In his annual mid-January budget address, Governor Andrew Cuomo said that if Congress doesn’t send New York State $15 billion in unrestricted emergency Covid-19 aid, taxes will likely go up and spending — including aid to public school districts — is likely to drop. Local school officials are concerned about what that means for their districts as the governor looks to pass his $103 billion spending plan.
In his address on Tuesday, January 19, Cuomo put responsibility for the state’s pandemic-related financial woes on former President Donald Trump’s metaphorical doorstep, blaming the federal government’s response to Covid-19 for a steep drop in sales and income tax revenue.
“What happened to New York was no fault of New Yorkers,” Cuomo said. “It was because the federal government lost track of coronavirus, literally,” adding that the federal government was “legally, ethically and politically responsible.”
Cuomo’s budget proposal includes an increase in school aid of $2 billion, one which he says would take a substantial hit and might even yield cuts should the federal government not kick in $15 billion over the next two years.
Variety of reasons for concern in New Paltz
New Paltz Assistant Superintendent for Business Sharifa Carbon said she was concerned about the governor’s budget address “for a variety of reasons.”
“First, the governor’s executive budget is presented in a manner that could easily cause people to believe that there will be more state aid than districts will actually receive,” said Carbon, citing specific concerns in the proposal:
• “STAR reimbursement to school districts is being listed as state aid, which it is not. It is part of each school district’s local tax revenue and not at all state aid. That is misleading.”
• “The stimulus funds allocated to school districts is offset by a reduction in state aid. This is also how the CARES Act funding was handled. That is not an increase in state aid to school districts.”
• “Most importantly, and most concerning, is the governor’s proposal to combine 14 categories of expense-based state aid into one ‘Services Aid’ block grant, which would be capped at 2021-22 levels, minus a reduction for federal stimulus money allocated this year…The categories include: Transportation Aid, BOCES Aid and Software/Technology Aid.”
Carbon said she’s concerned that Cuomo’s budget proposal changes how districts are reimbursed from how much they actually spend for each service and would instead combine and cap them all based on projections.
“Additionally, the governor proposed to reduce that cap based on federal stimulus money distributed this year,” Carbon said. “The effect is two-fold: 1) A reduction in reimbursement during a time that districts are wrestling with educating children during a pandemic; and 2) A long-term reduction in reimbursement for expenses that are necessary to provide a sound, equitable education to all students. Consequently, all school districts will receive less state aid for required expenses. As time goes on, the funding gap will increase. Districts will receive less reimbursement for expenses that increase annually, such as transportation, career and technical education and educational support services for years to come.”
Carbon said that the net result will be an increase in the deficit of educational funding, many of which were in recent years still seeking to receive the funding indicated by the foundation aid formula. Beyond state aid, school districts are funded by property tax revenue, which in recent years has seen the application of a cap on increases in order to approve spending plans by a simple majority of voters; seeking a property tax increase higher than a district’s cap would require approval by a supermajority of at least 60 percent.
Carbon said she’s concerned about what the executive budget proposal will mean for school districts like New Paltz in the long term.
“The governor’s budget proposal requires school districts to position ourselves for both current and future reductions in state aid, despite stimulus funding from the federal government,” Carbon said. “That potentially impacts everything from operations, to transportation, to staffing to services and supports. Any cuts to state aid are coupled by the property tax cap, which is negatively impacted this year by the CPI of 1.23 percent, the lowest in five years.”
Carbon said she felt hopeful that President Biden’s administration will provide additional federal funding to prevent a flat 20 percent cut in state school aid, but she added that it’s only a short-term solution.
“I am deeply concerned about the state-aid funding issues that are not being discussed because of the pandemic, like the governor’s proposal to eliminate expense-based aid categories,” Carbon said. “The state-level changes being proposed will exacerbate the current financial challenges facing school districts. More importantly, if passed, they will have long-term, multi-year effects, with numerous unintended consequences.”
Too early to hit the panic button in Kingston
Kingston Superintendent Paul Padalino last week said that it was too soon to be overly concerned about the governor’s budget address, adding that Kingston school officials would proceed with its own budget preparation for the 2021-22 school year as usual by considering numerous scenarios. Padalino pointed out that Cuomo’s mid-year evaluations during the 2020-21 school year have yet to see cuts as originally imagined.
“In some ways, maybe they’ve been over-preparing us, because a lot of the things they said were going to happen aren’t happening, like mid-year cuts this year,” Padalino said. “And that was a scary prospect, which now they’re saying is not going to happen. And they’re even restoring some of the hold backs that they took from last summer, which was nice for us because that was over $1 million. I think that we kind of knew that there was a possibility that we were going to take a hit, but most of us felt like we were going to take it much worse than we are.”
Padalino added that the district wasn’t exactly celebrating either. But even in non-pandemic years, the state budget is a protracted process that often sees school districts make aid gains between the initial proposal and the final plan.
“I think if the budget stays with his proposal that we have now, it’s not going to be great by any means,” Padalino said. “There’s going to be some pain, but it’s not that $15 million drop we felt we were going to have in our aid. But (Cuomo) is doing what he does. It’s kind of like when you’re in high school and you go home and tell your parents how terrible you did on a test, but you really just were preparing them so when you got an 80, they were pleased. That’s what this is like.”
Padalino stressed that with local school budget votes usually coming in mid-May, late January isn’t too early to pay close attention, but it may be too early to hit the panic button.
“I try not to be Chicken Little this early, but we’re analyzing,” he said. “But we’re going through all of it so we know exactly where we are and can inform our (school) board properly. And I think it’s going to be a painful budget process and I don’t expect to see any windfalls. And so we’re going to have to make some hard decisions.”
Padalino said there was some optimism about new President Joe Biden from a policy perspective, but more reserved optimism about what extra federal aid might mean for schools because there are so many districts in need that “they’re all going to be fighting amongst each other to get a piece of whatever they can give out to schools.”
“From a policy standpoint, we’re really looking forward to a new administration,” Padalino said. “From a financial standpoint, we’re cautiously optimistic.”
Hopeful in Saugerties
Saugerties Superintendent Kirk Reinhardt is hopeful that the Saugerties School District will be able to avoid any cuts in extracurricular programming this year and keep its staff together. The district underwent a small round of layoffs last fall among its teaching assistants and monitors, but has so far managed to avoid any big cuts in the wake of the pandemic.
“The last thing you ever want cut are programming, because they’re your enrichment, they’re the things that make public education wonderful,” Reinhardt said. “The fact that any student has a chance to be exposed to Shakespeare, or any student can be in a drama club or any student has the opportunity to play a sport, that’s what makes public school so wonderful and you hate to think that those things could come off the table.”
Reinhardt said he is waiting to see whether the federal government will provide extra aid, citing a speech by Cuomo who said he’d had conversations with Senator Chuck Schumer among others in the hopes of getting some help. What any of that may mean, Reinhardt said, it’s too early to tell.
“I want to see how this is going to unfold and how the money is going to come in, and how it will be allocated,” he said. “Is it going to be money that’s going to supplement or is it going to be money that’s going to supplant what we already have.”