Report

Introduction

New York State provides aid to local schools through a confusing maze of aid programs that are, according to many commentators, unfair to the neediest school districts, often defined as those with many students who are poor or otherwise "at risk." For example, New York City, which, by any measure, is one of the neediest districts, currently receives less aid per pupil than the average district in the state. On January 9, 2001, in the case of Campaign for Fiscal Equity vs. State of New York (719 N.Y.S2d 475, 150 Ed. Law Rep. 834), the New York State Supreme Court brought new salience to this issue. In a strongly worded opinion, Justice Leland DeGrasse ruled that the current educational aid system violates the state's constitutional requirement to provide a "sound basic education" and needs to be reformed. Among other things, Justice DeGrasse labeled the failure to account for the needs of at-risk students "one of the great failings of the State school financing system" and declared that "New York City does not receive State aid commensurate with the needs of its students."

This report proposes a new formula for distributing educational aid in New York State, a formula designed to direct aid to the districts that, through no fault of their own, are in the greatest need of assistance. High-need districts are those with high educational costs or low property wealth. This report begins by explaining why the cost of education varies from one school district to the next. It then shows how variation in the cost of education across districts can be incorporated into a state education aid program that brings all districts up to some minimally adequate performance level. This approach is applied to New York State. Specifically, the author proposes a new education aid formula for New York State that would bring all the school districts up to an adequate performance defined with reference to the new Regents graduation standards. This report also explores various ways to share the cost of this program between school districts and the state.