Agency of Education presents timeline and major assumptions for proposed foundation funding formula

The Agency of Education on Feb. 5 told the House Ways & Means committee it plans a multi‑year transition to a statewide foundation funding formula that would shift to full implementation under a new governance structure on July 1, 2027, with fiscal year 2026 serving as an "informational year." "I'm Zoe Saunders, Secretary of Education," Saunders said as the presentation began.

Why it matters: The proposal would change how state education dollars flow to districts and schools, affect small‑school weightings, increase some categorical supports and change how career and technical education (CTE) funding flows. Committee members pressed the agency for the model spreadsheets and more detail on eligibility, rounding rules and how costs such as special education would be carried during the transition.

The presentation and committee discussion covered four broad areas: implementation timing and incentives; school size (sparsity) adjustments; categorical increases (notably special education and transportation); and CTE funding flows. Agency staff and outside consultants said the modeling assumes full implementation of the formula in fiscal year 2028 but that governance and foundation changes would begin July 1, 2027, with FY 2026 (school year 2025–26) used to signal parameters and allow districts time to plan.

Key implementation assumptions and timelines - Implementation timeline: The Agency framed FY 2026 as an informational year, with the governance shift and the foundation formula scheduled for 07/01/2027. Agency staff said they expect additional multi‑year work to rescale buildings and staffing after that date rather than immediate systemwide consolidation. - Signaling vs. eligibility: The agency will publish parameters (for example, class‑size expectations and criteria distinguishing "small by necessity" from "small by choice") during the informational year. The agency said the formula will initially apply weights to the existing portfolio and that, in future years, eligibility for certain small‑school weights may be tightened by policy decisions.

School size, class‑size and scale adjustments - Class size assumptions: The proposal uses class‑size targets embedded in the model: roughly 1:15 for kindergarten–grade 3 and 1:24 for upper grades. The agency said many schools currently do not operate at those class sizes and that districts will need transition support. - Size adjustment approach: Consultants described a continuous, smoothed size‑adjustment curve designed to avoid funding "cliffs" (large changes in funding for small enrollment differences). The consultants said the model treats the size adjustment as a continuous variable and applies a curve rather than abrupt cutoffs; the floor is tied to enrollment bands used in the evidence‑based (EB) model. Staff said the published tables show rounded numbers but the model applies full (unrounded) values. - Sparsity/scale application: Current sparsity adjustments are applied at the district level in the model (as they are today), not at the school‑enrollment level. Committee members questioned whether district‑level sparsity appropriately targets students who attend very small schools.

Base, student weights and categoricals - Base and student weights: Agency materials and consultants presented a base per pupil funding amount of about $13,200 and described additive student weights in the model: an economically disadvantaged weight of 0.75 and an English‑learner (EL) weight of 1.5, among others. Consultants emphasized weights are additive (each is applied separately) rather than multiplicative. - Categorical adjustments: The proposal models increases in some categorical lines during transition. Transportation reimbursement would move from roughly 50% toward full reimbursement in the model, with an assumption that some cost savings could be realized over time. The materials also model a notable increase in special education funding; agency staff and consultants stated the model includes a $70,000,000 delta that represents the difference between districts' current special education spending and the revenue sources (federal, state census block and other state special‑education dollars) currently allocated to that service.

Career and technical education (CTE) - CTE treatment: Consultants described a two‑part flow for center‑based (BOCES/CTE center) students: the sending district would continue to generate base funding for those students, and a per‑FTE CTE weight is proposed to flow to the CTE provider. The presentation explained an on‑behalf payment concept: roughly $8,000 of a sending district's base per CTE FTE would be transferred to the CTE provider (BOCES), while approximately $5,200 would remain with the sending district to offset guidance, diploma requirements and the loss of economies of scale when students leave the sending school to attend a center. Staff explained the model accounts for part‑time and full‑time CTE enrollment by prorating those amounts to reflect FTEs.

Questions and outstanding items the committee requested - Access to the model: Members repeatedly asked to see the underlying spreadsheets and line‑by‑line model used to produce the tables and statewide estimates; staff said the spreadsheets have been shared with the Joint Fiscal Office and offered to provide a deep dive session for committee members and staff. - Rounding and statutory conventions: Members raised concerns about decimal precision and rounding conventions (how many decimal places will be used when placing numbers into statute) and asked staff to standardize presentation and statutory language. - Eligibility criteria and small‑by‑necessity definitions: Legislators pressed for concrete criteria that will determine which schools remain eligible for small‑school weights in later years and asked for clarity on transitional supports. Staff said they plan to propose specific criteria during the informational year. - Special education and BOCES: Several legislators asked how the proposed $70,000,000 increase interacts with extraordinary special‑education costs and whether expanded regional services (BOCES) will be part of the strategy to manage those costs over time. Agency staff said BOCES are being contemplated as part of future state solutions and that further work and training on special‑education delivery will continue in parallel.

What the agency committed to next The Agency of Education and its consultants agreed to return with a deeper technical briefing that includes the model spreadsheet, more district‑level illustrations (examples that show total resources by district given local student characteristics), and more detail on rounding and statutory presentation. Committee members signaled they want concrete criteria and examples to understand how the funding will flow to districts under the proposed formula.

Ending The committee concluded the session by asking the agency and APA Consulting to schedule follow‑up technical briefings so members could work through the spreadsheet assumptions and see district‑level impacts before further policy decisions are finalized.