It Is Time For New York City Schools To Receive Charter School Transition Aid

By Mary McKillip

All school districts in New York State, except New York City, are eligible to receive transitional aid from the state to offset a portion of the cost of charter school growth. New York City schools have been deprived of $2.81 billion in transitional aid from 2011 to 2023.1

New York City is the only district in the state that is exempt from this assistance, and city schools will miss out on an additional estimated $93 million in transitional aid during the current school year. In addition, New York City is statutorily required to provide rental assistance to charter schools, the only district in the state, and indeed the nation, with this onerous financial obligation.

There are 343 charter schools statewide, and 267 of them are in New York City. The continual exclusion of New York City, the district most saturated with charter schools, from transitional aid is manifestly unfair.

Public school districts pay tuition to charter schools for each student enrolled. As previously documented, since 2008, New York State school districts are eligible to receive annual transitional aid if the number of students in charter schools is more than 2% of total district public school enrollment, or if total payments from the district to charters is more than 2% of the district’s general fund expenditure.

Transitional aid is based on the year-to-year increase in charter school enrollment multiplied by a factor of the charter school per pupil tuition amount. Since the inception of transitional aid, $546 million has been distributed to districts statewide, with the exception of New York City. New York City’s ineligibility is the result of former City Mayor Michael Bloomberg’s decision 16 years ago to forego this state aid in exchange for permission from the state to expand the number of charter schools in the city.

In the 2022-23 school year, 116,957 students were enrolled in eligible2 charter schools and 849,863 in traditional public schools. During that year, New York City allocated $2.75 billion in general fund payments to charter schools, representing 9% of total expenditures and 11% of eligible student enrollment, well above the 2% required to qualify for transitional aid.

New York City would have received $2.81 billion in transitional aid from 2011 through 2023 to offset the cost of substantial charter school growth during that period. The chart below shows estimated transitional aid to New York City that would have been provided each year, along with total transitional aid distributed to other districts in the state. The downward trend in aid for New York City is due to a slowdown in charter enrollment growth, starting in the 2019-20 school year, compared to growth rates in prior years.

For years, students in New York City district schools have been shortchanged at least twice: by the state’s refusal to fully fund Foundation Aid, the state’s school funding formula, and by the diversion of vital state aid away from district schools to charters.

In addition, the New York City Department of Education (DOE) has been required since 2014 to provide space for all new and expanding charter schools in DOE school buildings, or to subsidize their rent in private buildings. While the state covers 60% of that cost, the Independent Budget Office estimated that New York City public schools still spent $75 million in the 2022-23 school year on charter lease assistance, after taking into account the state reimbursement. This amount is increasing fast and is likely to continue to do so as charter enrollment and rental costs grow.

New York State must extend charter school transitional aid to New York City schools, while maintaining the regional cap on charters. In addition, the state should assume the entire cost of charter school rent, as long as continued growth of this sector is encouraged at a time of overall enrollment decline.These policy changes would help minimize the damage to the New York City Department of Education budget and make it possible to more adequately address the needs of the students the DOE is responsible for serving.

1Transitional Aid calculated using New York City Charter data from NYSED SAMS State Aid Output Reports; state total transitional aid from NYSED State Aid Handbooks, total State Transitional Aid.

2The transitional aid charter school enrollment calculation excludes students enrolled in schools chartered by the board of education.

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