At a time when the Regents have set higher standards for graduation throughout the State’s public schools, State Aid to school districts must be better targeted to ensure all students, regardless of where they live, attend schools with the resources necessary to meet State learning standards. Widespread public acceptance of the standards makes it clear that all students are expected to meet the new standards before graduating from high school. Furthermore, it is clear the public expects schools to operate efficiently and effectively.

With this State Aid proposal, the Regents declare that there must be a serious commitment of State Aid to school districts with the neediest students. Aligning State Aid policy with the State’s higher standards policy will ensure the success of many students living in poverty, pupils who have limited English proficiency, and who are recent immigrants. Their success will benefit all New Yorkers. The Regents are committed to ensuring that Education Department and school personnel are accountable for reporting on student performance related to the standards and ensuring that resources are used effectively to help all students meet the standards.

State Aid to education has not historically been distributed in a manner that both recognized student need and provided incentives for academic improvement. Schools and districts had limited accountability for the results of education spending. Rather, State Aid was distributed based primarily on the wealth of a district as measured by its real estate assessments and income of residents (the lower the value of its combined wealth, the more the aid) and its student attendance. Accordingly, State Aid was distributed on a district’s theoretical capacity to pay for education, with limited regard to educating its students to desired levels.

The New York City School District has been affected by this process with its near-average wealth and high student need. The result is that the district has never enjoyed State Aid increases that reflect the cost of educational services provided to most students in the rest of the State. Student results have shown that New York City and many other schools in similar circumstances have great difficulty in meeting student needs.

There are many benefits to all New Yorkers of changing from the current system to funding high performance for all students.

• As standards increase and schools have the resources to meet them, the level of learning in New York State will rise.
• Costs for remediating failure in schools will decline.
• Graduates of New York State’s schools will be more prepared to meet the challenges of work, postsecondary education and citizenship.
• Related costs for public assistance, health and social services, and criminal justice will decrease dramatically.
• The State’s productivity will soar. As well educated New Yorkers produce more, they will generate more income taxes and sales taxes, thus allowing reduced tax burdens for all New Yorkers.

This Regents proposal acknowledges that the cost of education is substantial. However, if adequate education resources are not invested wisely to raise student achievement, the State and nation will face exorbitant costs for public assistance, criminal justice and lost productivity that inevitably follow from educational failure.

The Regents believe that high standards require the careful redesign of State Aid to education. Aid must be targeted to school districts where needs are greatest and students are likely to have the farthest to go to meet the standards. Academic improvement is beginning to occur around the State as a result of the raised expectation of the standards, careful use of resources for extra time and help and strengthened school teaching and leadership. In addition, the Regents recommend that additional resources, carefully distributed to areas of need, be coupled with efforts to strengthen accountability for results and the cost-effective use of school resources.

The Regents State Aid proposal for 2000-2001 presents funding changes to support the State’s move to higher learning standards for all students. This increase in the State’s productivity will require much greater cost-effectiveness in the use of all school resources. The proposal recognizes the significant differences among New York State school districts in school costs and pupil needs and recommends the careful redesign of Operating Aid, the largest aid program, to account for these differences. This allows greater precision in equalizing State Aid and targeting it to meet higher learning standards. As a part of this process, the proposal recommends simplifying State Aid by consolidating the separate aid programs of Tax Effort, Tax Equalization and Extraordinary Needs Aid together with Operating Aid. By this consolidation, we create a pool of approximately $7.2 billion and allocate it according to school district costs, pupil need and fiscal capacity.

The proposal recommends a two-tier strategy for changing school funding. The Tier One strategy is a first-year proposal for funding reform that will recommend substantial increases in allocations to high need districts. Using estimates of 2000-01 school year State Aid allocations, the Regents make realistic short-term recommendations for providing more resources to high need districts.

The proposal recommends a statewide increase of $1.327 billion for school year 2000-01 with an increase of $528 million for the New York City School District, coupled with greater accountability for results. This increase will raise the New York City School District’s share of total State Aid for school operation to approximately 40 percent for school year 2000-01. The Tier Two strategy is a midrange (2002-2005) proposal that seeks to make more fundamental changes in core operating formulas in order to direct more operating aid to districts with the greatest need and costs, while gradually phasing out caps on year-to-year increases in aid.

When combined over the next five years, the two tiers of this proposal seek to direct additional resources to strengthen school teaching and leadership, support extra time and help for students who need it and upgrade school library programs. This proposal will provide direct help to meet the standards for those high need school districts with the greatest costs by allocating more aid to these districts. It will require school districts to make a reasonable funding effort.

The result will be a fairer distribution of State resources in order to achieve our goal of eliminating the achievement gap among schools over a five-year period. In addition, districts receiving additional aid will be held accountable for the cost-effective use of those resources to improve student achievement.

Specifically, the proposal recommends:

1. Targeting aid to high need school districts to close the gap in student achievement by:

• Reducing and simplifying aid formulas for school operation;
• Adjusting Operating Aid for differences in school costs and pupil needs; and
• Relieving the cap on Operating Aid for high need school districts in the first year; eliminating the cap for all school districts after five years; and providing aid for a five-year period to help districts transition to the new funding formula.

2. Strengthening teaching and leadership in schools with concentrations of student poverty by:

• Using Operating Standards Aid to attract and retain qualified teachers in such schools, including sustained high quality training focused on subject content and teaching skills; and
• Increasing funding for Bilingual Education grants aimed at improving the preparation and recruitment of teachers of English language learners.

3. Ensuring school success through extra time and help by:

• Restructuring and increasing the existing Educationally Related Support Services Aid by focussing it on academic intervention and support with a new, standards-oriented name, Academic Intervention Services Aid;
• Enriching aid for summer school programs, providing aid outside funding caps, and allowing aid to be paid for transportation to summer school;
• Increasing funding for universal prekindergarten programs to provide students with an extra year of education at a time when quality education is most likely to have lasting benefits;
• Increasing funding for early grade class size reduction to allow teachers to give students more individual help to meet their learning needs;
• Increasing funding for extra instruction for students with limited English; and
• Ensuring that students and school staff are effective users of ideas and information that support the curriculum by upgrading school library media programs through creation of a Public School Library Support Aid, supplementing the existing aid for library materials.

4. Ensuring cost-effective methods and accountability for results by:

• Monitoring the use of funding for low-performing schools in accordance with the System of Accountability for Student Success (SASS);
• Modifying the Building Aid payment timetable to ensure that aid does not flow until debt service is payable; and
• Requiring maintenance of local effort in the Big 5 fiscally dependent city school districts.