February 9, 2004

• Introduction
• Overall Aid
• Flex Aid
• Cuts to Reimbursable Aids
• Local Control
• State Education Department
• State Budget Process
• Conclusion

Introduction

Senator Johnson, Assemblyman Farrell, honorable members of the Senate and Assembly, good afternoon. My name is Edward McCormick. I am Chair of the Educational Conference Board. Thank you for giving me the opportunity to comment on the Executive Budget Proposal.

As you may know, the ECB is a coalition of the major education organizations in New York State - the Conference of Big Five City School Districts, the National Education Association of New York State, New York State Association of School Business Officials, the New York State Congress of Parents and Teachers, the New York State Council of School Superintendents, the New York State School Boards Association, the New York State United Teachers, and the School Administrators Association of New York State. This broad coalition of parents, teachers, school administrators and school board members work together to enhance and improve the quality of education in New York State. It is a privilege to speak on behalf of people who do such important work.

While I am new to this post, I have devoted a substantial portion of my life to advocating and promoting public education. I have served as a member of the Arlington Central School District Board of Education for 18 years as well as serving as president of the Dutchess County BOCES board and now on the Roosevelt school board in Nassau County. I have also had the distinct pleasure of serving as president of the New York State School Boards Association in 2000 and 2001.

My comments today will focus on the primary observations and concerns the ECB collectively has with the Executive budget proposal. I will not provide an all-inclusive analysis. Most of our member groups will also be presenting their own testimony today.

This year, public education again confronts financial and political challenges. We know you will again face tough choices in prioritizing scant resources. You demonstrated your capacity and willingness to do this last year when you restored $1 billion in education aid cut by the Executive's budget proposal. Commensurate determination is needed this year.

The fiscal outlook is compounded by the Court of Appeals ruling in CFE v. State. This landmark decision requires you, your colleagues and the Governor to revise New York's broken school finance system, and do so by July 30, 2004. That date is fast approaching.

As formidable as these challenges are, they are equally historic opportunities. The Court of Appeals has provided the impetus to once and for all rid New York of its convoluted, opaque, inequitable finance system and replace it with one that is simple, transparent, equitable and understandable. The time is now. The ECB urges you to seize this day.

The Executive budget proposal sees the challenges and offers a far very promising first step toward taking advantage of the opportunities. Unlike a year ago, the Executive's budget proposal does not drastically reduce education aid. Also unlike last year, programs for which aid has been historically cut have instead been frozen at last year's levels. The budget proposal also identifies the CFE decision as an historic opportunity and proposes creating a Sound Basic Education account that would provide additional aid to assist New York City and other high need districts in delivering an adequate education.

These are all positive steps which we feel evidence the Governor's interest and willingness to work with the Legislature collaboratively to help aid education and address finance issues raised by the CFE case.

However, the Executive budget proposal does not go far enough. The overall aid level proposed amounts to providing districts the same aid they received last year. After a $185 million cut in aid last year, districts simply cannot afford this. The Governor's Flex Aid proposal actually freezes 68 percent of the total aid - aid categories that represent the State's primary vehicles of support for instruction. Allow me to elaborate.

Overall Aid

The overall level of aid proposed is inadequate. This can best be illustrated using a recent ECB analysis:

- Salary costs are likely to increase on average by 3.5 percent next year. This estimate is consistent with projected nationwide increases in private sector salaries;

- Fringe benefit costs (pension and health insurance costs) will likely rise by at least 10 percent next year - in fact, the Governor's budget forecasts a 13 percent increase in these costs for the State and school costs are likely to be higher; and,

- Non-personnel costs would increase by 2.1 percent - this is consistent with DOB projected increases in the consumer price index.

To avoid shifting new burdens to local taxpayers we advocate that the state fund one-half of the cost of these increases. In contrast, the Executive budget proposal amounts to a net freeze in spending. Thus, locals would need to make up the entire increase in spending locally. This would translate into double digit local tax increases - some as high as 20 percent in low wealth districts.

Voters in virtually every school district agreed to higher local taxes last year. They are unlikely to do so again this year. That means, if the Governor's budget is enacted, local school district budgets will go down, forcing districts to adopt contingency budgets thereby cutting staff, programs and most importantly opportunities for children.

Simply put, we need more than the Governor has offered. We cannot ask school districts and voters to repeat the actions of last year in an attempt to accommodate escalating fixed costs.

Flex Aid

ECB members have supported flexible spending at the local level. Local leaders are the best judges of the effective distribution of funds locally. We find the general premise of Flex Aid appealing. However, as proposed in the Executive budget, Flex Aid would amount to freezing 68 percent of all school aids. Such a freeze would especially hurt poor districts - those which have the least to cut and the most difficulty raising revenues locally. In essence, the Executive offers a perception of flexibility which translates into a rigid reality.

Cuts to Reimbursable Aids

In addition to shortchanging what districts need to meet rising costs, the proposed budget would deny them aid they are counting on for costs they have already incurred. Altogether, the Executive budget proposal would cut major reimbursement aids - BOCES, transportation, and special education - by more than $200 million from what existing formulas promise. This is akin to dining at a restaurant, finishing your entire meal and then choosing not to pay. The deed is done - it is time to pay.

The Executive proposal also again seeks to eliminate BOCES aid for administrative services. This would be especially harmful to poor rural districts. The administrative services BOCES provides these districts allows them to operate efficiently and in a cost effective manner. To eliminate them would force districts, particularly poor ones, to take money away from learning and programs to pay for administrative costs. Children lose the most in such a scenario.

Local Control

The Executive budget seeks to revive a proposal to bring minority rule to school district budgeting. The proposal would require two-thirds voter approval for spending increases more than 120 percent of the inflation rate (2.76 percent for 2004-05). Please reject this proposal as you have in the past. School districts are the most accountable local public budgeting entities in the State - they provide more information in more forums than any other local entity. Please ensure they stay this way: reject the Executive proposal and allow ALL local voters to decide on their tax rates and local school budgets.

The Governor also proposes to enhance STAR benefits to taxpayers in school districts that keep their spending below the same threshold. The ECB is offended at this proposal and how it pits school needs against illusory tax relief.

State Education Department

Finally, we need to share our concern over the proposed cuts to the State Education Department's operating budget. SED serves a valuable and important function. It is a necessary support mechanism for schools. Nonetheless, the Executive budget proposal seeks to eliminate $7 million in funding for the Department. We urge you reject these ideas and maintain the Department's funding at least at current law levels. Doing otherwise will have a direct impact on the movement toward higher standards and raising achievement for all students.

State Budget Process

The ECB is encouraged by your efforts at state budget reform. We applaud your work to convene budget reform conference committees and notice that both houses already appear to agree to a May 1 fiscal year start date. Changing the start date of the state budget process would be helpful. However, we offer caution - any budget reforms must carefully and fully consider the implications for related timelines. Specifically, there is a direct relationship between the start of the State fiscal year and statutorily set date for holding school budgets and board member elections, currently the third Tuesday in May. We welcome reforms and appreciate your recognition of the symbiotic relationship between the state budget and local school budgeting. This relationship must be carried forward in whatever final budget reforms are decided upon.

Conclusion

In closing I think it is apt to reflect on the fact that we embark on these challenges in the same year that we celebrate the 50th anniversary of the Supreme Court's decision in Brown v. Board of Education. On May 17, 1954, the Supreme Court concluded that the concept of separate but equal has no place in public education. Fifty years later, with the national education community focused on accountability in terms of testing outcomes, the problem of the racial and ethnic "achievement gap" has emerged.

In 2003, the Education Trust reported the results of the National Assessment of Educational Progress in 4th grade reading and 8th grade math. In 4th grade reading, 12% of African-American students scored proficient compared to 39% of white students. Additionally in 4th grade reading, 61% of African-American students scored below basic, while 26% of white students also scored below basic.

The results are similar when considering the 8th grade math exam where 7% of African-American students and 36% of white students scored proficient. When considering below basic test results, 61% of African-American and 21% of white students scored in that range.

All students, regardless of race or ethnic background, deserve the same opportunity, the same access to a sound basic education. Although it may be difficult to combat all of the out-of-school disadvantages for the public school student, the Legislature can pass education initiatives that target the achievement gap between wealthier students and poor or minority students.

These schools are found largely in poor urban areas. For example, the CFE case identified the importance of having a qualified teacher in every classroom as an essential resource for providing a sound basic education. It is difficult to recruit and retain qualified teachers and administrators to poor urban school districts where there is already a higher percentage of shortages in high need subject areas such as math and science. The legislature can provide resources to high need classrooms and at the same time begin to address the problem of the "achievement gap."

We can take more steps to further the principle identified by Brown v. Board of Education to ensure that equality in public education remains an important goal. Working together to comply with the CFE decision can help us meet that objective.

There is a connection between poverty, pupil needs, resource allocation and academic results. The New York State Court of Appeals sees the connection; the ECB sees the connection; we hope you will fashion a state education budget that also acknowledges the connections between needs, resources and results.

Thank you again for your time. I would be happy to answer any questions.