Meeting of the Board of Regents | February 2008

Friday, February 1, 2008 - 9:05am

sed seal

siganture of Johanna Duncan-Poitier THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

TO:
FROM:	Johanna Duncan-Poitier
SUBJECT:	Executive’s Budget Recommendations
DATE:	January 29, 2008
STRATEGIC GOAL:	2 and 5
AUTHORIZATION(S):

SUMMARY

Issue for Discussion

Does the Board of Regents have any questions concerning the Executive’s Budget recommendations for 2007-08?

Reason(s) for Consideration

For information.

Proposed Handling

This question will come before the Subcommittee on State Aid at its February 2008 meeting.

Procedural History

The Regents adopted their State Aid Proposal for 2008-09 in October 2007. The Executive Budget was released on January 22, 2008.

Background Information

Issuance of the Executive’s Budget recommendations each year begins the State legislative process. Understanding the new Governor’s budget recommendations related to education will help to inform the Regents State Aid recommendations for 2009-10 that will be developed over the coming months.

Recommendation

Not applicable.

Timetable for Implementation

This discussion will inform the development of the Regents State Aid proposal to occur from February 2008 to October 2008.

SCHOOL AID PROPOSAL

The Executive Budget for State Aid to public schools is consistent with the goals advocated in the Regents State Aid Proposal. The Executive Budget continues to phase in Foundation Aid and funding for Universal Prekindergarten programs, although somewhat less aggressively than the mid-year forecasts released by the Executive and the Legislature had projected.

The Executive’s request for General Support for Public Schools (GSPS) is $21.0 billion, an increase of $1.5 billion or 7.4% over current estimates for the 2007-08 school year. The overall increase in General Support for Public Schools is targeted at high need districts, which will receive an estimated 72.5% of all computerized aids.

The Executive proposal is accompanied by continued support for the Contracts for Excellence that were instituted in 2007-08. The Executive Budget also proposes additional refinements in the Contract for Excellence program, including an expansion of allowable activities to include programs to improve the achievement of English Language Learners and inclusion of the Regents recommendation that schools entering into a contract do so for a three year period.

The Executive Budget proposes to continue the scheduled phase-in of the Foundation Aid formula which replaced thirty existing formulas and grants. For the 2008-09 school year, the Executive Budget funds Foundation Aid at $14.5 billion, a year-to-year increase of $899 million, or 6.6%.

In computation of Foundation Aid, districts will be allowed to use a selected Adjusted Gross Income in order to mitigate the impact of large year-to-year fluctuations in data. This is consistent with current formula provisions governing the use of property valuation data and selected pupil counts. The State Sharing Ratio is also enhanced for high-need districts. The Executive also proposes a reduction in the minimum and maximum increases guaranteed to all districts. Currently, every district receives a year-to-year increase of at least 3%. The Executive proposal, reduces that minimum guarantee to 2%. The Executive also recommends that the maximum increase for any district be limited to 15%, a reduction below the current 25% maximum.

The Executive Budget continues to increase State support for quality prekindergarten education, with the goal of making it universally available by 2010-11. Funding for prekindergarten programs is based on the same foundation amount proposed for pupils in grades K -12, and overall funding is $452.3 million in the 2008-09 school year, an increase of $79.0 million, or 21.2% over the 2007-08 level of $373.3 million.

These initiatives are complemented by the continuation of incentives for schools to implement full-day kindergarten programs, including a $2 million grant program that was instituted in 2007-08 to assist schools in making that transition.

The provisions for apportioning both Public High Cost Excess Cost Aid and Private Excess Cost Aid remain unchanged. The Executive Budget does not extend the one-year provision enacted in 2007-08 for Supplemental Public Excess Cost Aid for districts with small Foundation Aid increases. Public Excess High Cost Aid increases by $25.1 million from $412.3 million to $437.4 million, a growth rate of 6.1%. Private Excess Cost Aid will increase from $222.4 million in 2007-08 to $234.4 million in 2008-09, an increase of $12.0 million or 5.4%.

The Executive Budget proposes that BOCES Aid for all expenses other than BOCES capital costs be computed through use of the State Sharing Ratio rather than using the BOCES Aid Ratio. The State Sharing Ratio uses a blend of property value and income in determining the district's fiscal capacity, whereas the current BOCES Aid Ratio is based on property valuation per pupil. The minimum aid ratio of 36% is continued for 2008-09, but will be reduced in succeeding years until it reaches 6.5%. BOCES Aid is estimated to decrease by ($31.4) million or 5%, to an overall level of $594.0 million.

Special Services Aid (which provides aid for career education activities and administrative computer services to the Big Five and other districts that are not components of BOCES) is enriched by increasing the career education ceiling on a wealth-equalized basis. Special Services Aid is estimated to be $171.3 million, an increase of $39.1 million, or 29.6% over 2007-08 levels.

The Executive Budget continues the preexisting allocation formulas for Textbook Aid, Library Materials Aid, Computer Software Aid and Computer Hardware Aid.

Building Aid and Building Reorganization Incentive Aid are estimated to total $1,828.4 million for 2007-08 and $2,002.4 million for 2008-09. This increase of $174.0 million represents 9.5% growth over the previous year. The Executive Budget continues Building Aid formula changes that were enacted as part of prior budgets by deferring until 2009-10 all aid for new projects that have not fully documented their eligibility by November 15, 2007.

The Executive also proposes that aid for new projects submitted by New York City be deferred until eighteen months after the date the projects are approved by the Commissioner.

In addition, the Executive provides $135 million in State funding to pay debt service on bonds issued to provide EXCEL Aid for capital construction. Of that amount, $109 million is attributable to projects funded in New York City, and an additional $26 million is apportioned for other eligible projects.

Transportation Aid for operating expenses will be calculated under the existing formula. Transportation Aid and Summer Transportation Aid are estimated to grow from $1,412.9 million in the 2007-08 school year to $1,521.0 million under the Executive proposal, an increase of $108.1 million or 7.7%.

The Executive proposes continuation of Charter School Transitional Aid, providing $21.2 million in State aid to districts that are significantly impacted by a concentration of charter schools, an increase of $0.9 million or 4.3% over 2007-08 levels.

The Executive Budget also extends last year's one-year provision for High Tax Aid, but reconfigures it to better focus State resources on high-need and average districts with relatively high residential tax burdens compared to their income levels.

The Executive has also fully funded the $6.0 million in Academic Improvement Grants to support the Roosevelt School District. In addition, $4 million is provided for a Community Schools Pilot program in Rochester, and $17.5 million, a year-to-year increase of $9.0 million, is provided for a Supplemental Educational Improvement Plan Grant for Yonkers. Also, $178.9 million is provided to New York City in Academic Achievement Grants, a year-to-year increase of $90.0 million.

The Executive Budget also recommends continued funding of $13.8 million to provide health services in the Big Four City School Districts.

The Executive also recommends a $2.0 million increase in Bilingual Education Grants, for total funding of $13.5 million. The increase will be used to implement model programs to serve English language learners.

STATE OPERATIONS

The 2008-2009 Executive Budget recommendations reflect an agency-wide net increase of $1.425 million in General Fund State Operations funding as follows:

Continuation of the $15 million General Fund appropriation for accountability activities, including the development of performance metrics and school standards of excellence
$1.675 million increase in General Fund State Operations funding for Personal and Non-personal Services
A 50 percent reduction ($500,000) in funding for the administration of criminal history checks
$250,000 of the EMSC General Fund appropriation is earmarked for the leadership development initiative
Elimination of General Fund appropriations earmarked for the development of the State Aid Management System (SAMS) ($1.6 million) and the New York State Testing and Accountability Reporting Tool (NYSTART) ($683,000) to be replaced dollar for dollar with Office for Technology funds derived from bond sale revenues

The 2008-2009 Executive Budget also recommends:

Authorization to fill an additional 113 FTE for non-General Fund programs where funding is available
A $15 million sweep of funds from the Cultural Education Account earmarked for enhancing the public display of the collections of the State Museum, Library and Archives to be replaced dollar for dollar with bonded Capital construction funds (the remaining $5 million of the $20 million funding for NYS Museum renewal remains in the Cultural Education Account)
Authorization for the Department to retain the administrative fee incurred in processing credit card transactions when physicians choose to pay by credit card
Statutory language to allow the Department of Environmental Conservation to administer the Biodiversity Research Institute program, notwithstanding New York State Education Law
Student Lending Education Account appropriation authority totaling $2.2 million and statutory authorization for the Department to enter into discussions with the Office of the New York State Attorney General to identify a source of funding to implement the Student Lending, Accountability, Transparency and Enforcement Act (SLATE)

AID TO LOCALITIES

The Executive Budget recommends funding for the following new General Fund programs:

After School Programs – to provide academic enrichment outside of the regular school hours primarily to children who attend high-poverty and low-performing schools and schools identified as being in need of improvement ($10 million)
Healthy School Program – to increase State reimbursement for school meals so that all children eligible for reduced price meals will receive school meals at no cost ($5 million)
Mentoring and Tutoring Program – to produce outcomes, based on effective model programs, that include, but are not limited to, improved graduation rates ($1 million)

The Executive Budget recommends additional funding for the following General Fund programs:

County Vocational Education and Extension Boards (an additional $300,000 for a total of $1 million)
Nonpublic Mandated Services Aid (an additional $15 million for a total of $142.4 million)
Preschool Education (4410) (an additional $18.4 million for a total of $681.5 million)
Private (4201) Schools for the Blind and Deaf (an additional $4.73 million in Federal IDEA funds for a total of $122.83 million)

The Executive Budget recommends a reduction in funding for the following General Fund programs:

Adult Literacy (a reduction of $1 million for a total of $5.325 million)
Aid to Independent Colleges and Universities Program (Bundy Aid) (a reduction of $5.288 million for a total of $40.95 million)
Aid to Public Libraries (a reduction of $5 million for a total of $97.2 million)
Higher Education Opportunity Program (HEOP) (a reduction of $1.037 million for a total of $24.2 million)
Independent Living Centers (a reduction of $1.5 million for a total of $11.731 million)
Liberty Partnerships (a reduction of $538,000 for a total of $12.018 million)

The Executive Budget recommends elimination of the following General Fund programs:

Civility, Citizenship and Character Education (a reduction of $475,000)
Missing Children Education (a reduction of $1 million)
Nursing Expansion Program (a reduction of $1.027 million)
Prevention of Instructor Turnover (a reduction of $4 million; funding transferred to the Federal IDEA program)
SUNY Center for Autism (a reduction of $500,000; Federal IDEA funding of $500,000 continues)
Transferring Success (a reduction of $630,000)

The Executive Budget also recommends:

A 4 percent cap on the growth of county costs for preschool special education costs outside of New York City with the State assuming the cost of any growth above the cap; by the 2009-2010 school year the growth will be limited to 3 percent
Shifting responsibility from counties to School Districts by increasing School District programmatic responsibilities for the evaluation of preschoolers suspected of having disabilities and requiring that School Districts assume a portion of the costs of preschool evaluation and Committee on Preschool Special Education (CPSE) administration (the Federal IDEA program currently funds $9.5 million of these CPSE costs)
Increased State reimbursement to assist school districts with any additional costs associated with purchasing healthier food, beginning in 2009-2010

CAPITAL PROJECTS

The Executive Budget recommends funding for the following Capital Projects:

$2.25 million - Alternate emergency exit in the Cultural Education Center
$2.5 million – Upgrade of the fire safety system and environmental controls and renovation of the restrooms in the Cultural Education Center
$15 million – Enhancing the public display of the collections of the State Museum, Library and Archives (this funding offsets a corresponding reduction in Cultural Education Account revenue previously earmarked for the NYS Museum renewal)
$4.325 – Preservation and stewardship of the collections in the Cultural Education Center
$12.585 million – New Cultural Education records storage facility
$14 million – Local Library Construction
$2.33 million – Safety and environmental control improvements at the Rome State School for the Deaf
$.65 million – Health and safety, security, access and other improvements at the Batavia State School for the Blind
$2 million – Education Building Annex mechanical system upgrades
$1.0 million – Minor Rehabilitation Projects Department-wide pursuant to a plan to be approved by the Division of the Budget