CBC’s new analysis finds that State school aid has annually increased 6.7 percent over the past three years, in conjunction with a $11.4 billion major federal-funding infusion of temporary COVID aid. Together, they add to State per-student spending that is already the highest in the nation. State school aid has been a major driver of New York State’s spending, which ballooned to nearly 8 percent annually over the period.

While Governor Hochul smartly looked to slow school-spending growth in her proposed Fiscal Year 2025 Executive Budget, primarily through the elimination of the hold harmless provision and a modification of the Foundation Aid inflation factor, yesterday’s one-house proposals rejected those measures.

CBC’s analysis of school aid data from the Fiscal Year 2025 Executive Budget also finds that:

• Total State school aid would increase 1.9%—and 3.2% per student—in school year 2024-25;
• Proposed changes to Foundation Aid, which makes up 60 percent of State school aid, still allow a 2.1% (or $507 million) increase in Foundation Aid in school year 2024-25;
• Higher wealth districts are more likely to receive year-over-year reductions in Foundation Aid under the proposed changes;
• Total school district revenue in school year 2024-25, excluding COVID-related federal aid, would reach $35,975 per student, a 5.6% increase; and
• Even after the proposed savings, the State would send $2.4 billion to 145 districts that already self-fund a sound basic education with local revenue and regular federal aid before receiving any State aid.

CBC wholeheartedly supports the proposed phaseout of the hold harmless provision, which has prevented any annual decrease in a district’s Foundation Aid, even, for example, when enrollment declined.

The proposed inflation-factor change is a blunter instrument, which effectively helps bring Foundation Aid spending growth to a more sustainable level in the next school year but across all districts, without better targeting need. The Legislature should reconsider its position on these measures and consider other reforms—such as modifying some expense-based aid categories which currently do not incorporate need or eliminating the School Tax Relief (STAR) program—that would better target savings and moderate the growth in school spending as needed. These spending decisions will have a major impact on New York’s long-term fiscal stability.