To rethink NY’s 15-year-old school funding formula, state officials ask for $1 million study

An exterior shot of the New York State Capitol building in Albany, N.Y.
The state Board of Regents want to spend $1 million to hire researchers to study how to change the funding formula for public schools. Pictured is he New York State Capitol building in Albany. (Jiayin Ma / Getty Images)

For many educators, parents, and advocates who follow the money behind school budgets, last year was a milestone: For the first time, New York began to fully fund Foundation Aid, the formula created 15 years ago to send state money to its roughly 700 school districts.

With that battle settled, New York’s Board of Regents now has its eyes on the next challenge: updating the formula itself. As part of Monday’s annual state budget proposal, New York’s Board of Regents requested $1 million to hire researchers, who would get feedback from the schools, advocates, and funding experts on how officials should change Foundation Aid for the 2024-25 school year. Those researchers would then design potential models for an updated formula.

Foundation Aid is a progressive formula that’s structured to send more money to schools with high-need students. It went underfunded until the state agreed in 2021 to fully cover the costs that the formula called for over three years. Lawmakers are expected to finish phasing in the money for the 2023-24 school year, amounting to $4 billion in additional funding for schools, for a total of about $24 billion in Foundation Aid next fiscal year. 

In recent years, education advocates and some lawmakers have highlighted how components of the formula are severely outdated, leaving districts shortchanged for their actual needs. For example, one measure used to calculate student poverty is based on the 2000 Census, meaning that if student poverty has gone up in districts since 2000, they’re likely not receiving all the funds they are entitled to.

Department officials want researchers to provide a “factual-based perspective” on how the formula needs to change, said Sean Giambattista, director of state aid at the state education department, at the monthly Regents meeting on Monday in Albany.

“We understand the Census poverty rate that’s used is currently out of date, but there’s more core considerations that we would need some researchers to come in and look at,” Giambattista told the board. 

The Regents aren’t alone in their request. Last month, Columbia University’s Center for Educational Equity issued a report calling for the creation of a permanent commission to ensure the formula is updated and reflective of student needs today. That report noted that the state may need to explore entirely new ways to calculate student needs, such as poverty. 

“The new system must take current realities and current student needs into account, and it must be designed to respond to changing needs and costs in the future,” the report said. “It must be insulated from undue political influence, and it must respond to the experience of education stakeholders, the people most affected by inequities and inadequacies.”

Representatives for Gov. Kathy Hochul said the governor is reviewing all requests ahead of her own budget proposal next year. They did not say whether she supported this initiative.

Regents want funding for CTE and virtual programs

The Regents discussed other budget wishlist items, including a similar request they made last year to change how school districts like New York City’s are funded for career and technical education, or CTE, programs. 

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Funding for CTE programs — which provide training for students in different career pathways — is based on rates created in the 1990s, state education advocates said. 

As a result, many schools struggle to provide enough support for keeping such programs operating. 

The Regents are proposing a new formula that would reimburse districts for CTE costs instead of giving them a budget where they receive a base amount per student, which also takes into account the number of participating students and a measure of the district’s wealth. Making that change would result in more funding, officials said. The state is pushing to expand CTE offerings, hoping to make such programs accessible to all students across the state by 2030. Mayor Eric Adams and schools Chancellor David Banks have shown considerable support for such career-focused programs as well.

Separately, the state has also proposed the creation of statewide virtual high schools that would operate their own school districts. 

“Our experience with virtual technology during the pandemic has allowed us to think differently about how to serve students who are not able to attend traditional school programs,” state officials wrote in their proposal. 

The programs would be funded similarly to current school funding mechanisms, based on the needs of students enrolled in the programs on top of start-up funding. Students with disabilities in need of in-person services would also be served by their local existing school district, which would receive funding to do so. 

New York City has begun experimenting locally with such virtual programs. One new high school has experimented with mixing online learning with in-person classroom work and fieldwork in the outdoors. 

Reema Amin is a reporter covering New York City schools with a focus on state policy and English language learners. Contact Reema at

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