To: Avon Learning Community
From: Ryan Pacatte, Ed.D.
Date: 1.13.25
Re: Financial Update Post Rockefeller Institute Study
There is a lot of financial news circulating right now. It can be confusing. The processes and terms are complex, and they seem to always change.
This update relates to work happening at NYS related to the Rockefeller Institute of Government’s study of school aid.
Background Information
As part of the NYS budget for 2024-25, the Rockefeller Institute for Government was commissioned by NYS to make recommendations for improving NYS’s school funding formula used to establish Foundation Aid.
The Rockefeller Institute published its Foundation Aid report on 12/2/24. Many professional organizations and outlets have started to weigh in on the more than 300-page report. A summary of highlights is included below.
As you read, please know we are currently a “Save Harmless” district. This means a straight running of the current Foundation Aid Formula showed a decline in foundation funding from the 2023-24 academic year to the current 2024-25 academic year. “Save Harmless” is a provision that makes up the difference. So rather than receive less, the district was “Held Harmless” because NYS made up the difference of Foundation Aid money so the actual amount received is at least even year-to-year.
Last year, Governor Hochul’s State of the State Executive Budget proposed the elimination of “Save Harmless.” This proposal came out of nowhere between November’s initial aid runs and the proposed Executive Budget in January. Had the Legislature not intervened, Avon was projected to receive about $170k less for 2024-25 than we received in 2023-24.
The future of “Save Harmless” is not known. It is very early in the budget process, but Avon’s first running of the Foundation Aid projects that we will need approximately $550,000 in order to be “Held Harmless.” In other words, we need NYS to deliver an additional $550k to keep the NYS Foundation Aid at the current amount for the third year in a row. If “Save Harmless” goes away, then the district will be responsible for addressing the shortage.
The change in the aid reported for Avon is primarily related to enrollment decline in conjunction with improvements in Avon’s Combined Wealth Ratio (CWR). CWR is an economic indicator that looks at property wealth and reported financial earnings. In general, improvements in CWR suggest that the local community can support more for the school’s program. Because enrollment is going down and CWR is going up, NYS is trying to make the case that it should provide less and the community can support more. These are just two factors in NYS’s Foundation Aid formula.
Here is some of the professional feedback related to the Rockefeller Study. The 300-page report has only been out a short time, and we are early in the budget process. Things will evolve.
Rural Schools Association:
David Little, Executive Director of Rural Schools Association, discussed the report with Spectrum News.
Rockefeller Institute Director, Robert Menga, presented to the Rural Schools Association. He is proud of the work they did to articulate a range of potential variable adjustments. The report was laid at the feet of the Governor and Legislature. It is their responsibility to advance the work. Menga cautioned that many of the variables in the formula are dependent upon one another and interact in unpredictable ways. Their recommendations should not be cherry-picked.
New York State School Boards Association- Among other comments were these:
Rather than relying on “Save Harmless,” the NYS Legislature should update the way it calculates and distributes aid.
Currently, “337 districts rely on the guarantee of Save Harmless aid payments rather than calculations of the formula,” the report notes. The formula would provide less aid year-to-year if “Save Harmless” goes away.
NYSSBA Executive Director Robert Schneider called the report a “a good starting point for discussion.” He noted the report offers a “menu of options” for policymakers to consider.
Schneider expressed concern about the fate of Save Harmless (also called “Hold Harmless”) because it has been relied upon to provide predictability and stability.
He said changes should not result in a loss of predictability or a transfer of responsibility for core school funding from the NYS to local taxpayers.
Several items in the study were praised by NYSSBA. These include:
NYS should “fully underwrite the cost” of the mandated transition to zero emission buses.
Use rolling averages and multi-year phase-ins to improve predictability and reduce volatility.
The report notes schools today are obligated to provide more kinds of support and services than ever before such as more mental health services.
New York State United Teachers- Among other comments were these:
For too long, outdated models and inequitable funding formulas have left behind many students — especially those in high-need districts. The Rockefeller Institute’s report provides an important analytical framework for addressing these inequities and ensuring every public school student has access to the high-quality education they deserve.
Updating the outdated funding formula is a critical step forward, and we support some of the report’s recommendations. However, we remain concerned about recommendations that arbitrarily lower the Foundation Aid amount instead of considering the necessary support for our schools’ evolving student populations.
Any changes to the formula must prioritize stability and predictability for school districts.
Beyond formula adjustments, policymakers must address broader systemic challenges that impact school funding, such as youth mental health supports, child poverty across the state, and infrastructure investments. As policymakers consider these findings in the upcoming state budget, we urge them to prioritize the voices of students, parents and educators.
New York State Council of School Superintendents - Among other comments were these:
The report is impressive for both comprehensiveness and specificity.
With the wide range of topics covered by the report, our reactions are mixed. It recommends sensible steps to improve outdated measures of student poverty and regional cost differences. We welcome its recognition of the value of stability and predictability in aid formulas.
We concur with its recommendation to return to a policy of funding special education primarily through a formula outside of Foundation Aid.
We also appreciate its recommendations for state support for student mental health services and transitioning to zero-emission school buses.
We oppose recommendations to cut Foundation Aid through reductions in save-harmless funding.
This report is the first word, not the last. Next will come Governor Hochul’s budget proposal in January and then the budget to be passed by the Legislature.
Association of School Business Officials:
In the public sessions as part of the Rockefeller Study, ASBO delivered the following recommendations below to the representatives for the study.
The graph on the next page was included in ASBO’s follow up presentation.
An Avon Perspective:
The emphasis on predictability conveyed via the study is appreciated. Annual budget gymnastics are not good for anyone.
We are concerned about the interaction of the factors and nervous about what factors the Executive and Legislature will value. We do not know what they (Executive & Legislature) will do. Those responsible for the study, clearly indicate that the variables need to be looked at comprehensively. We’ll see where that goes. We will learn more about what the Executive is thinking with the 2025 State of the State scheduled for January 14th @ 1 PM.
Save Harmless could be a big deal for us. We will be impacted by how it is handled. Enrollment and CWR, the two factors that seem to be lowering our calculated aid amount, are not really within our control.
Metaphor- Comparing the Foundation Formula to the used cars I drive. When things start to go wrong with my truck, the mechanic gives me a list of potential improvements. A constant question is: “Would I be better off fixing this thing, or would I be better off in something completely different?” The same question applies to the Foundation Aid Formula: “Are we better off trying to fix the formula or should we concentrate on building something new and better?” An intensive cost study would be needed.
NYS is also currently trying to adjust school requirements based upon the Blue Ribbon Commission. Are there any cost studies related to the proposed changes? There will be significant costs related to this sort of change.
The “COVID Years” were used to calculate a baseline in the Rockefeller Institute’s Study. This is concerning as they were not normal budget years. Menga, while speaking with Rural School Association representatives, acknowledged that this dynamic was not thoroughly considered in their work. He suggested this fact be made clear in advocacy efforts.
With a lot of financial news circulating, we thought some highlights from this important study from the Rockefeller Institute may be helpful prior to the Governor’s State of the State Address.
Typically, school budget calculations are updated and sent in the days following the Executive Address. Regionally, districts are advocating for preservation of Save Harmless and a due minimum increase. At this time, it is hard to know where things will land. The field is assuming that Save Harmless will be preserved. This is good for us. Yet most also feel there will be no additional due minimum meaning Foundation Aid will be flat for the third year in a row.
As always, please contact Kristen Murphy or me if you have questions about the annual budget development.
Thank you.
Ryan P. Pacatte, Ed.D.
Avon CSD Superintendent