Schenectady City School District leaders at Wednesday’s board meeting expressed continued concern about restoring budget cuts from earlier this year, citing unanswered questions about federal aid and how much state aid will come through this year.
Some board members said they thought it was still possible the district could face a 20-percent cut to state aid this year, even though it seemed state officials walked back that threat on Tuesday.
“People feel the 20-percent reduction is off the table,” board member Cathy Lewis said during Wednesday’s board meeting. “From what I understand that is not the case, we could still end up being reduced as much as 20 percent.”
Interim Superintendent Aaron Bochniak agreed with the statement, pointing to the fact that Gov. Andrew Cuomo’s budget proposal outlined Tuesday was heavily reliant on federal aid, including some aid that has not yet been approved by Congress. He also reiterated that the district cannot spend more money than it will actually receive and that the district still did not know how much money it would get from the state this year.
“We don’t know what the withholdings moving forward will exactly be,” Bochniak said.
At the start of the school year, as Cuomo threatened aid cuts as deep as 20 percent and some early payments to districts were actually reduced by 20 percent, the Schenectady school board acted to get ahead of the potentially catastrophic blow in state aid, laying off over 400 teachers and staff members as the district looked to retrench by cutting expenses by about $28 million.
The state in recent months, though, has fully funded most school aid payments.
Education policy analysts with both the state Council of School Superintendents and the Association of School Business Officials on Wednesday said while the governor’s presentation and budget documents still left many unanswered questions about current year funding, they thought state officials had explicitly removed the threat of a 20-percent aid cut during the current school year.
State officials on Tuesday said aid payments to localities this year that had been reduced by 20 percent would be converted to 5 percent reductions by the end of March.
“We now expect as a result of the revised revenue picture, instead of 20-percent withholds, we will reduce that to 5 percent of the current year,” state Budget Director Robert Mujica said Tuesday, referring generally to reductions in state aid to local governments, including school districts.
Meanwhile, the state’s top education officials and some state lawmakers Wednesday criticized the governor’s proposal for displacing too much state aid with incoming federal support, and advocacy groups criticized Cuomo for failing to press harder for new revenue through taxes on high-income earners.
Interim state Education Commissioner Betty Rosa and Chancellor Lester Young in a joint statement Wednesday said they were “profoundly opposed” to using federal funds to offset state dollars.
“While understanding the current fiscal realities our state is facing, we cannot balance the state budget on the backs of our students by forcing school districts to use federal funding to fill the holes left in their budgets by a decrease in state aid,” the pair said in a released statement. “This one-shot [federal] funding should be used to help schools districts meet the enormous additional costs of the pandemic and to address learning loss and other adverse students impacts rather than day-to-day expenses.”
Education advocacy groups also continued to raise concerns that the governor’s heavy reliance on federal aid, including some yet-to-be-approved federal funds the governor assumes will be coming to the state, will create a “fiscal cliff” in subsequent budget years. When the federal money dries up, state officials and lawmakers will have to come up with an equal amount of state aid just to keep funding levels flat for school districts. The extraordinary measures included in the governor’s 2021-2022 proposal, as well as his long-term budget projections, suggest that the state may struggle to replace the federal dollars in future years. Bob Lowry, of the state Council of School Superintendents, said the organization sent a message to district leaders around the state cautioning that “the state’s future financial prospects are uncertain.”
The governor’s proposal assumed that the state would receive another $6 billion in federal stimulus, hopes of which were bolstered after Democrats took a slim majority in the Senate Wednesday, and relied on nearly $4 billion in federal money approved for schools in December.
The proposal reduces state education spending by over $1 billion, including reductions to STAR tax credit payments made directly to taxpayers and projected reimbursements for costs districts incurred in previous years. But the proposal uses the federal money to bolster overall support to schools, resulting in a net increase of over $2 billion in education spending.
Analysts said the massive infusion of school aid would likely stave off dramatic cuts as districts plot out their 2021-2022 school year budgets, but district leaders also will have to walk a careful line as they manage considerable uncertainty about the financial landscape over the coming years.
Already, education watchers raised the specter of the Gap Elimination Adjustment, a cut to school aid that came about after federal stimulus in the wake of the Great Recession dried up. Without the federal money bolstering the state’s finances, the state effectively reclaimed funds from districts. It took nearly five years and countless political fights to unwind the so-called GEA. Now, districts could be facing a similar fight over state funding for years to come, some fear.
“Using federal money while reducing the state’s share of education funding — rather than supplementing state funding — is reminiscent of the Gap Elimination Adjustment we fought for years to close,” New York State United Teachers President Andy Pallotta said in a statement Tuesday after the governor released his proposal. “As a state, we can’t afford to view cuts of any kinds to public schools and colleges, public health care, and other public services funded by state and local governments as a default option — especially when the billionaire class has seen its wealth grow as millions of New York families have struggled during this pandemic.”
Lowry noted the governor’s proposal could have swapped the federal money for even more state aid and said the underlying assumption the state is likely to receive another $6 billion in federal support could be viewed as a conservative one in light of Democratic control in Washington. (President Joe Biden has already outlined plans for another $1.9 trillion in stimulus.)
Lowry said he would push for districts to have flexibility to spend the federal dollars over multiple years, as is envisioned by the federal law, arguing it could help districts manage multiple years of budget uncertainty. In some cases, Lowry said, districts may spend down much of the federal support on one-time costs associated with the pandemic like PPE purchases, mitigating the risk of using one-time aid to fund ongoing expenses like staff positions.
The governor’s proposal consolidates a series of so-called “expense-based aids,” categories of funding that districts receive for previous expenses, covering areas like transportation and BOCES. The plan would provide districts a single block grant labeled “services aid,” an area the governor reduces below the levels funded last year by nearly $400 million statewide. Brian Cechnicki, executive director of the state Association of School Business Officials, said the proposed changes would cause long-term challenges for districts as transportation and other costs grow but the comparable state aid doesn’t keep up.
“When you block grant transportation aid this way, over time you are going to cut into districts’ ability to fund those things,” he said, noting districts have little ability to control transportation costs driven largely by enrollment levels and fuel costs.
Jasmine Gripper, executive director of the Alliance of Quality Education, said schools need significant funding next school year to establish intervention and support programs to address academic deficits that have emerged during the pandemic. She said schools also need the long-term certainty in funding to develop those programs, which rely on educators and other ongoing costs, arguing for maintaining state funding to provide that certainty.
The Alliance for Quality Education and other advocacy groups have pushed a series of revenue-raising bills, which include increased income and capital gains taxes as well as new financial transaction taxes, and Democratic majorities in the state Legislature have expressed more support for new taxes than Cuomo.
“There should be no reduction to schools, period. Schools have already had enough hardship,” Gripper said. “How do we expect schools to use $2 billion in a strategic way to catch students up academically, if we aren’t promising schools that level of investment in the years to come?”
Gripper said she thought that Schenectady school officials acted too aggressively in laying off so many staff at the start of the year, arguing a pressure campaign to prevent the governor from carrying out those aid cuts was ultimately successful in sparing districts.
“There is no need to make the students continue to suffer,” Gripper said Wednesday.