School Funding in New York State

A stroll through one of the nation’s least equitable school finance

systems

Bruce D. BakerRutgers University

National Perspective

Which States are Most/Least Fair in their School Funding?

Funding Fairness across the U.S.

Special update (with adjusted poverty measures)

Least Equitable StatesState 0%

Poverty 10%

Poverty 20%

Poverty 30%

Poverty Ratio State

Aid Share[1]

New Hampshire $14,801 $12,746 $10,977 $9,454 0.64 37 Nevada $11,646 $10,214 $8,958 $7,856 0.67 55 North Carolina $11,422 $10,302 $9,291 $8,379 0.73 58 Illinois $11,082 $10,348 $9,662 $9,021 0.81 34 North Dakota $10,637 $9,917 $9,245 $8,618 0.81 37 Alabama $9,698 $9,240 $8,804 $8,388 0.86 59 Texas $9,526 $9,134 $8,758 $8,397 0.88 41 New York $18,629 $17,907 $17,213 $16,546 0.89 46 Maine $12,880 $12,373 $11,886 $11,418 0.89 45 Pennsylvania $13,675 $13,226 $12,792 $12,373 0.90 37 Missouri $9,509 $9,251 $9,000 $8,756 0.92 42 Idaho $7,783 $7,591 $7,404 $7,221 0.93 68 Nebraska $10,542 $10,337 $10,136 $9,939 0.94 33 Florida $9,230 $9,036 $8,847 $8,661 0.94 39 Colorado $9,478 $9,303 $9,130 $8,961 0.95 44 Data Source: U.S. Census Bureau Fiscal Survey of Local Governments (2007-09),1 Public Elementary and Secondary School Finances & U.S. Census Bureau Small Area Income and Poverty Estimates (2007-09)2

[1] Based on 3-year average of district level data, weighted by district enrollment. National mean = 48%

1 http://www.census.gov/govs/school/ 2 http://www.census.gov/did/www/saipe/data/schools/data/index.html

New York Perspective

Formulas that Undermine Equity and Adequacy

How States Make Things Worse Adjustments to State Aid Ratio

(& Minimum Aid) Un-Equalized (or Ad Hoc) Categorical Aid

Tax Relief Provisions

Note Amount Note Amount Note Amount

Illinois1 Alternative Aid Formulas Including Flat Minimum2

Minimum = $218 per pupil + Hold Harmless Aid3

Mandatory (state formula) & Discretionary (ISBE distributed) Categorical Grants

New York4 Minimum Foundation Aid & Other Adjustments

Minimum = $500 per Aidable Pupil Unit

New York State School Tax Relief Program5 (STAR)

Pennsylvania Minimum Basic Funding Aid Ratio6

15% of Foundation Target

Special Education (Census Based)7

$400+ per ADM

North Carolina Minimum aid through personnel ratio formula

Missouri8 Hold Harmless (Transition to SB287 from SB380)

Classroom Trust Fund

$435 per ADA

Proposition C (1982)

$786 to $818 per WADA (10% of State & Local Revenue)

Texas9 Available School Fund

Approx. $250 per Pupil Minimum, $466 per Pupil in 2010-1110

NIFA Additional State Aid for Tax Reduction11 (ASATR)

Fills gap between revenue at compressed rate & target revenue

1 http://www.isbe.state.il.us/funding/pdf/gsa_overview.pdf 2 The second formula is the “Alternate” formula. Districts qualifying for this formula have available local resources per pupil of

at least 93% but less than 175% of the foundation level. The third formula is the “Flat Grant” formula. Districts qualifying for this formula have available local resources per pupil of at least 175% of the foundation level.

3 A hold harmless provision is included in Section 18-8.05(J) of the School Code. If, for any district in 2007-2008, the formula yields less than the sum of the district’s 1997-98 General State Aid and 1997-98 Hold Harmless, a separately appropriated grant will be made to hold those districts harmless to the 1997-98 levels. Districts will be eligible (subject to appropriation) to receive Hold Harmless grants in all subsequent years if the amount of General State Aid the district receives is below the 1997-98 levels described above. http://www.isbe.state.il.us/funding/html/gsa.htm

4 http://www.oms.nysed.gov/faru/PDFDocuments/Primer11-12D.pdf 5 http://www.tax.ny.gov/pit/property/star/index.htm 6 Basic Education Funding History: http://www.portal.state.pa.us/portal/server.pt?open=514&objID=509059&mode=2 7 Special Education Funding History: http://www.portal.state.pa.us/portal/server.pt?open=514&objID=509062&mode=2 8 http://www.senate.mo.gov/07info/pdf-bill/intro/SB287.pdf 9 http://www.tasbo.org/files-public/publications/TEA/School_Finance_101.pdf 10 http://www.tea.state.tx.us/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=2147499903&libID=2147499900 11 http://www.tea.state.tx.us/index2.aspx?id=2147499540

Total Adjustment Excluding NYC =

$2.47 billion

Total Adjustment Excluding NYC =

$2.47 billion

$692 Million

$991 Million

Gap = $1,100Gap = $2,300

Gap = $1,100Gap = $2,300

Severe Underfunding of 11-12 Targets

Name

Selected Foundation Aid x TAFPU

Prior Year Frozen Foundation Aid 2011-12

Aid Shortfall from Formula

Gap Elimination Adjustment

Partial Restore

Final Reduction

Real Found. 2011-12

Real Found. Gap

ALBANY $93.53 $56.69 $36.84 -$13.46 $0.97 -$12.49 $44.19 $49.34

BEACON $22.09 $16.97 $5.12 -$4.02 $0.26 -$3.76 $13.21 $8.88

JAMESTOWN $60.88 $40.66 $20.22 -$4.85 $0.38 -$4.46 $36.19 $24.68

KINGSTON $52.61 $39.16 $13.44 -$9.36 $0.56 -$8.81 $30.36 $22.25

MIDDLETOWN $84.95 $50.65 $34.30 -$8.76 $0.49 -$8.27 $42.38 $42.57MOUNT VERNON $74.05 $62.57 $11.47 -$13.92 $0.73 -$13.20 $49.38 $24.67N. TONAWANDA $31.36 $26.12 $5.25 -$6.79 $0.21 -$6.57 $19.54 $11.82

NEWBURGH $133.17 $93.95 $39.22 -$14.97 $0.92 -$14.05 $79.90 $53.27

NIAGARA FALLS $95.24 $69.84 $25.40 -$8.71 $0.58 -$8.14 $61.71 $33.54

PORT JERVIS $35.34 $24.55 $10.79 -$3.92 $0.24 -$3.68 $20.87 $14.47

POUGHKEEPSIE $61.16 $47.53 $13.64 -$5.61 $0.36 -$5.25 $42.28 $18.89

TONAWANDA $15.55 $12.36 $3.19 -$3.30 $0.10 -$3.20 $9.16 $6.39

UTICA $123.53 $71.21 $52.33 -$8.38 $1.73 -$6.65 $64.56 $58.98

NEW YORK CITY $8,604.37 $6,187.05 $2,417.32 -$891.44 $50.88 -$840.55 $5,346.50 $3,257.87

Conceptual & Empirical Basis for the Foundation Formula & Implications

for AdequacyEven if it was funded, it’s still screwed

up!

What’s wrong with the Foundation Formula?

• Generally bogus method– “Successful schools” analysis is not a real cost analysis method

average (instructional) spending of some districts ≠

operating cost per pupil of others

– Use of efficiency filter removes nearly all downstate districts • Adding back in the RCI doesn’t cover the difference

• Assumes only instructional spending is necessary– SS model counts only average instructional spending per pupil. But foundation formula never

adds back in the rest! • Uses deflated standards

– Re-analysis & adjustment of math cut scores suggests that 95% level 3 or higher would have been more appropriate (closer to what 80% should have been)

Operational Definition of “Adequacy”

…an adequate education was operationally defined as a district:

With a simple, unweighted average of 80 percent of its test takers scoring at Level 3 or above on eight examinations (Fourth Grade English Language Arts, Fourth Grade Mathematics, high school Mathematics A, Global History, U.S. History, English, Living Environment and Earth Science) in 2005-06, 2006-07 and 2007-08. Note that, given this operational definition, a district could have less than 80 percent of its test takers with a score at Level 3 on one or more of the tests and still be providing an adequate education.

518 school districts met this standard, including: 6 High Need Urban/Suburban districts, 90 High Need Rural districts, 290 Average Need districts and 132 Low Need districts. (2009 Technical Final)

http://www.oms.nysed.gov/faru/PDFDocuments/technical_2009.pdf

Adjusting Standards & Implications for Adequacy

“We see that students with Regents Math A passing scores of 65 typically do not meet the CUNY cut-score for placement into college-level Mathematics courses. Indeed, these students may have only a little better than a 50-50 chance of earning a grade of “C” or higher in CUNY’s remedial Mathematics courses.”

Everson, H.T. (2010) Memo to David Steiner: Relationship of Regents ELA and Math Scores to College Readiness Indicators. July 1, 2010

0.2

.4.6

.81

% L

evel

3 o

r 4

2010

0 .2 .4 .6 .8 1% Level 3 or 4 2009

Data Source: NYSED SRC 2010

Grade 8 MathRelationship Between 2009 & 2010 Performance

95%, 80%

80%, 55%

60%, 30%

It would have taken a 95% pass rate with previous cut scores to equal an 80% pass rate after the adjustment!

What that means is that “adequacy” should have been estimated with respect to a 95% pass rate.

Percent of Successful Districts Included when Efficiency Filter is Applied(before & after adjusting for RCI & PNI)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mhwk

Val. &

No. C

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Souther

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Wes

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New

York

Centra

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York

Capita

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trict

Finger

Lak

es

Hudson V

alle

y

Long Isla

nd/NYC

RCI Region - Low to High

% o

f D

istr

icts RCI & PNI Adj.

No Adj.

Most districts in these regions excluded when filter applied!

Statewide Average Instructional Expenditures per Pupil 2007-08*Adjusted for PNI and RCI & No Efficiency Filter

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

$12,000

RCI Region - Low to High

$$ p

er P

up

il

2008 Level 3 or 42009 Level 3 or 42008 Level 42009 Level 4

*NYSED FARU Fiscal Profiles IE2% x Total Expenditures per Pupil 2007-08

Much Higher when Lower Half not Excluded

Level 3 or 4 Level 4 Only DV = Expenditure per Pupil [1] Coef. Std. Err. P>t Coef. Std. Err. P>t Teacher Labor Cost [2] 1.511 0.124 * 1.804 0.083 * Outcome Index [3] 2.611 0.824 * 0.778 0.165 * Student Needs % Free or Reduced (2yr Avg.) 0.012 0.003 * 0.008 0.002 * % Severe Disability (2yr Avg.) 0.009 0.002 * 0.010 0.002 * Enrollment Size Enroll >250 and <500 -0.257 0.112 * -0.301 0.138 * Enroll >500 and <1000 -0.343 0.112 * -0.399 0.138 * Enroll >1,000 and <1,500 -0.386 0.112 * -0.453 0.138 * Enroll >1,500 and <2,000 -0.423 0.113 * -0.502 0.139 * Enroll >2,000 and <2,500 -0.411 0.113 * -0.481 0.139 * Enroll >2,500 and <3,000 -0.460 0.114 * -0.540 0.140 * Enroll >3,000 and <5,000 -0.474 0.114 * -0.569 0.140 * Enroll >5,000 and <7,500 -0.479 0.115 * -0.570 0.141 * Enroll >7,500 and <10,000 -0.511 0.116 * -0.611 0.141 * Enroll >10,000 and <15,000 -0.520 0.122 * -0.646 0.144 * Enroll >15,000 -0.513 0.188 * -0.672 0.165 * Indirect Efficiency Controls % Owner Occupied Housing Units (2000) -0.002 0.001 * -0.002 0.001 * Per Pupil Adjusted Gross Income 2.089 0.562 * Per Pupil Adjusted Gross Income (squared) -0.079 0.023 * Tax Share [4] -0.180 0.024 * -0.141 0.021 * Total Aid Rate [5] 0.803 0.198 * 0.305 0.127 * Year yr2003 0.014 0.011 0.032 0.009 * yr2004 0.010 0.013 0.027 0.011 * yr2005 0.010 0.016 0.021 0.012 ** yr2006 0.046 0.018 * 0.091 0.016 * yr2007 0.065 0.021 * 0.112 0.020 * Constant -31.490 6.778 * -12.160 1.038 * Centered R2 = 0.2424 Centered R2 = 0.2532 [1] Total spending without tuition, transportation, debt service and other undistributed expenses [2] Estimated teacher salary for teachers with 1 to 5 years of experience, with average experience and average share with a

graduate degree [3] Outcome index combines percentages of students scoring above threshold on state assessments in elementary (math, ELA and

social studies), middle (Math, ELA and Science) and high school (math, English, global history, US History, Geography), and cohort 4 year graduation rates

[4] Ratio of value of median residential value in each district divided by property values (with correction for STAR exemptions) [5] State Aid share (total aid rate, excluding building and transportation) Note: Teacher Wages and Outcome Index treated as endogenous. Instruments include average characteristics of other districts

sharing labor market, including population density (based on county data), enrollment, percent nonwhite students, median house values and percent limited English Proficient Students.

*p<.05, **p<.10

Legitimate Cost Model Based on 2006-07 Performance Outcomes

Estimated by William Duncombe, Syracuse U.

Total Expenditures

Instructional Expenditures

Cost of 90% Level 3 or 4 2006-07

Fully Funded Foundation

Group Total Expenditures per Pupil

Need/Cost Adjusted Expenditures per Pupil

Poverty (Census)

Bottom 30 $15,939 $13,231 25% Top 30 $30,014 $30,081 7% Bottom Group AMSTERDAM $13,799 $13,209 27% BINGHAMTON $15,365 $12,331 35% BRENTWOOD $18,608 $14,058 14% BUFFALO $18,364 $13,165 36% GLOVERSVILLE $15,946 $14,257 29% JAMESTOWN $15,463 $13,419 31% LACKAWANNA $17,803 $12,742 33% LANSINGBURGH $13,908 $12,169 22% NEW YORK CITY $20,274 $13,454 27% NIAGARA FALLS $17,119 $13,998 28% POUGHKEEPSIE $17,752 $11,400 27% ROCHESTER $18,956 $13,585 36% SCHENECTADY $15,714 $13,490 29% SYRACUSE $18,232 $13,316 35% UTICA $14,940 $10,679 38% Top Group ARDSLEY $27,087 $31,422 3% BAYPORT BLUE P $23,377 $29,184 3% BREWSTER $23,592 $27,706 5% HENDRICK HUDSON $23,826 $28,388 5% HEWLETT WOODMERE $30,501 $30,256 6% JERICHO $29,724 $28,355 4% KATONAH LEWISB $28,117 $28,477 3% LONG BEACH $29,642 $28,740 11% LYNBROOK $22,066 $28,049 4% MARLBORO $27,323 $32,489 11% MINEOLA $31,747 $34,492 5% MT PLEAS CENTRAL $24,623 $27,606 4% NANUET $24,866 $29,627 5% NORTH SHORE $29,497 $31,385 3% SAYVILLE $21,475 $27,927 3% SYOSSET $25,990 $28,362 3%

Data sources: NYSED FARU Fiscal Profiles http://www.oms.nysed.gov/faru/documents/masterfileforweb0809.xls & Cost projections estimated by William Duncombe

30 Worst Funded and Best Funded Districts in NY State

District Calculated Foundation State Aid per Pupil [a] 2011-12

Adjusted (Selected) Foundation Aid per Pupil [a] 2011-12

STAR per Pupil [b] 2008-09

Local Effort Rate [b] 2008-09

Most Advantaged ARDSLEY $0 $2,335 $2,453 16.49 BAYPORT BLUE $0 $3,705 $1,553 15.85 BREWSTER $0 $2,669 $1,543 14.89 HENDRICK HUDSON $0 $2,263 $2,429 12.14 HEWLETT WOODMERE $0 $1,745 $2,033 18.06 JERICHO $0 $500 $895 13.83 KATONAH LEWIS $0 $1,167 $1,978 14.32 LONG BEACH $0 $1,473 $1,537 13.06 LYNBROOK $0 $2,686 $1,565 15.63 MARLBORO $1,179 $4,216 $958 22.62 MINEOLA $0 $1,703 $1,646 13.46 MT PLEASANT CENTRAL $0 $2,065 $2,444 12.48 NANUET $0 $2,621 $1,116 15.02 NORTH SHORE $0 $1,285 $991 13.16 SAYVILLE $229 $3,760 $1,527 15.36 SYOSSET $0 $1,562 $1,243 13.80 Most Disadvantaged AMSTERDAM $7,228 $8,132 $1,032 15.21 BINGHAMTON $9,023 $9,496 $988 22.69 BRENTWOOD $12,012 $12,764 $453 11.01 BUFFALO $11,838 $11,852 $348 17.95 GLOVERSVILLE $8,925 $9,499 $859 18.46 JAMESTOWN $10,294 $10,408 $729 18.26 LACKAWANNA $10,709 $11,261 $517 22.27 LANSINGBURGH $8,520 $9,301 $807 15.38 NIAGARA FALLS $10,261 $10,677 $805 18.04 POUGHKEEPSIE $10,850 $10,850 $511 9.33 ROCHESTER $12,571 $12,643 $357 20.82 SCHENECTADY $10,259 $10,974 $875 20.66 SYRACUSE $11,289 $11,619 $300 20.79 UTICA $10,720 $10,798 $800 20.63

Data Sources: [a] Foundation formula simulation constructed from 2011-12 foundation aid formula district estimates (4/1/2011). Selected Foundation Aid is the calculation of what the foundation aid would be if the formula was funded at proposed 2011-12 levels. It is not the actual level of aid received in 2011-12. [b] NYSED FARU Fiscal Profiles http://www.oms.nysed.gov/faru/documents/masterfileforweb0809.xls

How STAR and Foundation Adjustments Drive Money to the Best Funded Districts

Consequences for Curriculum & Opportunities

What are the ground level effects of these funding gaps/disparities?

Cost Adjusted per Pupil Expenditures (Standardized)

Out

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es (r

elati

ve to

Mea

n)

0

0

Expected Values

Q1: Resource poor high performer

Q3: Resource rich low performer

Q2: Resource rich high performer

Q4: Resource poor low performer

-2-1

01

2S

td. O

utco

me

s

-2 0 2 4Std. Adj. Spending

Distribution of New York State Districts

Winners & LosersHigh Spending,

High OutcomeLow Spending,

Low Outcome

Total Districts 186 194

Enrollment 2000 561,229 496,438

Enrollment 2010 577,457 453,822

Instructional Spending per Pupil $15,951 $13,153

Adj. Instructional Spending per Pupil $17,410 $11,094

Census Poverty 5.9% 23.8%

Assignments per 1,000 Pupils

1999-2000 66.31 67.25

2009-2010 83.45 86.61

Relative Teacher Wage -$2,516

[1] Complete data including cost indices available for a total of 612 NY state school districts. Excludes NYC. [2] Based on regression model, where salary = f(experience, degree level, assignment, contract months, core based statistical area, spending/outcome category, year) and including only full time certified staff.

AP/College Art

AP/College Biology/LiAP/College Calculus

AP/College Chemistry

AP/College EnglishAP/College French

AP/College Music

AP/College Other MathAP/College Social Stu

AP/College Spanish

Agriculture

Art (Visual) Elective

Art Elem-MiddleArt Other

Bilingual/ESL Ed

Biology ElectiveBiology GeneralBuilding Admin&SupporBusiness Ed

Central Admin

Chair/Supervisor/Dire

Chemistry General

Chemistry OtherComputerELA MiddleElem ClassroomEnglish 11-12English 9-10

English ElectiveEnglish General/Other

Film/Theater

French General/Other

French Intro

French LowerFrench Upper

Gifted Education

Health & PEHome Economics

Humanities OtherIndustrial Arts

Interdisciplinary

Languages OtherLibrary/Media

Math Elective

Math Elem-Middle

Math Other

Math Other Alg/Geom

Math Other Upper Leve

Math Regents A

Math Remedial

Music Choral Groups

Music Choral Lessons

Music ElectivesMusic Elem-Middle

Music Instrumental GrMusic Instrumental Le

Music Other

Oth Lang General/Othe

Oth Lang Intro

Other Subject Areas

Physics General

Safety Education

Science Elem-Middle

Science HS Other

Science OtherSocial Studies ElectiSocial Studies Elem-M

Social Studies GeneraSocial studies Remedi

Spanish General/Other

Spanish Intro

Spanish Lower

Spanish Upper

Speaking/CommunicatioSpecial Education

Theater/DanceTrades

Work Studykindergarten

reading ELA support e

01

23

4D

isp

arity

Ra

tio 2

010

0 1 2 3 4Disparity Ratio 2000

Assignment Disparity 2009No Change Shift

Persistent Disparities in Select Assignments

Art (Visual) Elective

Art Elem-Middle

Bilingual/ESL Ed

Biology General

Building Admin&SupporBusiness Ed

Central Admin

Chemistry General

ELA MiddleElem ClassroomEnglish 11-12English 9-10Health & PE

Humanities Other

Industrial Arts

Library/MediaMath Elem-Middle

Math Other Alg/GeomMusic Elem-Middle

Music Instrumental GrMusic Instrumental Le

Other Subject Areas

Science Elem-Middle

Science OtherSocial Studies Electi

Social Studies Elem-M

Social Studies GeneraSpanish Intro

Spanish Lower

Spanish Upper

Speaking/Communicatio

Special EducationTrades

kindergarten

reading ELA support e

.51

1.5

2D

isp

arity

Ra

tio 2

010

0 .5 1 1.5 2Disparity Ratio 2000

Assignment Disparity 2009No Change

Persistent Disparities in Select Assignments

AP Participation in Two Disparate States

Illinois New York

Course

High Spending,

High Outcome

Low Spending,

Low Outcome

High Spending,

High Outcome

Low Spending,

Low Outcome

% in AP Classes 21.70% 14.00% 24.60% 9.00%

% in Chemistry/Physics 24.20% 11.10% 18.30% 8.90%

% in Advanced Math 15.50% 3.30% 14.90% 5.50%

In Conclusion

• NY remains one of the least equitably funded states in the nation

• NY actually squanders a great deal of state financing on making things worse rather than better

• Even if fully funded (a first step), the foundation aid formula is woefully inadequate for high need districts, based on bogus methods, bad assumptions and false measures.

• The effects of inequitable funding can be seen at the ground level in the distribution of curricular opportunities & staff to deliver them.