Education Budget and Reform Act of 2007
LegislationSummary.pdf Resumen en ESPAŅOL (pdf)
April 1, 2007, the New York legislature voted to enact the Education
Budget and Reform Act of 2007 (Education Act), allocating an unprecedented increase of
$1.76 billion in education aid for FY2007-08, bringing total funding to
$19.64 billion. The law also established new transparency and accountability
measures in the distribution of funds and school finance reform.
The 2007state budget legislation included a historic increase in school funding, particularly
to high need school districts across the state. The state
increased aid to local school districts by $1.76 billion, an unprecedented
amount. More importantly, the Education Act included a four-year
commitment that by the 2010-11 school year, annual state school aid will
increase by $7 billion.
The largest part of
this increase was in foundation aid, the single classroom operating aid
category that replaces over thirty different categories of school aid.
The foundation aid is the type of operating aid that was the focus of
the CFE lawsuit and was at the core of the many years of advocacy by the
Campaign for Fiscal Equity and its partnering organization, the Alliance for Quality Education (AQE). The
adopted 2007-08 budget included $1.1 billion in new foundation aid for that same year.
By law, the amount phases up to an increase of $5.5 billion annually
New York City Funding
New York City received a total of $710 million in new state school aid
in 2007-08, of which $469 million was new foundation aid. By 2010-11 New
York City will receive $3.2 billion in total state aid increases; $2.35
billion classified as foundation aid. Under this state budget, New
York City is required to increase its local contribution to school funding
by $2.2 billion by 2010-11. The combined state/city total of $5.4 billion
closely approximates the $4.7 to $5.6 billion range ordered by the lower
courts in the CFE decisions and greatly exceeds the $1.93 billion ordered
by the Court of Appeals in the final CFE decision.
Fair Funding Formula
A central demand of CFE and AQE was the creation of a fair, simple,
transparent school funding formula. The Court of Appeals found in the
CFE lawsuit that the legislature arrived at a distribution of aid based upon a political agreement commonly referred to as "shares." Under the "shares" system, the legislature agreed that New York City would receive 38.86% of increases in school aid and 12.96% would go to Long Island. By relying on geographic politics, rather than student need, "shares" is central to the unfair distribution of school aid that underlies the historic inequities in the quality of education.
The state's new foundation formula is similar to the foundation formula proposed by CFE in the Schools for New York's Future Act. The foundation formula simplifies school funding by collapsing over 30 separate aid formulas into a single formula. The foundation formula provides transparency by providing a clear predictable distribution of school aid. The foundation formula is fair because it prioritizes funding distribution based upon student need. Seventy-two percent of new foundation funding will go to high-needs districts and 42.6% will go to New York City.
Final 2007-2008 Budget Deal
Did Not Make Full Use of Foundation Formula
The final budget deal added $120 million in operating aid outside the
foundation formula. AQE and CFE opposed the addition of this funding outside
the formula. This funding, primarily for wealthier school districts on
Long Island, could be viewed as the political price for securing the foundation
formula. If these funding streams are not repeated in future years, it
will prove to be a worthwhile trade off. If, however, similar funding
outside the foundation formula were to be repeated in future years, it
would have the impact of undermining the transparency and fairness of
the foundation formula. Such funding on an ongoing basis would be fiscally
unaffordable, and would result in taking money away from needy school
districts. It is critically important that beginning in 2008 the foundation
formula be used as the sole vehicle for distributing classroom operating
A Promise Finally Fulfilled
In 1997 New York State's legislature made the promise of phasing-in universal
Pre-K, but the promise was never fully funded. In the years since, the
State Assembly consistently sought more Pre-K funding, but never succeeded
in getting full funding in the budget. This year's budget provides $146
million in new funding for Pre-K. Governor Spitzer has promised a four-year
commitment to phase-in $437 million in total new aid annually by 2010-11
in order to make half-day Pre-K available to every child in New York State.
Pre-k funding is distributed through its own needs-based foundation formula
similar to the school aid foundation formula criteria. Expansion of half-day
Pre-K to full-day is one of the allowed uses of the funding under the
Contract for Excellence.
Accountability: How Will
School Districts Spend the Funds?
What Will Be the Result?
Contracts for Excellence
Contracts for Excellence provide the fundamental accountability mechanism
under the Education Act. The Education Act required 56 school districts
in 2007-08 (and more anticipated in future years) to target new foundation aid to a menu
of five priorities: smaller class size, teacher and principal quality,
full-day pre-kindergarten, time on task (after school, extended day, extended
year, etc.) and high school/middle school restructuring. In addition,
up to 15% of new foundation funds can be used for research-based experimental
programs. The law requires public participation in formulating local contracts,
including public hearings and a parent grievance process. Programs must
predominately serve students with the greatest educational needs, including
students from poor households, English language learners (ELL) and special
education students. Contracts must provide school-by-school reporting
on the use of funds.
Many provisions of the Contract directly resulted from AQE and CFE's community-based advocacy, including the menu of programs, the public participation provisions and the targeting to the neediest students. These provisions provide important tools parents, students and communities can use in organizing for high quality education in local schools and districts.
In New York City,
each of the 32 Community School Districts must also develop a Contract
for Excellence as part of the citywide Contract; these Contracts are subject
to full public review at the local Community Education Council.
New York City Class Size Reduction
The Contract for Excellence requires New York City to reduce average class
sizes within five years to levels determined by the Commissioner. New
York City must develop a class size reduction plan for three grade ranges:
1) Pre-K to third; 2) fourth to eighth; and 3) high school. This plan
must prioritize low performing and overcrowded schools.
Provisions a provision that may require low performing districts to redirect
existing funds to the same menu of programs targeted by the Contracts
provisions for stronger intervention by the State Education Department
in low performing districts and schools;
The legislation includes other important accountability reforms that have
not been as publicized as the Contracts for Excellence. Including:
districts are required to develop plans on how funding will serve
ELL students, and the Commissioner must report to the Governor and the
Legislature on how schools served these students;
the Board of Regents is required to design new measures for school
success that look at year-to-year growth of individual students and broaden
key measures to include factors such as high school graduation, college
enrollment and graduation rates as well as test scores;
districts are required to provide clear information to parents
through school leadership report cards, plain language student progress
reports that track year-to-year progress on state tests and a straightforward
written explanation about these tests.
Putting Teeth into
Accountability: Advocacy with Board of Regents, the Commissioner of Education
The long-range impacts of the accountability provisions will largely depend
on how assertive the Board of Regents, the state Commissioner of Education
and the New York State Education Department (NYSED) are in their oversight
roles. The Regents, the Commissioner and NYSED are in the process of writing
regulations and implementation documents that will govern the implementation
of the accountability reforms.
It is critical the
regulations and other governing documents provide clear and enforceable
means to ensure:
- that funding is targeted to the neediest students and schools within
- that the five educational strategies laid out in the law are in fact
where the foundation funding needs to be spent;
- that the Contracts for Excellence include clear, publicly available
information on how much funds are going to which schools for what programs;
- that participation of parents and the public is meaningful and the
rights of parents and the public to affect district educational policies
are clearly spelled out;
- for New York City that the regulations regarding the class size reduction
plan are clear in how they will mandate the reduction of class sizes;
AQE and CFE continure their push for the state to play an assertive role in the oversight
of districts, including the review of the proposed Contracts for Excellence.
Statewide advocacy with NYSED, the Commissioner and the Regents will be
critical to our local efforts to impact the Contracts for Excellence,
and other decisions by local school districts regarding how to invest
education funds. Every local Contract for Excellence must be approved
by the Commissioner based upon whether the Contract meets the legislative
requirements. CFE and AQE will utilize our statewide presence combined
with local organizing to influence the actions of the Commissioner regarding
local Contracts for Excellence.
In addition, the Regents,
the Commissioner and NYSED will establish regulations and other governing
documents regarding those accountability provisions of the law that extend
beyond the Contracts for Excellence. CFE and AQE will coordinate policy
advocacy and community organizing here as well.
A local school district's Contract for Excellence, including the thirty-two
Community School Districts in New York City, must spell out how funds
will be devoted to specific programs designed to fulfill the purposes
of the menu of allowable programs: class size reduction, teacher and principal
quality, full-day Pre-K, time on task and high school/middle school restructuring.
Contracts must certify that programs predominately serve the highest need
students, including students from poor households, ELL students and students
with disabilities. School districts have to show the expenditure by program
per student and on a school-by-school basis.
In preparing Contracts
for 2007-08, school districts were required to solicit written comments from the public
which the Commissioner must review before approving the local Contract.
For Education Act's remaining three years, the public participation role greatly increases. Districts
are required to work with the public in developing their Contracts. Districts
must hold a public hearing for each Contract - the New York City Department
of Education must hold a hearing in each borough and each Community School
District Contract must be fully discussed at a meeting of the Community
Education Council for review and public comment. Public comments must
be submitted to the Commissioner of Education and he must review them
in determining whether or not to approve a Contract for Excellence. These
public participation tools, combined with local organizing by AQE, CFE
and other parent and community organizations, provide effective means
to make the Contracts a viable tool to hold school districts accountable.
In addition, CFE and AQE won grievance rights for parents regarding the
implementation of the Contracts. Parents can file grievances with their
local school principal that can be appealed to the local superintendent
of schools and the school board. In New York City, appeals are directed
to the community superintendent and the New York City chancellor. In all
districts, parents can appeal the decision of the school board or the
chancellor to the state Commissioner of Education.
AQE and CFE
work with parents and organizations in communities throughout the state
to articulate parent and community-based demands on local education reform
and to organize to get school districts to include these community-supported
educational strategies in their Contracts for Excellence. This organizing
includes working with school districts as they put together their
plans and making the case for the strategies we are advocating. It also includes using all our advocacy tools to get districts to incorporate
our recommended educational strategies, turning people out en masse to
public hearings and generating formal public comments, and following through
with the NYS Commissioner of Education and NYSED staff to ensure that
the parent community voice is a decisive factor in the review and approval
of proposed Contracts for Excellence.
on the 2007-2008 Enacted Education Budget Legislation...
Campaign for Fiscal Equity battled in the courts and in the communities,
then worked with the executive and legislative branches to achieve three
central goals: a multi-year, massive infusion of school funding; the creation
of a clear cut system of accountability to drive funds to key educational
strategies; and a fair and simple foundation formula to distribute school
aid based on student need not politics," said Geri Palast, CFE Executive
Director. "With Governor Spitzer's leadership, we have turned litigation
into law. The resulting foundation formula is central to ensuring that
this achievement is enduring."
Throughout the course
of the CFE litigation which was informed by an extensive public engagement
process, CFE developed principles to guide the legislative agenda. Over
months of intense negotiations with the executive and legislative staffs,
CFE, along with its partner, the Alliance for Quality Education (AQE),
held fast to these principles, effectively advocating for more funding,
for a more equitable way of distributing this funding and for a strong
system of accountability.
At CFE and AQE's insistence,
the amendments to the Education Budget and Reform Legislation provide
for public participation in the development of the Contract for Excellence
and for a complaint procedure should implementation not match the district's
But most importantly
- the enacted budget ensures that the funding formula adopted this year
will send the lion's share of the historic commitment to a fivefold growth
in classroom operating aid by 2010-11 to the highest need districts and
Schools for New York's Future Act of 2005 - a visionary school funding
plan. Click here to
read about CFE's model legislation.
2009-10 Enacted State Budget Legislation
Appropriation Bil: S53-C/A-153-C (link) (pdf)
Article VII Language and Revenue Bill: S57-B/A57-B (link) (pdf)
SFY 2009-10 Projected School Aid Runs(pdf)
2008-09 Enacted State Budget Legislation
Enacted Education BudgetBill Article VII: S.6807-C/A.9807-C
2007-08 Enacted Legislation
Education Budget and Reform Act of 2007 Article VII: S.2107-C/A.4307-C
CFE Budget Testimony
Before NYS Senate Finance Committee and Assembly Ways & Mean Committee - 01/28/09
CFE Testimony before the State Senate Finance Committee, and the
State Assembly Ways and Means Committee - 02/27/08
State Division of Budget Hearing on Education Budget Issues - 12/13/07
State Education Department (SED) Links to Contract for Excellence Infomation and School Aid
Contract for Excellence Regulations
Contracts for Excellence Mainpage
Link to Approved Contracts for Excellence
Link to 2008-09 School Aid by District
List of 2008-09 Contract for Excellence Districts & Contract Amounts
2007-08 and 2008-09 Contract for Excellence Amounts - 2yr totals (pdf.)
Link to 2007-08 School Aid by District
New York City Contract for Excellence
To view CFE factsheet, Know Your Rights Handbook, reports, analyses and testimonies on the New York City Contract for Excellence for 2007-08 and 2008-09 please go to the Public Engagement section of this website.
Executive Budget Bill including 21-day amendments
School Aid - by School District
School Aid Proposal - by Senate District
Report: How the Senate Majority School Funding Formula Shortchanges High
Loses & Who Gains Under 2007-08 Senate Majority Plan