This article was originally shared via email by City & State magazine on Feb. 24, 2026: 

New York State’s Foundation Aid formula is designed to drive state education support to its neediest schools, but the current proposal for the next fiscal year clearly shortchanges the children of New York City, the state’s largest and most diverse school system, where over 75% of students live in poverty.

Foundation Aid, the primary source of state support, is developed using a formula that encompasses categories of needs, generally weighted to ensure that the state's diverse school districts are adequately funded to provide a "sound basic education" to all its children. However, changes to the formula last year resulted in New York City receiving $314 million less than it would have otherwise received.

This year’s proposed formula continues to underestimate the needs of the city’s public schools, with a reduction of over $400 million if last year's inequities continue. The Legislature and the Governor need to improve the current proposal in three important categories:

Regional Cost Index

This measure was put in place to address the fact that education costs vary widely across the state. To compute the actual cost that local school districts face, the system uses median salaries of local professions that require credentials similar to those of teachers. However, this index hasn't been updated for any area other than Westchester County in years.

As it moves towards compliance with the state's new class size law, New York City's efforts to hire and retain the best teachers could be slowed unless the Regional Cost Index is updated to reflect the increasing costs of providing "a sound basic education."

The New York City Independent Budget Office found that even a small percentage increase in this measure could result in nearly $540 million more for New York City.

Pupil Needs Index

Specifically designed to help districts meet the challenge of educating the highest-need children, the proposed formula needs to be changed to increase the weighting for certain categories of English Language Learners and for students with disabilities.

The IBO found that various proposals to update the current weighting for English Language Learners would produce from roughly $50 million to $69 million for New York City schools.

Students in Temporary Housing and Foster Care

The Foundation Aid formula needs to recognize the rise of students living in temporary housing and foster care. According to Advocates for Children, 154,000 city students — more children than the entire student population of the state’s other large districts — are living either in shelters or are doubled up in apartments.

The New York City school system faces particular costs in educating children facing this challenge, from counseling to food to transportation. The Foundation Aid formula needs to take that into account. 

According to the IBO, creating a weighting of only 0.12 in the formula to account for homeless children would give the city nearly $100 million to help mitigate the challenges these children face. Alternatively, creating a weight that recognizes the needs of both homeless children and those in foster care could provide an additional $280 million in funds for New York City.

Foundation Aid exists because advocates recognized that the state funding for schools had become a haphazard, highly political process rather than one designed to actually meet the needs that existed across the state, particularly in the poorest of its 670 school districts.

It took a long court and legislative battle to establish that the underfunding of local schools violated the state’s constitutional obligation to educate all its children, including ensuring that children in high-needs districts didn't have higher class sizes than the rest of the state. Then, economic and other problems meant that it was not until 2023 that the state fully funded the program.

The Court of Appeals decision that properly funding schools was a constitutional responsibility of the state, and the subsequent creation of the Foundation Aid program, were a landmark in education in New York.

But New York can’t continue to meet that constitutional obligation unless the Foundation Aid formula directs the funds to the districts and the schoolchildren who need it the most.

New York City students are entitled to full support. The solutions aren't complicated; they need to get done.