What’s up with New York State School Finance?

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Full Report

Press Release

Slide Deck

Executive Summary

In this brief, I draw the following conclusions regarding New York’s Foundation Aid formula:

  • Conclusion 1: The current iteration of the Foundation Aid formula does not rationally determine what districts need to spend, or what they actually spend, in order to achieve adequate outcomes;
  • Conclusion 2: The foundation formula has continued to drift further, over time, from funding even its own (inadequate) hypothetical sound basic funding level;
  • Conclusion 3: Standards, goals and context of the education system have changed, with both broader and higher expectations and greater needs and cost pressures across the state.

These conclusions are supported by a series of calculations using publicly available data, showing that the foundation aid formula was built on measures and calculations that could never fully fund districts’ spending needs to meet desired outcome standards, even at the time of adoption. Failure to update the Foundation Aid base with respect to changes in instructional spending for successful, efficient school districts has led to increasing gaps between formula calculations and actual instructional spending needs.

The Foundation Aid formula requires both short term fixes and a longer term overhaul, driven by cost analyses to determine the spending levels needed to achieve today’s outcome standards, for all children across all districts and settings.

Short term fixes derived from the analyses herein include:

  1. Increasing base aid to better reflect general instructional expenditures of successful, efficient districts. The minimum increase justified herein would be 10.75% above next year’s inflation adjusted base. Were that to have been implemented for fy2026, the base would be $9,162 (10.75% above the adopted base of $8,273).
  2. Noting that adjustments for student needs were never based on any empirical analyses, and drawing on related work,[i] I would suggest adding and increasing adjustments for student needs, including adjustments for children from homeless, foster care and migrant families, and increasing weighting for English learners, with each weight being adopted or moved toward 1.0 additional funding. 

In the longer term, over the next year and a half, with intent to reform Foundation Aid for fy2028, the state should conduct a rigorous analysis of the spending required to achieve current desired outcome goals for all children. That analysis must identify a comprehensive spending measure – not merely general instructional spending – with appropriate adjustments for student needs and regional cost variations. Both the base and each adjustment should be grounded in rigorous empirical analysis, which was never done previously. Only by conducting such analysis to inform the calibration of a modern school aid formula can the state be confident that the formula meets the needs of all students, here and now.

Additional Resources

Folder with All AIR Report Briefs

Foundation Brief_8-18-2025Download
Foundation Brief_8-18-2025_PressReleaseDownload
NYSCS.Oct_2025Download

[i] https://cee.tc.columbia.edu/media/centers-amp-labs/cee/publication-pdfs/AIR-Report-2–Student-Outcomes-and-Student-Need—Final-10-29-24-1-1.pdf

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Published by schoolfinance101

Bruce Baker is an Professor in the Graduate School of Education at Rutgers, The State University of New Jersey. From 1997 to 2008 he was a professor at the University of Kansas in Lawrence, KS. He is lead author with Preston Green (Penn State University) and Craig Richards (Teachers College, Columbia University) of Financing Education Systems, a graduate level textbook on school finance policy published by Merrill/Prentice-Hall. Professor Baker has written a multitude of peer reviewed research articles on state school finance policy, teacher labor markets, school leadership labor markets and higher education finance and policy. His recent work has focused on measuring cost variations associated with schooling contexts and student population characteristics, including ways to better design state school finance policies and local district allocation formulas (including Weighted Student Funding) for better meeting the needs of students. Baker, along with Preston Green of Penn State University are co-authors of the chapter on Conceptions of Equity in the recently released Handbook of Research Education Finance and Policy, and co-authors of the chapter on the Politics of Education Finance in the Handbook of Education Politics and Policy and co-authors of the chapter on School Finance in the Handbook of Education Policy of the American Educational Research Association. Professor Baker has also consulted for state legislatures, boards of education and other organizations on education policy and school finance issues and has testified in state school finance litigation in Kansas, Missouri and Arizona. He is a member of the Think Tank Review Panel, a group of academic researchers who conduct technical reviews of publicly released think tank reports on education policy issues.

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