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New York State's Dual Crises:Low Graduation Rates and Rising School Taxes
 
A Report by the Public Policy and Education Fund, Inc.with the assistance of the Fiscal Policy InstituteMay 18, 2006
 
 
This report was written by Bob Cohen of the Public Policy and Education Fund, Inc.(PPEF) based on data, tables, and charts provided by Dr. Trudi Renwick of the Fiscal PolicyInstitute (FPI). Martha Vandrei, an intern of PPEF, Paul Novaro, an intern of the Alliance for Quality Education (AQE), and Michael Davoli, AQE's Statewide Campaign Associate, all providedresearch assistance. Billy Easton, the AQE Executive Director, provided significant assistance toPPEF in this report.PPEF supports community organizing, research, and public education on issues of concern to low and moderate income New Yorkers. FPI is a nonpartisan research and educationorganization that focuses on a broad range of tax, budget, economic and related public policyissues that affect the quality of life and economic well-being of New York State residents. BothPPEF and FPI are members of AQE.AQE, formed in 2000, is a coalition of over 230 organizations statewide dedicated toensuring that the constitutional right to a quality education becomes a reality. Local AQE affiliatespresently exist in Western New York, the Finger Lakes, the Capital District, the Southern Tier,Central New York, Westchester, New York City, Long Island, and the Hudson Valley.To order more copies of this report or for more information, please contact PPEF or AQEas follows:Public Policy and Education Fund94 Central AvenueAlbany, NY 12206(518) 465-4600 (ext. 104)(518) 465-2890 (fax)www.ppefny.org Alliance for Quality Education94 Central AvenueAlbany, NY 12206(518) 432-5315(518) 432-9498 (fax)www.allianceforqualityeducation.org 
 
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I. Introduction: The Dual Crises
New York State's school funding system faces dual crises. First is the failure to providechildren with a “meaningful high school education,” also called a “sound, basic education," asmandated by the state constitution and the Campaign for Fiscal Equity (“CFE II”) decision.
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Theclearest consequence of this failure is that over one-third of high school students today do notgraduate in four years. In the 2006-07 Enacted Budget, the Legislature increased school aid by$1.1 billion -- roughly the state aid figure necessary to maintain current school programs at their present levels.
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However, as this report highlights, the budget did not provide even close toenough resources to address the graduation crisis.Second is the trend of local school taxes, the primary mechanism through which we fundour schools, to spiral ever upwards, making them increasingly unaffordable for manyhomeowners in the state, and for residents of certain regions of the state in particular. (State aidis the second largest source of school funding.) To address either of these twin challenges inisolation will exacerbate the other.In the 2003 CFE decision, the New York State Court of Appeals, New York’s highestcourt, held that the state constitution requires that enough funding be provided, to afford childrena "meaningful high school education." The court mandated that the state act by July 30, 2004.When the Governor and the Legislature failed to act, an appellate court set the additional fundinglevel necessary to meet the constitutional standard at $4.7 billion to $5.6 billion for New York Cityalone (by a combination of city and state funds).
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Significantly more will have to be invested tomeet this standard statewide.
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 The State’s political leadership must provide significantly more funding to address thegraduation crisis in our schools. It is obvious that students that drop out are simply unprepared
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Campaign for Fiscal Equity v. State, 100 N.Y.2d 893 (2003) (“CFE II”). PPEF documented the failure of theLegislature and the Governor to address CFE in the 2005 session of the Legislature in a previous report. Public Policyand Education Fund, Inc.,
State of Our Schools in 2005:The Widening Funding Gap
," (December 2005); available atwww.ppefny.org.
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Education Conference Board Analysis, cited in Fiscal Policy Institute,
Balancing New York State's 2006-2007 Budget in an Economically Sensible Manner 
, January 2006, at 28; available athttp://www.fiscalpolicy.org/2006FPIBudgetBriefing.pdf. The Education Conference Board, a coalition of educationleadership groups, assumed that local property taxpayers would also contribute roughly $1 billion.
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The appellate division decision setting the funding level is now on appeal by both parties to the Court of Appeals.However, the 2003 decision by the high court (CFE II
 
) establishing that the state violated the rights of New York Citychildren, and mandating significant additional funding at some level is not appealable.
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The Schools for New York’s Future Act (“SNYFA,” S.7112, sponsored by Senator Suzi Oppenheimer), sets theadditional state operations funding necessary to comply with CFE II at $8.7 billion after 4 years. The State Assemblypassed a budget proposal in 2006 that would instead provide $6.8 billion after 6 years to comply with CFE II (A.10256).
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