Building aid plan could dent schools’ budgets
Cuomo proposal may be costly to wealthy suburban districts
Much of the debate over school spending this year is over how much should go to rich versus poor districts. And while Gov. Andrew Cuomo and the education lobby are far apart on how much to spend overall, they mostly agree that equity between rich and poor is important.
But a proposal to change the building aid part of the package, which reimburses schools for construction projects, could be costly to some wealthy suburban districts, including Saratoga Springs.
According to the governor’s proposal — which if approved by lawmakers would take full effect in 2020 — districts
like Saratoga Springs could lose millions of dollars in building aid over the years, based on an analysis by the Association of School Business Officials of New York.
That’s because each district’s aid is largely based on the ratio of a district’s property value compared to the state average. The state calculates those rates, but it currently uses prices that can go back as far as 1981 if it works in a district’s favor.
Under the governor’s proposal, the ratios would be based more on current values. So communities where values have risen, especially compared to the state average, would get less aid. Saratoga Springs is an example.
Saratoga’s ratio is now 70.5 percent — meaning the state covers that much of their construction costs over time. But it could drop to 39 percent under this new plan, according to association calculations.
“Calculating the Building Aid ratio is mostly about comparing a district’s property wealth to the statewide average each year, with some adjustment for enrollment,” said Andrew Van Alstyne, association deputy director for education and research.
“For Saratoga, it’s that the property wealth has increased and outpaced statewide trends,” he said.
It appears that most of the state’s districts would get some decreases in aid. But high-need districts with lower property values like Albany, Schenectady or Troy would see minimal declines of around 4 percent, according to association calculations.
Saratoga Springs voters last spring passed a $15.6 million plan for renovations as well as improvements at Gavin Park, East Side Recreation Park and West Side Recreation Park.
Under the proposed plan, that same project would see a $4 million reduction in reimbursement, said Michael Borges, association executive director.
In Columbia County, the Copake-taconic district could see its aid fall from 42 percent to 5 percent, and in the Chatham district, it could drop from 50 percent to 21 percent.
The plan would also lower from 10 percent to 5 percent the minimum amount for any district. That would mostly affect a handful of the state’s wealthiest communities such as those in Westchester or the Hamptons on Long Island.
The idea is to steer proportionately more money to school districts that need it the most, according to the governor’s office.
“This budget proposal will better align Building Aid reimbursement rates with school districts’ current fiscal capacity while also allowing more of each year’s school aid growth to be run through the more-progressive Foundation Aid formula,” Division of Budget spokesman Morris Peters said in an email.
The new system would apply to new projects going forward. Part of the rationale is that the state shouldn’t be using a formula based on a district’s relative property wealth from the 1980s, especially since reimbursements are made over 15 to 30 year periods.
The changes can also be viewed regionally.
The struggling Mohawk Valley, for instance, would lose 4 percent in building aid. The Capital Region would lose 10 percent. That means the $169.9 million in building aid in 2019-20 would fall to $153.2 million.
Long Island, though, would lose 15 percent.
Overall the governor’s budget would decrease building aid from $3.2 billion to $2.9 billion, the association said. Cuomo has proposed a roughly $1 billion overall education aid increase, while educators want $2 billion, or more.
New York currently spends $26.7 billion in state funds on schools, aside from local property taxes. Spending per student is about twice the national average.
Passing the plan could hit opposition in the Legislature, especially with the Long Island delegation.
Because a number of newly elected Democratic senators represent that region, they may work in concert to bring home more money to the schools.
New York City lawmakers may also fight it since the plan cuts their reimbursement by 10 percent too.
While agreeing that the idea may help with equity, it does nothing to slow the growth of building and renovation costs in general, noted Van Alstyne.
“What it’s not doing is helping rein in costs,” he said.
The association, for example, would like to see a re-examination of the Wicks Law, which forces school districts to hire separate contractors for general construction, plumbing, electrical work, and heating/ventilation.
That law, however, has a lot of support from by trade associations as well as construction unions.
State assistance for school building aid is often a crucial element in getting projects approved by voters and then funded.
A bump in state aid in the late 1990s, for instance, led to a spike in school capital projects, including construction of structures like bus garages that previously didn’t exist.