Senate Bill S4560

                                 BILL NUMBER:  S4560A

 TITLE OF BILL :
An act to amend the education law, in relation to computing approved
operating expenses for school districts of


 PURPOSE :
This bill would adjust the formula used to compute approved operating
expenses (AOE). When the state aid formula was revised in 2007-08,
categorical grant programs such as class size reduction, magnet
schools and teacher support were merged with operating aid into a new
Foundation Aid formula.

While this approach has resulted in greater simplicity and equity in
education financing, it has had the unintended consequence of
artificially inflating the approved operating expense (AOE) in city
school districts of those cities having populations in excess of one
hundred twenty five thousand but less than one million.  Previously,
districts receiving this type of categorical aid had the option of
accounting for these funds separately from their general operations
account. Funds accounted for in this way were not included in the
calculation of AOE. A district's AOE is used to calculate both the
charter school tuition rate and the amount that the district must
spend per student before triggering eligibility for high cost excess
cost aid for that student. This bill would allow the Buffalo,
              

Rochester,Syracuse and Yonkers city school districts to continue to
account for those funds in the same way that they did in 2006-07, thus
maintaining charter school tuition payments at a methodology
consistent with previous years, and allowing these districts to
receive the state aid to which they have been previously entitled.

 SUMMARY OF PROVISIONS :
Section 1. Paragraph t of subdivision 1 of section 3602 of the
education law is amended.

 JUSTIFICATION :
At a time when state aid has been frozen, the Buffalo, Rochester,
Syracuse, and Yonkers city school districts have had to reduce
programs and layoff staff to balance their budgets, this inequity must
be corrected. The consolidation of categorical grant programs into the
Approved Operating Expense (AOE) has had a significant impact on these
school districts.

Without this revision, Buffalo Public Schools will spend $472 more per
charter school student or $3.1 million more on charter school tuition
payments. The inflated AOE will also cause the district to lose an
estimated $1 million in High Cost Excess Cost Aid next year. The per
pupil difference for the Rochester City School District is $405 per
pupil or an additional $650,000 in charter school tuition payments.
Rochester will lose $400,000 in High Cost Excess Cost Aid. The
Syracuse City School District's per pupil difference is $541 per pupil
or an additional $500,000 in charter school payments.  Syracuse's High
Cost Excess Cost Aid is reduced by $400,000 next year. The Yonkers
Public School's per pupil difference is $1,833 or approximately
$500,000 more on charter school tuition payments.  Yonkers is slated
to lose an estimated $1.1 million in High Cost Aid next year.

 LEGISLATIVE HISTORY :
New bill.

 FISCAL IMPLICATIONS :
To be determined.

 EFFECTIVE DATE :
July 1, 2009.