Relates to the computation of approved operating expenses

Title of bill

An act to amend the education law, in relation to computing approved operating expenses for school districts of

Purpose

This bill would adjust the formula used to compute approved operating expenses (AOE). When the state aid formula was revised in 2007-08, categorical grant programs such as class size reduction, magnet schools and teacher support were merged with operating aid into a new Foundation Aid formula.

While this approach has resulted in greater simplicity and equity in education financing, it has had the unintended consequence of artificially inflating the approved operating expense (AOE) in city school districts of those cities having populations in excess of one hundred twenty five thousand but less than one million. Previously, districts receiving this type of categorical aid had the option of accounting for these funds separately from their general operations account. Funds accounted for in this way were not included in the calculation of AOE. A district's AOE is used to calculate both the charter school tuition rate and the amount that the district must spend per student before triggering eligibility for high cost excess cost aid for that student. This bill would allow the Buffalo, Rochester,Syracuse and Yonkers city school districts to continue to account for those funds in the same way that they did in 2006-07, thus maintaining charter school tuition payments at a methodology consistent with previous years, and allowing these districts to receive the state aid to which they have been previously entitled.

Summary of provisions

Section 1. Paragraph t of subdivision 1 of section 3602 of the education law is amended.

Justification

At a time when state aid has been frozen, the Buffalo, Rochester, Syracuse, and Yonkers city school districts have had to reduce programs and layoff staff to balance their budgets, this inequity must be corrected. The consolidation of categorical grant programs into the Approved Operating Expense (AOE) has had a significant impact on these school districts.

Without this revision, Buffalo Public Schools will spend $472 more per charter school student or $3.1 million more on charter school tuition payments. The inflated AOE will also cause the district to lose an estimated $1 million in High Cost Excess Cost Aid next year. The per pupil difference for the Rochester City School District is $405 per pupil or an additional $650,000 in charter school tuition payments. Rochester will lose $400,000 in High Cost Excess Cost Aid. The Syracuse City School District's per pupil difference is $541 per pupil or an additional $500,000 in charter school payments. Syracuse's High Cost Excess Cost Aid is reduced by $400,000 next year. The Yonkers Public School's per pupil difference is $1,833 or approximately $500,000 more on charter school tuition payments. Yonkers is slated to lose an estimated $1.1 million in High Cost Aid next year.

Legislative history

New bill.

Fiscal implications

To be determined.

Effective date

July 1, 2009.