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County schools face ‘devastating’ budget cuts

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By DEBORAH E. LANS

GHENT–“Crushing,” “draconian,” “devastating” and “inequitable” are among the terms that local school superintendents and others use to describe the cuts to public schools funding proposed by Governor Kathy Hochul as part of the fiscal year 2024-25 budget released on January 16.

The two main sources of funding for public schools in the state are local taxes, mainly property taxes (about 60%) and state funds (about 40%). The federal government pays a few percentage points in targeted aid programs. Of the state monies, about two-thirds comes from what is called Foundation Aid.

The amount of Foundation Aid received by a school district is determined by a complicated mathematical formula. In general, four sets of factors are determinative: the cost of educating a student, the level of student need (for example, is the area a “high poverty” district?), the cost of living in the area, and the “wealth,” or funding capacity, of the area.

According to “good government” groups like the Education Law Center, Public Policy and Education Fund of New York and Alliance for Quality Education, which together issued a report in May 2023, the formula needs to be revisited and updated. In some cases, it relies on stale statistics. For example, poverty measures are from the 2000 census. Similarly, the approach to determining the cost of a successful education has not been updated since 2012. Yet, after 2012, the state implemented new standards. As a result, the cost analysis is based on data that is disconnected from the mandates under which schools now must operate.

In addition, as Assemblymember Didi Barrett (D-106th) points out, the formula treats rural districts unfairly, and indeed critics assert that the formula is inapplicable to the spending patterns of both large urban and small rural districts.

In testimony given on February 1 to the state’s Joint Legislative Budget Committee, the Executive Director of the Rural Schools Association described the formula as “the nation’s most inequitable distribution methodology” and one which, as proposed this year, would have a “devastating” impact on rural school districts throughout the state.

Historically, the state has employed a practice, known as “hold harmless” or “save harmless,” under which no district would receive less Foundation Aid in one year than it did the year before, regardless of the Foundation Aid calculations. This approach created a general predictability to local budgeting from year-to-year, although critics argued that over time it also drove aid farther and farther apart from a district’s actual needs and costs. As a result, many advocates have suggested that – over time – the hold harmless practice be phased out.

Because of the many questions about the Foundation Aid formula, in late 2023, the State Board of Regents, which has general supervision of all educational activities within the state, requested special funding to review and propose changes to the Foundation Aid formula. Those funds have not as yet been allocated.

The governor’s budget as just proposed would precipitously end the hold harmless practice, dropping all of its protections in one year. That fact underlies the cuts that county school districts may suffer and, when coupled with historic flaws in the Foundation Aid formula that disregard rural characteristics, threatens important school programming.

School districts in the mid-Hudson region face the greatest Foundation Aid cuts in the state. The Western New York region would see the smallest reductions.

In Columbia County, all districts but Ichabod Crane will see cuts, as follows:

DISTRICT $ reduction % reduction

Chatham 904,064 16.97

Germantown 914,233 22.70

Hudson 2,928,220 16.39

New Lebanon 261,178 10.08

Taconic Hills 2,766,342 33.67

Ichabod Crane would see a 4.4% increase.

While some of the cuts may be related to declining school populations – most of the county districts have lost enrollment since 2013 – school enrollments have generally stabilized since the pandemic, if not increased. For example, in New Lebanon, according to Superintendent Andrew Kourt, although the district is slated for a 10% cut in Foundation Aid, its enrollment has increased nearly 7% since the pandemic.

Similarly, in an interview with The Columbia Paper, Taconic Hills Superintendent Lynnette Brunger noted that the district’s school enrollment has modestly increased in 2023-24 over what it had been in the prior two academic years, yet it faces a nearly 34% cut.

She explained that a rural district like hers is disadvantaged over other areas by the manner in which its “wealth” is determined – a calculation that is essentially made based on the district’s property values and area incomes.

A community that has many second home owners may have an elevated tax base. Yet, the children who attend the district’s school may not come from those wealthier families and may have the kinds of needs that are associated with poverty. By virtue of being seen as “wealthy” the district may receive less aid, even though, in the case of the Taconic Hills district, 54% of students are free or reduced price lunch (FRPL) eligible (a standard used to define economically disadvantaged groups).

The same observation was made by Chatham District Superintendent Sal DeAngelo, who describes a “disconnect between the property value measures and the needs of the actual student population.”

Superintendent DeAngelo, like the other superintendents with whom The Columbia Paper spoke, decries the abruptness of the elimination of the “hold harmless” provision. As he explains, a district simply lacks the means to revamp its operations in a single year to the degree the proposed cuts would require, for a combination of reasons. First, New York prohibits districts from accumulating large reserves (or “rainy day funds”) limiting reserves to 4% of the annual budget. Thus, even a fiscally conservative district cannot have available the monies to plug a major budget gap.

Second, New York law prohibits annual property tax increases of more than 2%, so that, even if a district sought to offset the cuts with increased taxes, the ability to do so is limited. Moreover, in many districts property tax increases are not only politically unpopular but also undesirable, as they would hurt families already struggling financially to meet needs.

Third, school expenses are largely fixed and there is little “fat” in their budgets. Roughly 70% of every operational budget consists of “human resources” – salaries and benefits. In turn, many of those expenses are fixed by multi-year union contracts. The New Lebanon collective bargaining agreement, for example, has three more years to run. Moreover items like health insurance costs are rising and yet a district is contractually bound to provide insurance and cannot increase the employee contribution.

As Superintendent DeAngelo puts it, a district cannot manage budget cuts “out of supplies like pencils and chalk,” and costs such as transportation and maintenance are already “right-sized,” so the only alternatives are to cut elective classes, diminish services and, in the worst case, eliminate teachers resulting in over-large class sizes.

Germantown Superintendent Benjamin Bragg hopes that the community will reach out to their legislators to oppose the cuts. He says that a change of this magnitude, coming with no forewarning and after the schools were just beginning to regain their footing after the pandemic, will have a major impact on programming. Facing a 17% reduction in Foundation Aid for operations, his executive team is forced to look at a range of undesirable possibilities: reduction of athletic, after-school and elective programs, elimination of stipends, reducing already scant support positions.

In a community, like most in the county, that lacks a commercial tax base, the Germantown district is loathe to seek increased taxpayer funding, as many families are already pressed. Mr. Bragg feels the county districts will be “crushed” if the proposed cuts are passed into law.

The immediate, unexpected elimination of the “hold harmless” practice – which effectively guaranteed stability in school funding from year to year, even if it did not account for inflation – is considered particularly unfortunate for rural schools. As Taconic Hills Superintendent Brunger points out, when elective courses are eliminated for reasons of cost the effect is that rural junior and senior high school students see their opportunities diminished relative to children in more affluent suburban schools. The same is true if an elementary school teacher is eliminated, which is the effect of personnel cuts in the younger grades, because the result is typically that a class size will grow from roughly 18 to 30 in the county – with larger class sizes known to be less conducive to quality education.

Thus, even though a superintendent strives to reduce the district budget in ways that “have the smallest impact on students,” as New Lebanon Superintendent Kourt puts it, student harm is inevitable.

Indeed, all four of the county’s superintendents interviewed raised concerns about the effect of the cuts on mental health and counseling services. Covid had a profound effect on students. Federal CARES Act relief funds were used by all the districts this paper interviewed for, among other things, increased mental health providers and programming to meet the greater needs. As Superintendent Brunger explains, because the county lacks robust mental health facilities, the schools became a default provider, and they tended to help entire families.

Taconic Hills, for example, was able to add four additional providers across the district between 2018 and 2023, largely with the aid of CARES Act funds. The added counseling has been of “tremendous help” to students, and the school has seen a reduction in disruptive behaviors and an increase in academic success. Those additional positions and that level of support for the district’s families will be at risk if the proposed Foundation Aid cuts become law, as the CARES Act funding has all been used.

Without question, New York has many areas of need, and any budget represents a delicate balance. But, as Superintendent Brunger says, “our children are our future;” cutting education support may be short-sighted.

A 2018 study of California’s school finance reform found that a $1,000/student funding increase for three consecutive years lead to a full grade-level improvement in math and reading across all grades. Decreased funding presumptively has the opposite effect. In Taconic Hills, for example, the proposed cuts would represent an approximately $2,500/student reduction in one year alone.

Over the next several months, as the budget is negotiated, the state’s commitment to its youth will become clearer.

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