Provides that school aid for prior years may be paid from funds for the general support for schools after deduction of excess payments that have been made

Title of bill

An act to amend the education law, in relation to state aid to school districts which is due for prior years

Purpose

This bill provides that school aid for prior years may be paid from funds for the general support for schools after deduction of excess payments that have been made.

Summary of provisions

Section 1: Amends paragraph c of subdivision 5 of section 3604, as added by Chapter 82 of the Laws of 1995, of the Education Law.

Section 2: Sets forth the effective date.

Justification

In an effort to ease burdens on school districts within the state, Section 31 of Chapter 57 of the Laws of 2012 made school districts that filed late final cost reports eligible for a restoration of aid, net a penalty reflecting the amount of aid that would have been paid during the years the final cost report was late. The restoration of this aid for each eligible claim is to be paid out in the order that it was approved by the Commissioner of Education. However, timetables for how and when this aid will be reimbursed has not yet been developed, but estimates of upwards of 15 years to pay schools back have been communicated by SED.

Certain school districts, subsequent to an audit by the State Education Department, may be determined to have projects from several years prior that are deemed, in part, to not be aidable, requiring the repayment of aid that had been disbursed. For many school districts, particularly those in rural and/or economically challenged areas, this represents a significant burden since they may not have reserves or tax levy capacity to meet the obligation.

Allowing these school districts to pay aid takebacks out of funds owed them by SED would provide significant relief and fiscal stability.

This bill would allow school districts to be credited for aid takebacks out of an aid reimbursement they are owed by the State, alleviating a significant, undue burden on school districts as well as local taxpayers. School Districts and taxpayers in New York State deserve certainty with their finances

Legislative history

New Bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately.