Anticipating budget cuts, rural schools are eyeing the upcoming NY budget with trepidation

Although Franklin Central School has only 215 students from kindergarten through 12th grade, it is the heart of the northern Catskills community.

The three Main Street restaurants in the Village of Franklin, NY, rely on the business of students, staff and their families to stay afloat, and almost every community event – ​​from the annual senior luncheon to the farmers market – is hosted with the help of student volunteers.

“The village and the school just fit together,” said Amanda Groff, 44, who has three children enrolled in the district. “I can’t imagine one without the other.”

But the school’s future is uncertain, its superintendent, Bryan Ayres, said in an interview. A new budget plan announced earlier this year by Gov. Kathy Hochul could cut Franklin’s state aid by nearly $1.3 million — more than 12 percent of the total budget. Mr Ayres fears he will have to lay off secondary school teaching staff and send older students to schools in neighboring districts if the cuts are approved.

According to the state’s projections, about half of New York’s school districts would face a reduction in funding under the plan. Some are wealthy, suburban districts in places like Westchester County and Long Island, but many are low-income, rural districts less able to fill budget gaps with property taxes.

Leaders of rural districts from across the state said the new plan would mean many rural students would have fewer opportunities than their suburban or urban counterparts as schools are forced to cut back on staff, after-school programming, course offerings and fine arts programs. .

The cuts were included in the $233 billion spending plan that Ms. Hochul unveiled in January that would change the Foundation Aid formula, the complex method New York uses to determine how much state aid is distributed to individual school districts. The plan requires approval from the state legislature before it goes into effect.

The updated formula would change the way the state looks at the cost of living in an area. Currently, the state awards aid partly based on what it has cost to live in a particular area over the past year. Ms Hochul has proposed using the average cost of living from the past ten years, which would result in all districts receiving less aid than previously expected.

The new plan would also end a decades-old practice known as “hold harmless,” which guarantees school districts receive at least as much aid each year as they did the year before, even if enrollment declines. Ms Hochul has said the policy is illogical.

“Why are we funding a program for children who aren’t there?” she said at a press conference in February.

There are hundreds of school districts in New York state, and state officials say only a small portion are rural districts that will see significant budget cuts. Officials note that many districts, including small districts in New York City’s suburbs that serve large minority populations, for example, could benefit from the changes as more money comes their way. Many of the districts — including some in rural areas — have seen enrollment skyrocket in recent years and are considered “high needs” based on the number of students who come from low-income households, are learning English or have disabilities.

Ms. Hochul’s budget plan also includes $100 million in additional funding for school districts in the coming year. The governor and state legislative leaders will negotiate how that money will be disbursed before the Legislature votes on the proposed budget plan later this year.

A spokesman for Governor Avi Small said that statewide school aid had increased since Ms. Hochul took office, and that “her budget proposal continues these record increases, while increasing funding for districts that have experienced significant population losses over the past two decades known, will be adjusted. ”

Many of New York’s rural districts have experienced significant enrollment declines in recent years — a trend that experts say has also been seen nationally. Several district leaders said they had long expected their state aid to eventually reflect these losses.

But the severity of Ms. Hochul’s proposed cuts shocked them, they said.

Kathleen Bressler, the superintendent of the Sullivan West School District in Sullivan County, said her district could lose nearly $2 million at once, leaving her feeling physically ill, and making it nearly impossible to decide what to cut back on.

“Whatever we decide to do will reduce opportunities for children,” Ms. Bressler said, adding: “With a $2 million cut, nothing is off the table.”

Determining how education aid should be distributed is complex and has given rise to this debates in numerous states about how we can fairly fund schools in rural areas, where there are typically fewer students costs per student may be higher than in urban and suburban neighborhoods.

In rural areas, schools are often both community centers and among the largest employers, experts and district leaders say. Rural schools also often provide physical and mental health care in areas where access to those resources may be limited.

The extracurricular activities offered at the Marion Central School District, about 40 minutes outside of Rochester, are some of the only social options available to families locally, said Superintendent Ellen Lloyd.

If the state implements the updated formula, Marion Central would lose $1.2 million in state funding, Ms. Lloyd said, and would have to cut much of its non-academic programming.

“I feel like we do so much work to make sure our kids have an equal experience,” she said. “In my opinion, this will only be less fair.”

Foundation support is based on numerous factors, including the number of students enrolled in a particular district, the level of need and the general prosperity of the area. The formula also uses, in part, a district’s income tax base to estimate its ability to generate local revenue.

Rural district leaders are particularly concerned about this last piece of the formula when the “hold harmless” policy ends. Average incomes have soared in some rural communities where wealthy New Yorkers sought refuge during the pandemic. But district leaders say they can’t necessarily translate that extra wealth into more money for schools.

That is because the state’s property tax law restricts districts from raising annual tax rates by more than 2 percent or by more than inflation, whichever is lower. Districts would need a supermajority of local voters to approve raising property taxes above the tax cap, an unlikely scenario.

Several district leaders said the tax cap would prevent them from generating more than $100,000 to $300,000 to offset cuts to their budgets.

Any increase in wealth would have to be particularly extreme to significantly affect state aid, said Blake Washington, the state budget director.

They have been to Franklin, in Delaware County. In recent years, more than half of students have qualified for free or reduced-price lunch, a federal measure of poverty. But total income in the district tripled between 2020 and 2021, from $49 million to almost $150 million, Mr. Ayres said.

The cuts may seem harsh, Ms. Hochul said as she unveiled her budget, but they are critical to addressing the state’s $4.3 billion budget deficit and keeping the state’s finances healthy amid skyrocketing Medicaid enrollment and a migrant crisis. New York has significantly increased school aid in recent years at rates that were not sustainable, she said.

“As much as we would like to, we will not be able to repeat the huge increases of the past two years,” Ms Hochul said in January.

Many districts also have much more money in reserve than required by law, Ms. Hochul said. Several rural district leaders said they would draw on the reserves, but said most of those funds were allocated for specific purposes, such as workers’ compensation, capital projects or buses.

The cuts come at a difficult time, district leaders and experts say. Pandemic-era federal education aid will end this fall. Schools are trying to address pandemic learning loss as well as state initiatives, including overhauling their reading instruction.

Karen Hawley Miles, executive director of the nonprofit Education Resource Strategies, said all the financial challenges school districts have faced represent “a once-in-a-generation, multi-generational event.”

“It is very, very difficult to make this change now and at this time,” she said. She said many states have gone in the opposite direction and sent more money to schools.

Mr. Washington, the budget director, said the governor was “very aware” of the financial challenges facing school districts and rural districts in particular. The purpose of the plan was to start a conversation about how districts could be more fiscally responsible, he said, adding that Ms. Hochul was open to changes.

“We know this is a disruptive proposal. That is on purpose,” he said, adding that the budget was not set in stone. “We look forward to working with the Legislature to smooth out the rough edges.”

In Franklin, Mr. Ayres said he feared the cuts could lead to further enrollment declines and funding cuts. In the worst case, enrollment and state aid would increase until the school would eventually be forced to close.

Meg Shivers, 52, whose son attends Franklin and whose daughter graduated last year, grew up in the nearby hamlet of Treadwell and saw how it changed after the elementary school closed.

“You don’t see schoolchildren cycling on the sidewalks. You don’t hear children playing,” Ms. Shivers said. “There’s nothing left.”