Explaining key budget factors for 2021-22

Q: What is the Pandemic Adjustment and how did it affect schools?

A: In an effort to deal with the financial challenges brought on by COVID-19, the current year’s state budget included a state aid reduction for all public schools. Called the “Pandemic Adjustment,” this totaled a $1.1 billion reduction in overall school aid statewide. This adjustment was backfilled for each district by federal stimulus funds for the current school year.

Jordan-Elbridge’s Pandemic Adjustment for the current school year was $312,181.

Q: How is federal aid factoring into the state budget process and school aid for 2021-22?

In addition typical federal funding categories, three types of federal aid related to COVID-19 relief are factoring into the state budget:

• CARES Act Funding: This represents $1.1 billion in federal support for schools that was enacted during the spring of 2020 and provided to school districts as part of their 2020-21 school aid. The amount of CARES Act funding each district received was equal to the amount that their state aid was reduced for 2020-21 through a state-enacted “Pandemic Adjustment.” In Gov. Andrew Cuomo’s proposal for school aid for 2021-22, there is no CARES funding (as it was already used) and there is also no Pandemic Adjustment.
• The Coronavirus Response and Relief and Supplemental Appropriations Act (CRRSA): This federal relief package was passed by Congress and signed by the president in December 2020. It allocated $4.3 billion for education in New York, which the Governor is proposing to use for 2021-22 school aid. This federal funding is offsetting a reduction in state funding for education in state aid for 2021-22 in the Gov. Cuomo’s budget – and is the only reason the Governor was able to put forward a plan for school aid that contained an overall increase for 2021-22.
• Additional federal aid that Gov. Cuomo has requested: In releasing his fiscal year 2022 state budget proposal, Gov. Cuomo said it was necessary for New York to receive more federal aid in a future COVID relief package from Congress and the Biden administration. Cuomo said that he has requested $15 billion. The budget he proposed was based on New York receiving $6 billion in additional federal aid. If the state receives the full amount requested, the reduction in state support that Gov. Cuomo proposed may be restored. However, the Governor is also seeking the authority to withhold money for schools based on the status of the state budget, including if more federal assistance is not received.

Q: What is the Local District Funding Adjustment?

A: In the Governor’s executive budget proposal, state funding for school districts is diminished through a reduction called the Local District Funding Adjustment. The Local District Funding Adjustment would be a $1.35 billion reduction to “current law projected aid” for the 2021-22 school year. The state is proposing to use federal money to offset this reduction, and the budget proposal indicates that the reduction may be restored if the state receives the additional money it is asking for from the federal government.

JE’s Funding Adjustment for 2021-22 school year is $1,056,886.

Q: Are schools still facing the possibility of a mid-year reduction in their state aid?

A: For the current school year (2020-21), the Division of Budget indicated in news reports on Jan. 21, that 100% of school aid will be paid. Legislation enacted with the state budget for the current fiscal year did provide the authority for the state to withhold or reduce aid payments to localities (including schools) in response to budget trends. While the Governor had talked about the potential for a 20% state aid reduction in the middle of the current year, state officials have said this will be not occurring after all. However, the Governor’s budget for the coming fiscal year includes language that would continue to grant the Division of Budget the authority to withhold money for school districts, including based on the level of federal assistance that is received.

Q: What is Services Aid and how does it factor into the Governor’s budget proposal for schools? 

A: Gov. Cuomo is proposing to consolidate current categories of school aid into a block grant known as “Services Aid” and to eliminate future growth in these aids. The 11 categories, known as expense-based aids, provide schools with reimbursements in specific areas such as BOCES services and student transportation. Gov. Cuomo’s proposal to restructure the way this aid is distributed includes a proposed decrease of approximately $400 million compared to the current levels of aid in the 11 categories. This reduction is offset by federal aid for 2021-22 in the Governor’s budget proposal. Similar proposals have not been approved in the past, with education advocates and others arguing that expense-based aids are critical to sustaining programs that meet a wide range of student needs every day.

The 11 categories of aid that would be consolidated into Services Aid in the Governor’s proposal are: BOCES Aid; Transportation Aid, including for summer programs; Textbook Aid; Computer Software Aid; Library Materials Aid; Computer Hardware & Technology Aid; Supplemental Public Excess Cost Aid; Special Services Aid; High Tax Aid; Charter School Transitional Aid; and Academic Enhancement Aid.