ECB recommended revisions of the state school aid calculation procedures

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On December 7, SAANYS coordinated with other associations included in the Educational Conference Board (ECB) to send a letter to Governor Cuomo recommending revisions of the State School Aid calculation procedures that would improve financial aid planning by school districts.

The 2011-12 state budget instituted new limitations (caps) in annual changes to School Aid and Medicaid – the two largest components of state spending. The changes, which are codified in law for upcoming budget cycles, are different for each of the two components. The Medicaid cap is based on the 10-year average change in the medical component of the Consumer Price Index; and the School Aid cap is based on the one-year, annual change in the personal income of state taxpayers. The method for calculating the School Aid cap is more volatile, with year-to-year swings as much as five percent. In fact, forecasting the change in personal income for a single year is itself, open to wide variation as data become available.  For example, the changes in the personal income forecast for 2013-14 have been revised downward several times, with concomitant reductions in the possible School Aid cap falling from $950 million to $610 million.

In its letter, ECB recommends that the method used to set the School Aid cap be revised in a manner that is similar to that used for Medicaid. The calculation of the School Aid cap should use the 10-year average of change in statewide personal income. It is expected that this revised approach will seldom go up or down by more than one-half of one percent per year. For 2013-14, such a revision would result in a School Aid cap of 4.0 percent – a possible increase of $814 million.In addition to SAANYS, the associations constituting the Education Conference Board are: Conference of Big 5 School Districts, NYS Association of School Business Officials, NYS Congress of Parents and Teachers, NYS Council of School Superintendents, NYS School Boards Association, and NYS United Teachers. The ECB letter to Governor Cuomo is posted on the SAANYS website. For more information about ECB or the letter sent to Governor Cuomo regarding State Aid, contact James Viola, Director of Government Relations at JViola@saanys.org.

 

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