THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK ALBANY, NY 12234

James A. Kadamus, Deputy Commissioner
Office for Elementary, Middle, Secondary and Continuing Education
Room 875 EBA (518) 474-5915

Attached for your information is the Regents proposal on State Aid to school districts for school year 2002-03. The focus of the proposal for the coming year is to improve the formulas to help students meet State learning standards. The Regents approved it on December 21, 2001. This proposal represents a significant departure from the current formula. It provides for an increase of $599 million, 4.7 percent, over school year 2001-02.

• The proposal consolidates eighteen existing formulas into four consolidated formulas as follows:
• Eight existing aids are merged into a single, more flexible Consolidated Operating Aid formula.
• Five existing aids are combined into a new Gap Aid
• Three existing aids are merged into a new Instructional Materials Aid
• Two existing aids are combined into a new Instructional Equipment Aid.
• The Consolidated Operating Aid formula and the Gap Aid formula are both adjusted to reflect regional variations in cost.
• Districts will be afforded limited protection against losses in Consolidated Operating Aid. Most districts will be guaranteed that their loss will be no greater than five percent of the amount they received in the year prior to the base year. If districts are making a low tax effort, however, that loss could increase to as much as fifteen percent of the base-year amount. In the first year of the proposal, as a result of the anomalies introduced by the Baseline Budget, districts experiencing extraordinary year-to-year increases in formula aid will be subject to a limit on growth that reflects district need. This limit on growth will be phased out by 2006-07.
• The Gap Aid formula focuses resources to those districts with high concentrations of pupils needing extra time and extra help, and with limited fiscal capacity to raise resources locally.
• Special Services Aid is enhanced to aid occupational education programs in the Big Five City School Districts in a manner similar to other districts that are eligible for BOCES Aid.
• Public Excess Cost Aid is adjusted to provide a greater incentive to districts to place pupils with disabilities in integrated settings with their non-disabled peers.

The attached charts illustrate how the aid will be distributed. Please note that Building Aid is not included in the summary because the relevant data are not due from the school districts until January 15^th, as a result of changes in the Building Aid formula that were enacted this fall. Without this information, the Department is unable to estimate what the increase in Building Aid will be.

Exhibit A shows the aid requested in the Regents proposal compared with the aid allocated for 2001-02. Since a lump sum was allocated for most aids in 2001-02, amounts are not displayed for most individual aid categories. Exhibit A shows a Regents recommended allocation for General Support to Public Schools of $13,354 million, a $599 million increase over the amount allocated in 2001-02 of $12,755 million.

Exhibit B shows the distribution of proposed computerized aid per enrolled pupil compared with 2001-02 allocations for six categories of school districts, ranked according to their pupil need and resource capacity. See page 33 for definitions of these need/resource capacity categories.

Exhibit C shows for high need school districts compared with all others, the share of the proposed increase compared with 2001-02 aid. The Regents recommend that 87 percent of the State Aid increase for 2002-03 go to high need school districts.