Money matters; without adequate resources, schools cannot educate students. The availability of resources closely correlates with opportunities and outcomes. We believe school aid distribution should be based on student and school district need. New York currently ranks 49th in the nation on equity in education spending.

The Campaign for Fiscal Equity

The Campaign for Fiscal Equity (CFE) was created by parents who filed a lawsuit against the State of New York, claiming that children were not being provided the opportunity to an adequate education. In 2006, the New York State Court of Appeals ruled in CFE’s favor, and found that New York State is violating students constitutional right to a “sound and basic education” by leaving schools without the funding necessary.  As a result of the ruling, schools were ordered to receive $5.5 billion increase in basic operating aid (also known as Foundation Aid) statewide over the course of a four year phase-in from 2007 to 2011.

What is the Foundation Aid Formula?

This formula was created in response to the CFE ruling to distribute state aid based on student need. It accounts for the ability of the school district or city to raise money from local property taxes and was intended to close the spending gap between districts and create an equitable education system for all students.

CFE Timeline:

1993 CFE files a lawsuit against the state of New York charging that it is not providing adequate funding for children to receive their constitutional right to a sound basic education.
1995 The Court of Appeals upholds CFE’s right to pursue the challenge to the constitutionality of education financing.
1995-1999 CFE prepares for trial and develops proposals for funding and educational reform through a public engagement process. The statewide process involves collaboration with other education and community groups, issuing reports, organizing conferences and community forums, and media outreach.
1999 CFE v. State of New York is tried for seven months.
2000 The Alliance for Quality Education (AQE), a state-wide coalition, is created to build public support for CFE by engaging parents, children’s advocates, schools, teachers, community activists and others.
2001 The trial court finds that the current school funding system denies students in New York City the opportunity for a sound basic education.
2002 The Appellate Division overturns the trial court’s decision, saying the state is only responsible for providing an 8th grade education, a position advanced by Governor George Pataki.
2003 The Court of Appeals, the State’s highest court, affirms the lower court’s ruling, saying that the state must provide a meaningful high school education. The court orders the state to reform its education finance system by July 30, 2004.
2004-2006 The state fails to comply with the court order. The trial court appoints a Panel of Judicial Referees who conduct hearings to make recommendations to the court on what the State must do to comply with the court order. Governor Pataki appeals the order. The Appellate Division orders the state to provide operating funding to New York City. But, Governor Pataki instead proposes a different methodology than the Panel of Judicial Referees recommended, a methodology that was accepted by the Court of Appeals.
2006 The Court of Appeals finds that Governor Pataki’s recommendation of a $1.93 billion increase for New York City was a reasonable methodology. The court orders that this amount, which was a 2004 calculation, be adjusted for inflation. It modifies the Appellate Division order to include this number as part of the range for New York City. As such the new range for New York City was set at $1.93 to $5.63 billion plus inflation, but the Court gives discretion to the executive and legislative branches to enact a specific amount.
2007 The Governor and Legislature pass the New York State Education Budget and Reform Act enacting the Foundation Aid formula, Governor Spitzer asserted, “to provide a statewide solution to the school-funding needs highlighted by the Campaign for Fiscal Equity lawsuit.” The state and the legislature settled CFE on a statewide basis by committing to provide $5.5 billion in new classroom operating aid known as Foundation Aid, over 4 years. The state made its first payment to NYS students in the 2007- 08 Enacted Budget. $1.767 billion increase With the Education Budget and Reform Act of 2007. The Foundation Aid was tied to the Contract for Excellence a program to guarantee that schools invested the funding in proven effective programs.
2008 The state provided $1.1 billion in new Foundation Aid out of an overall $1.716 billion education increase. Programs funded through the Contract for Excellence continued and were expanded. The opportunity gap began to shrink. Year 2 of the CFE phase-in allowed for programs such as converting half-day pre-K to full-day, Saturday academies, programs for English Language Learners and many more were implemented
2009 Amidst a state budget crisis, the legislature freezes new CFE funding for two years and stretches out the phase-in from four to seven years.
2010 Governor Patterson cut $1.4 billion in school aid statewide through the Gap Elimination Adjustment.
2011 Governor Cuomo cut $1.3 billion in school aid statewide thus expanding the Gap Elimination Adjustment. Governor Cuomo also added a factor in school funding formulas that would set annual school aid increases at an “inflationary” level based upon personal income growth
2012 Only $112 million of the overall $805 million state aid increase was Foundation Aid, an amount grossly insufficient to make a difference in school budgets ($400 million was put towards the Gap Elimination Adjustment). 
2013 The state increased aid to schools by $944 million, of which $517 million was in GEA and $172 million in Foundation Aid. School districts across the state were forced to make more programmatic cuts
2014 $1.1 billion increase in total state aid, but only $250 million in Foundation Aid and $602 million in GEA
2015 $1.3 billion increase in school aid. Foundation Aid was only $428 million, whereas GEA was $603 million
2016 $1.35 billion increase in overall state aid, of which $627 million was in Foundation Aid and $434 million was put toward the GEA, which zeroed it out (paying all of it back)
2017 $1 billion increase in total school aid, $700 million in new Foundation Aid.
2018 $859 million increase in total school aid, $618 million in new Foundation Aid.
 2019 $1 billion increase in total school, $618 million in new Foundation Aid
 2020 No school aid increase. Instead, the governor forced a cut of $1.1 billion called the Pandemic Adjustment. This cut was offset by the CARES funding that the federal government provided before the enacted budget was passed.
 2021 $1.4 billion in NEW Foundation Aid AND a 3 year phase-in to FULLY fund the Campaign for Fiscal Equity commitment. The Foundation Aid Full phase-in will be completed by 2023-24 school year. Restoration of the $1.1 billion Pandemic Adjustment cut.

Most content created by the Alliance for Quality Education based on analyses of state budgets.

Some timeline content sourced from “Education Finance Equity For New York City Schools: The Long Haul,” by John Casey and Apurva Mehrotra of the Center for Nonprofit Strategy and Management in the School of Public Affairs, Baruch College, January 2011.

← Back