Dangerous waters ahead for school funding

In past years budgets adopted in the spring have enabled local public schools to chart a safe course for the coming year.

Not this year. There are dangerous waters ahead.

The pandemic has hammered state revenues, raising fears among local educators as they confront the challenge of reopening their schools that they will not receive a substantial amount of the aid they have been promised. State aid comprises 28 percent of Chester’s budget and 24 percent of Goshen’s.

“Since May, New York State has been warning school districts and other public entities that state aid reductions would be required if relief was not provided by the federal government,” said Chester Superintendent Denis Petrilak. “Although New York State agreed not to withhold September aid payments, it did not provide any information about subsequent state aid reductions.”

What happens in Washington over the next few weeks will reverberate in Orange County classrooms.

‘Pandemic adjustment’

The Associated Press reports that Gov. Andrew Cuomo has threatened a 20 percent permanent across-the-board cut in aid to schools, hospitals and local governments if Congress doesn’t enact more aid to replace the state’s lost revenue. A new provision in the state budget gives the governor the power to withhold aid to localities, including schools, subject to legislative review.

“The state cannot fully fund school aid for the entire school year without federal aid,” Robert Mujica, the state’s budget director, wrote in a Sept. 16 Albany Times-Union column.

The state budget passed in April appropriated the same amount of “Foundation Aid,” the main source of assistance to schools, in 2020-2021 as last year.

Other aid categories include aid for pre-kindergarten, special education placements, school construction and transportation.

The state imposed on all school districts an aid reduction styled as a “pandemic adjustment.” It was $109,508 in Chester and $298,535 in in Goshen.

This year, the cuts were totally offset by federal aid, but the maneuver deprived the districts of the opportunity to use those federal CARE Act resources to help cover the cost of educating students remotely. And future aid is uncertain.

All told, Chester applied $8,550,484 toward its $29,613,452 budget.

Goshen used $18,138,572 in its $76,083,837 spending plan.

With Foundation Aid held steady, the state still projected an 8.28 percent increase in total aid for Chester and 8.09 percent for Goshen.

A few districts held back some of their anticipated state aid to provide a cushion for future cuts, but both Chester and Goshen used virtually all the aid they had been allotted by Albany in their budgets.

For Chester, a 20 percent cut in state aid would translate into a $1.7 million budget reduction, Petrilak said. The district has developed several contingency plans for different levels of state aid cuts.

Caught in a ‘fluid’ financial situation

Before Goshen voters adopted its budget, officials warned that it might not be the last word: “The enacted state budget provides for three time periods during the state’s fiscal year when the State Division of Budget will evaluate revenues against projections and potentially withhold or adjust aid to localities, including school districts,” the district said in May. “This possibility for mid-year aid cuts means that schools may receive even less state funding than it appears at this time.”

Superintendent Daniel Connor noted in a recent statement that the state has promised districts they will receive all the aid due in September. “The district will continue to closely monitor this fluid situation so that we are prepared to identify and execute cost savings in case we don’t receive our full aid payment this winter,” he said.

Most Goshen employees agreed to a pay freeze to help hold down budget costs. But they could be vulnerable to future cuts as their salaries and benefits represent three fourths of district spending.

School districts were alarmed when the state announced plans to withhold some of their aid in July and August.

The action didn’t affect Foundation Aid, but that program could be on the chopping block if a bailout is not approved in Washington.

‘Last resort’

Mujica insisted in his column that “New York hasn’t made any cut to school aid. School aid reductions are a last resort. Instead, we’re calibrating spending against revenue declines.... Since June, we’ve temporarily withheld approximately 1 percent of the $26.4 billion the state sends to school districts, or about $300 million of the $75 billion in total school spending. By the end of this month, the state will have paid school districts nearly $11.5 billion.”

Still, some school districts, Pine Bush and Newburgh among them, announced plans for mass layoffs. Some districts have been influenced by their greater dependence on state aid and the particular needs of low-income students. Districts also have argued that they must act quickly to minimize future disruptions.

The state’s decision to pat September aid in full has eased the pressure on schools without providing much clarity about what the future holds. The July and August payments have not yet been released.

Newburgh has been able to stave off layoffs for the time being.

“Some school districts are acting prematurely as they undertake mass layoffs,” Mujica wrote. The state hasn’t withheld 20 percent of school aid. We all need to work together to fight for the federal assistance we deserve. New Yorkers gave $116 billion more to the federal government than we got back over the past five years, and now is the time when we need them to act to protect our children.”