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Campaign for Fiscal Equity

Tue, Jun 30, 2009

CityUsed Dollars for HIigh Need Students to Fill City Aid Shortfall

Campaign for Fiscal Equity Analysis Shows Supplanting of Almost $250 Million in Contract for Excellence Funds during 08/09 School Year

New York— A new report from the Campaign for Fiscal Equity (CFE) shows that the city allocated state money intended to help high-need students to fill a shortfall in city aid.

CFE’s analysis of the allocations of the NYC Department of Education’s approved 2008-09 Contract for Excellence state funds— provided to resolve the Campaign for Fiscal Equity litigation— shows that the DOE used $243 million of the $388 million in Contract funds allocated last year to fill the gap created by the underfunding of the DOE’s Fair Student Funding initiative, which should have been paid by the city’s tax levy dollars.

“Filling funding holes with Contract dollars deprives schools of dollars they are owed on top of their city tax levy full funding. This critical funding is meant to support the city’s neediest students, help schools improve student performance, and deliver the education these students deserve— and to which they are legally entitled,” said Geri Palast, Executive Director of CFE.

“Now is not the time to turn our back on schools, as they start to make real progress. We’re disappointed that the city still decided to turn away from its commitment to providing extra support to schools that need it most and that the State Education Department has not ordered compliance,” added Palast. CFE flagged this supplanting back in August, during public comment on the proposed allocation.

Contract for Excellence dollars are meant to go to high needs schools to fund new or expanded school improvement programs in six explicit categories. Since 2007, high needs school districts have received supplemental Contract for Excellence state funding, part of the agreement after CFE’s decade long lawsuit to deliver more equitable and adequate resources to districts across the state.

At least 75 percent of the annual contract amount must go to benefit students having the greatest educational needs who are enrolled in the top 50 percent of schools ranked in order of greatest to least need. Although 75% of the supplanted $243 million 08/09 Contract dollars went to high needs schools, in order to do so, the City gave 86% of the $120 million City tax levy dollar restoration to low-need schools.

In another example, the City used $30 million in Contract dollars to continue funding for summer school programs (Continuation of Effort) at high needs schools, while the same programs at low needs schools were maintained with City dollars.

“This supplanting doubly penalizes the high needs schools receiving Contract dollars in lieu of City funding because staff hired with Contract dollars must have their fringe benefits paid by Contract dollars, while other schools receiving tax levy funds can have their fringe benefits paid for by the city,” Palast said.

New York City’s allocations were approved by the Commissioner of the State Education Department in January 2009. Last June, CFE’s analysis of the city’s proposed 2007-08 Contract showed that the city had allocated more than 25% of Contract dollars to low-need schools. CFE’s analysis of the approved Contract shows that the approved City Contract met that legal benchmark.

In addition to providing a comparison of the proposed and approved allocations, CFE’s report also details the approved allocations by program area and need quartile. State education law requires that Contract districts support and maintain in succeeding years the programs approved for the base year (2007-08) or use the funds to support new and expanded allowable programs. For 2008-09 New York City is thus accountable for the expenditure of a total of $645 million Contract dollars, including the $258 million the City received in 2007-08. New York City has not yet provided the required reports on actual 2007-08 school-level Contract expenditures.

CFE has been analyzing and publishing reports on the city’s proposed and approved Contract for Excellence allocations since the first proposed Contract was issued in July 2007 for the 07/08 school year. The report CFE issued today is the fourth in the series. All of CFE’s Contract for Excellence reports can be accessed under “Publications” on the CFE website

Parents from across the state march on the Capitol in Albany to show support for CFE.
CFE Litigation CFE v. State of New York
In 2006, after 13 years in the Courts, the New York State Court of Appeals affirmed the right of every public school student in New York to the opportunity for a sound basic education and the state’s responsibility to adequately fund this right, but deferred to the Governor and the Legislature to determine the appropriate amount. more >