Education Budget and Reform Act of 2007

LegislationSummary.pdf       Resumen en ESPAŅOL (pdf)

On 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.

Historic Funding Increases
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 by 2010-11.

New York City Funding Increases
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 aid.

Universal Pre-Kindergarten: 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.
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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.

Other Accountability Provisions
The legislation includes other important accountability reforms that have not been as publicized as the Contracts for Excellence. Including:

  • a provision that may require low performing districts to redirect existing funds to the same menu of programs targeted by the Contracts for Excellence;
  • provisions for stronger intervention by the State Education Department in low performing districts and schools;
    •  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 and NYSED
    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:

    1. that funding is targeted to the neediest students and schools within districts;
    2. that the five educational strategies laid out in the law are in fact where the foundation funding needs to be spent;
    3. that the Contracts for Excellence include clear, publicly available information on how much funds are going to which schools for what programs;
    4. 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;
    5. 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.

    Local Organizing for Accountability
    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.


    More on the 2007-2008 Enacted Education Budget Legislation...

    "The 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 Contract.

    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.


    The 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.


    Additional 2007-08 Documents (PDF)

    2007-08 Proposed Executive Budget Bill including 21-day amendments

    2007-08 Proposed Executive Budge
    t School Aid - by School District

    2007-08 Proposed Executive Budget School Aid Proposal  -  by Senate District

    2007-08 CFE/AQE Report: How the Senate Majority School Funding Formula Shortchanges High Needs Students

    Who Loses & Who Gains Under 2007-08 Senate Majority Plan


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