Opinion ID: 2254540
Heading Depth: 1
Heading Rank: 10

Heading: The Paper Trail

Text: The ineffectiveness of the formulas has been documented by the Regents. While the Regents are responsible for establishing educational policy in the State, they have no equivalent power with respect to funding. That power is in the hands of the Governor and the Legislature. However, the Regents, along with the Commissioner of Education, suggest to the Legislature the amount of spending they believe is necessary to meet the educational goals they have established. Each year, the Regents and the SED submit to the Governor and the Legislature an annual report containing a great deal of information about the state of the education system, which is designed to ensure greater correlation between student outcomes and expenditures (Education Law § 215-a). In addition, the Regents and the SED regularly appoint formal committees and task forces to study educational issues. Virtually every document in the record prepared by the Regents or the SED dealing with funding has been critical of the formulas. For example, the Regents' Proposals on School Aid for 1993-1994 and 1994-1995 state that the formulas:  do not provide adequately for all students, especially the most needy  are unduly complicated, with 53 separate formulas governing the distribution of aid  inhibit local flexibility, since many kinds of aid require specific programs whether or not such programs are the best use of the money  entail no accountability for results, because districts continue to receive the money no matter what  do not deal adequately with local differences in wealth and cost  do not adequately support needed improvements in teaching and learning     lack public credibility, for all of these reasons. The preface to the 1999 annual report prepared by the Regents and the SED finds that: [W]ith few exceptions, the formulas do not consider the extra help in achieving the standards needed by children placed at risk by poverty and limited proficiency in English. Thus, because New York City's property and income wealth per pupil is close to the State average, its State aid allocation per pupil is also close to the State average. The fact that the City's percentage of students eligible for free lunches exceeds the State average by 28 percentage points (73 compared with 45 percent) does not substantially increase their State aid allocation. A 1999 Discussion Paper prepared by the SED for the Regents Subcommittee on State Aid (Moving Towards Adequacy, Recognizing High Cost Factors In the Financing of Public Education) concluded the formulas did not take into account regional cost differences in professional service costs and the number of high need pupils. The Paper made several proposals, which it noted, recognize and correct the fundamental unfairness of allocating $3,000 in State Aid per pupil to districts which are identical in fiscal capacity. One district is located in a high cost area of the State where this $3,000 has a purchasing power of only $2,250 and 80 percent of the student body live in households that fall below poverty. The second district is in a low cost area of the State where the purchasing power equivalent of this $3,000 is $3,500 per pupil and only 10 percent of its student body is poor. (At 8.) The Paper also reaffirmed the conclusion of substantial prior research that as the concentration of children in poverty increased at the school building level, achievement decreased. These negative achievement effects were not trivial but dramatic. (At 5.) As to the relationship between funding and student need, the Paper found that 93% of New York City students fell within the ENA formula, and that this percentage: was almost three times greater than the comparison percentage of other districts similar to New York City in their wealth. Since State Aid is highly equalizing with respect to wealth, but less well equalized with respect to the concentration of disadvantaged pupils, the unusually high concentration of disadvantaged pupils places it at a funding disadvantage. ( Id. ) Although the distribution of $10.4 billion in state aid was found to be highly wealth equalized when it was recalculated on a poverty-weighted pupil basis, the desired equalization of the current aid distribution diminished significantly. ( Id. ; emphasis omitted.) The same observation was made in the foreword to the Regents' Proposal on State Aid to School Districts for the School Year 2000-2001. According to its foreword: At a time when the Regents have imposed higher standards for graduation throughout the State's public schools, it is important that State aid to school districts must be better targeted on those districts with the highest costs and the farthest to go to meet the standards.    Throughout history, State Aid to education has not been distributed in a manner that both recognized student need and provided incentives for academic improvement. In addition, schools and districts were not held accountable for the results of education spending. Rather, State Aid has been distributed based primarily on the wealth of a district as measured by its real estate assessments and income of residents (the lower the value of its combined wealth, the more the aid) and its student attendance. Accordingly, State Aid has been distributed on a district's theoretical capacity to pay for education, with limited regard to educating its students to desired levels. The New York City School District has been affected by this process with its near-average wealth and high student need. The result is that the district has never enjoyed State Aid increases that reflect the costs of educating all students to levels accepted in the rest of the State. Student results have shown that many schools have great difficulty in meeting student needs. The State and the nation must face the exorbitant costs for public assistance, criminal justice and lost productivity that such education failure requires. The then-current Chancellor of the Regents, Dr. Hayden, was asked, Do you believe that you have a thorough understanding of the state aid formula system? He replied, I do not. When asked why not, he said, I think it defies scrutiny    [Q]uite frankly, I think there are very few people in the State of New York who understand the state aid formula and how it works    I believe the public is at an extreme disadvantage when it cannot follow the way in which the money moves. The same sentiment was expressed by Dr. Sobol. He testified that the complexity of the formulas made it more difficult to direct the aid where we thought it was most needed, namely, with those students who were not now enjoying the benefits of the resources needed to require the sound basic education. Under his helm, the SED was concerned with disparities in wealth and cost across the State not only because of the inequality, but because of the inadequacy, because, in some situations, it makes it impossible for local schools or school districts to provide the conditions that students need if they were to obtain the sound, basic education under the constitution. New York City was one of these school districts. The current Commissioner, Dr. Mills, testified that he did not have a deep understanding of how the formulas work, and that only very few people do. Dr. Berne, who is one of those few people, testified that the formulas are extremely complex, making it hard for most people in the State to understand and    easier for manipulation. The shares agreement negates the general factors that are shown in the formulas    that are supposedly driving resources to children in school districts. The complexity of the formulas and the decision to predetermine the amount New York City students need are the culprit for the lack of alignment between educational goals and the components of the school finance system. Defendant Governor Pataki has called the formulas incomprehensible, convoluted, and destined for the ash heap of history. [18]