• State Budget
• State Aid Reform
• Governor's Proposals
• State Budget Process Reform

State Budget

• At best, the Governor's school aid proposal amounts to about a freeze on aid for operating expenses ($152 million of the overall $147 million increase is due to building aid).
• School costs are not frozen. ECB estimates overall school costs would rise by $1.3 billion based on conservative assumptions:
• 3.5 percent increase in salaries, per nationwide private sector trends;
• 10 percent increase in fringe benefits - very conservative: Governor projects 13 percent for state agencies; and
• 2.1 percent for non-personnel costs, per DOB fall inflation forecasts

• Districts are reporting that increases in pension contributions and health insurance alone will drive overall spending up by 3 or 4 percent even if everything else could be frozen.
• Major reimbursement aids - BOCES, transportation, and special education - would be cut by more than $200 million from what districts are counting on under existing formulas. This will shift costs to local taxpayers.
• All districts are worried about maintaining the capacity they have built to help students reach higher standards. The poorest districts face choices between huge local tax increases or deep cuts to basic programs.
• A New York State School Boards Association survey found that 70 percent of all districts expect to have to enlarge class sizes if the Governor's aid proposals are adopted; rural districts would expect to increase local taxes by 14 percent on average.

State Aid Reform

• The Legislature and Governor should enact reforms this year - do not risk turning school aid over to a court-appointed special master
• Reform should be statewide - citizens in other communities should not be forced to follow New York City's torturous legal route to obtain the State Constitution's promise of a sound basic education for their children.
• Multiple studies are pointing to similar conclusions: state aid needs to be significantly increased to enable high needs districts to provide a sound basic education.
• No district should lose aid as a result of reform.

Governor's Proposals

Please reject these proposals from the Governor:

• Two-Thirds Voter Approval for School Budgets: The Budget proposes requiring two-thirds voter approval for school budgets with increases greater than the current contingency budget cap (2.76 percent for 2004-05) - the Legislature has repeatedly rejected this proposal in the past., it would establish "minority-rule" in school district budgeting.
• "STAR Plus:" The Budget would tie enhanced STAR benefits ("STAR' Plus") to restraint on school spending (the proposal would allow enhanced benefits only for taxpayers in districts that keep spending increases below 2.76 percent) - this would put schools in a no-win position, especially given current cost pressures: cut basic programs or deny their taxpayers a benefit.
• 3020-a Cost Shift: The proposed Budget would shift costs for 3020-a teacher discipline hearings from the state to school districts - this will not save the state much but will impose a significant cost on districts that need to use the process.
• Building Aid Priority Project Funding: As in years past, the Budget would restructuring Building Aid as a priority-project approach - this would make it impossible for school districts to assure local voters of continuing state assistance when seeking project approval.
• Special Education Aid Into "Flex Aid:" The Budget would consolidate aid for public school special education services into "Flex Aid" - this would deny schools the assurance of additional aid when they commit to serving additional students with disabilities.
• Transportation Aid Cap: The Budget would limit transportation aid for increases in transportation operating costs to 2.5 percent - this threshold is below current inflation in fuel costs and will only shift costs to local taxpayers.
• Amortizing Aid for School Bus Purchases: The Budget proposes to school bus purchases only on an amortized basis - this will impose borrowing costs on local taxpayers and encourage districts to contract-out for transportation services.
• BOCES Aid for Administrative Services: Reviving a proposal rejected a year ago, the Budget would eliminate state aid for BOCES administrative services - this would be especially harmful to small, poor, rural districts that often need these services to comply with state mandates.

State Budget Process Reform

• Moving the start of the state fiscal year to May 1 could cause problems for school districts by pushing school district budget votes closer to the end of the school year, but ECB will support a change if there are also reforms that will make school aid more predictable.
• The procedures for school district budget votes will need to be modified. The current statewide voting day should be pushed back to the first Tuesday in June. Other time lines would need to be modified - some current requirements should be dropped altogether.
• The state should make a later start to the state fiscal year more manageable for schools by making state aid more predictable - by funding school aid through rolling, two-year appropriations that would be updated each year. Article VII, section 7 of the State Constitution permits this approach.