Checkerboard II: An Analysis of Tax Effort, Equalization, And Extraordinary Needs Aid

Abstract

A proposal in the New York State Assembly in 2000 considered eliminating Tax Equalization Aid to school districts in order to fund the elimination of aid caps, called Transition Adjustment. In response to that proposal, this report examines the equalizing or disequalizing effects of three types of New York state aid to school districts—Extraordinary Needs Aid, Equalization Aid, and Tax Effort Aid. This report finds that Equalization Aid and Tax Effort Aid act as poorly functioning regional cost aids. They are regional cost aids in the sense that most of the benefit of the two programs goes to districts in the two Long Island counties of Nassau and Suffolk. But they are poorly functioning because of the aid caps, which prevent poorer districts (those that are heavily dependent on state aid) from receiving the full amount of aid to which they are entitled.