-16—after his desired reelection.

II.         RETREAT ON K-12 FUNDING

The governor’s budget proposal calls for an increase of $608 million in formula-based aid for K-12 programs in school districts for 2014-15. About $285 million of this amount would support increased reimbursement in expense-based programs such as building aid, pupil transportation, and BOCES support. Only $323 million would be provided for foundation aid, the core operating funds that support basic instructional programs. Technically, the $323 million is not even an increase; rather it is a reduction in the approximately $1.6 billion “temporary” gap elimination adjustment (GEA), a ruse by which the state has, for the past four years, subtracted substantial amounts from the foundation aid owed to school districts in order to cover a supposed shortfall in the state’s overall budget.

Since the governor announced that the state actually has a budget surplus this year that he proposed to use to reduce a variety of business, estate, and property taxes, the avowed justification for continuing the “gap elimination adjustment” no longer exists. In any event, subtracting sums from the amount that the legislature itself has determined is necessary to provide students the opportunity for a sound basic education is a violation of Article XI § 1 of the state constitution. (And the foundation aid base from which the current GEA is being subtracted is itself substantially below the full amount that the legislature determined in the wake of the CFE litigation in 2007 was necessary to meet constitutional requirements. Even with the governor’s slight reduction in the GEA this year, the full shortfall actually comes to approximately $3.5 billion.)

The cap on increases in property tax levies that the governor and the legislature enacted on school districts other than the Big Five cities several years ago will also be more severe this year. Although the cap is generally perceived to amount to 2%, this year the way the applicable formula works out, districts will only be able to raise their taxes by a maximum of 1.46% without obtaining a 60% taxpayer vote. The governor’s tax relief proposals would make it even more difficult for school districts in need of greater increases to obtain the 60% supermajority, since his plan would rebate to each taxpayer the district’s tax increase, but only if the increase is below the cap.

Last year, the legislature increased formula-based aids to school districts by $937 million, a 4.7% increase. The governor’s current $608 million proposal would provide only a 2.91% increase this year. Under the governor’s meager scheme, New York City would receive a 2.76% increase, $200 million (not counting building aid), Syracuse would receive a 1.74% increase, and Buffalo would see only a 1.72% increase. The Education Conference Board estimates that school districts will need at least a 3.7% increase just to meet mandatory cost increases and maintain current programs and staffing levels.

We hope the legislature will not accept the governor’s low figures and will be much more proactive in meeting the pressing educational needs of New York State’s students and guaranteeing their constitutional rights.

Published Wednesday, Feb. 12, 2014