ALBANY — New York education leaders and advocates are pushing Gov. Kathy Hochul to overhaul the state’s decades-old school aid formula in her budget proposal this month — a formula that currently would cut funding for hundreds of districts if not for a safety net policy.

The complex formula, known as Foundation Aid, was enacted in 2007-08 and is the single largest source of financial support for public schools in the state, sending billions of dollars to Nassau and Suffolk counties alone.

Parts of the formula are regularly updated, but others are frozen and haven’t kept up with rising costs, education leaders and advocates told Newsday. The calculation also doesn’t consider the state’s 2% cap on property taxes, which limits how much districts can raise locally.

A safety net policy, known as “hold harmless” or “save harmless,” ensures districts that otherwise would see cuts under Foundation Aid receive at least as much as they did the previous year. More and more districts are relying on the policy, due largely to declining enrollment and rising income and property wealth, which reduce the state aid districts are eligible for according to the Foundation Aid formula.

WHAT NEWSDAY FOUNDNew York education leaders and advocates are pushing Gov. Kathy Hochul to overhaul the state’s decades-old school aid formula in her budget proposal this month — a formula that currently would cut funding for hundreds of districts if not for a safety net policy.The complex formula, known as Foundation Aid, was enacted in 2007-08 and is the single largest source of financial support for public schools in the state, sending billions of dollars to Nassau and Suffolk counties alone.Parts of the formula are regularly updated, but others are frozen and haven’t kept up with rising costs, education leaders and advocates told Newsday. The calculation also doesn’t consider the state’s 2% cap on property taxes, which limits how much districts can raise locally.

This school year, more than 56%, or 378, of the state’s 673 school districts fall under “save harmless,” according to data from the Association of School Business Officials of New York.

On Long Island, 67 of the 121 school districts are on “save harmless” — 25 in Nassau County and 42 in Suffolk County, according to the data.

“The higher that number goes, the greater the risk is that you really don’t have a functioning formula,” said Robert Lowry, deputy director for the New York State Council of School Superintendents. “Fewer and fewer districts are actually on the formula and thereby dependent on getting some sort of minimum percentage increase.”

The state budget for 2025-26 guaranteed at least a 2% increase in aid for all districts and maintained the “save harmless” policy, but neither is guaranteed this year.

Education advocates and some lawmakers said the state needs to address the core calculations of the formula, including by reevaluating the cost to successfully educate a student, reworking how inflation and regional costs are measured, and factoring in districts’ actual ability to raise local revenue.

While groups have pushed for changes to the formula for years, it’s a complicated process that can create winners and losers — something lawmakers tend to avoid, particularly in an election year. Last year, the state budget made several changes to the formula, but addressing the major issues is complex, time-consuming and costly.

Hochul is slated to give her State of the State address on Tuesday, outlining her legislative agenda for 2026. Her budget proposal will be released a week later, detailing how she plans to pay for it and close an anticipated $4.2 billion budget gap for fiscal 2027.

If changes aren’t made to the formula, “it will not keep pace with actual costs, and in the long run, eventually everybody will potentially be on ‘save harmless,’ ” said Brian Cechnicki, executive director of the Association of School Business Officials of New York.

Complicated calculation

Foundation Aid was put in place to provide more equitable funding and give school administrators a better idea of the aid they’d receive each year.

The formula bases aid on a number of factors, including student need, regional costs, the cost of a successful education and how much districts expect to raise from local sources, primarily property taxes.

Over the past 18 years, poverty levels have increased in some areas, populations have shifted, student needs have increased and what’s considered student success has changed as the state puts less emphasis on standardized testing.

And schools have new demands on them, for example, increasing pressure to address mental health and a greater emphasis on school security, Lowry said.

Last year, lawmakers tweaked the formula, updating poverty data and replacing 2000 census data, as well as increasing aid for English language learners and low-income students who typically need additional support services.

Those changes were important, said Brian Fessler, chief advocacy officer for the New York State School Boards Association. “We are just hopeful that that represented step one of the process … and it’s not one and done,” he said.

Changing needs

The formula uses what’s known as the “successful schools model,” which looked at successful districts’ per-pupil spending, largely using test scores to measure academic outcome. The cost analysis needs to be updated to reflect 2026, Fessler said.

The formula uses the Consumer Price Index to keep up with inflation, but it measures inflationary costs for individuals, not education spending, which is very different, Cechnicki said. As a result, the base aid number hasn’t kept up with education costs, he said, calling for updates to the measure.

The state Board of Regents is pushing to send increased aid to high-need groups including English language learners, as well as create new funds to support services for students experiencing homelessness.

The formula also assumes that enrollment declines mean a cost savings for districts, which is not necessarily true, Cechnicki said. For example, a district could lose one student in every grade and would still need the same number of teachers and buildings, he said.

Education advocates and leaders also said it should take the state tax cap into consideration. Currently, the formula assumes that districts where property values are high don’t need as much state aid because they can raise local revenue, education experts said. To override the state’s 2% cap on property tax increases, districts need approval from a supermajority — 60% of voters — and if the vote fails, they risk having to adopt a contingency budget that keeps spending flat.

High home values on Long Island don’t mean residents have that money on hand, Sen. Alexis Weik (R-Sayville) said.

The Hampton Bays district, which is on “save harmless,” has had slight enrollment declines but also a high income and wealth ratio. The growth in property wealth suggests a much wealthier community, Superintendent Lars Clemensen told Newsday, though the district has a high number of economically disadvantaged students as well as a rising immigrant population.

With no guarantee of funding increase for next year’s budget and costs continuing to rise, it’s difficult to plan and there’s potential for cuts, Clemensen said. You have to be “clear and transparent with the community to say, ‘Hey these things are at risk,’ ” he said.

Funding challenges

Updating the formula itself will take time to study and money to implement, education advocates and leaders said.

“It’s going to be a challenge because for every one you help, you’re going to hurt somebody else,” Weik told Newsday.

It’s unclear if Hochul and the legislature have the desire to take on major changes to the formula this session outside of increases to aid for universal prekindergarten, which Hochul and lawmakers have pledged to address.

Assemb. Doug Smith (R-Holbrook) told Newsday he thinks it’s important to not only protect the “save harmless” policy, which Hochul tried to cut in 2024, but also to address the root causes of the problem. “We do spend a lot of money on education, but it’s important that we make sure the resources are getting to the districts that need them,” he said.

All 213 legislative seats and the governor’s seat are up for election, increasing pressure to deliver for constituents.

“We want to make sure that districts are given the resources to educate their pupils,” Assembly Education Committee Chairman Michael Benedetto (D-Bronx) told Newsday, adding that legislators will be discussing some changes as they focus on the budget. He said, “And when it comes to putting the budget together, we take all of these factors into consideration and we come up with a figure and a way to make that happen as best we can.”