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IN THEORY, at least, New York State's formula for dispensing aid to local school districts should work well as an equalizer.

It's a complicated mixture that tries to assess a district's wealth -- as measured by the assessed value of its property and the income of its residents -- and distributestate aid in inverse proportion. Extra expenses that districts incur to educate students with special needs -- such as the handicapped or those who score below a certain point on state tests -- are factored in by using supplemental formulas or various "weightings" that count such students extra.

But the system is undermined by built-in protections that keep districts from losing money even when the formula says they should.

The compensating weights also do not make up for the disparities in district wealth. Not only does the background of poor students send them to school at a disadvantage, but their neighborhoods usually will not generate enough property tax revenue to buy the extra educational help they need. In short, they face a double whammy.

That's part of the reason a wealthy suburb like Amherst is able to spend some 18 percent more on each of its students than an urban center like Buffalo, whose pupils need help the most.

Elsewhere, $19,979 per pupil

Across the state, disparities are even greater. The Pocantico Hills public school system in affluent Westchester County spends an average of $19,979 on each student in one year. A pupil in the similarly sized but much poorer Wells Central district in Hamilton County has to compete with the help of only $6,171 in school spending.

If the state aid formula were truly an equalizer, not only would it help poor districts reach the level of rich ones, but it also would compensate for the disadvantages poor students bring to the classroom.

Those differences account for a good part of the reason that even when per pupil spending is almost equal -- as it was two or three years ago in Williamsville and Buffalo -- students from the rich district still did significantly better in school, as measured by their success in earning Regents diplomas and getting into college.

The formula looks at property wealth and income in a district, compared to the state average, as well as the number and types of pupils, to come up with an aid ratio. That ratio is then multiplied by whatever amount the Legislature sets as the basic per-pupil maximum grant in a given year. The greater the wealth, the smaller the ratio and the less a district gets for each of its students.

For example, in urban Buffalo, where property values and incomes are lower, the aid ratio this year was just under 65 percent. In suburban Williamsville, with its accumulation of wealth, the ratio was about 21 percent. And in more rural Alden, which falls between the two extremes, the ratio was about 54 percent.

Buffalo got a basic state operating grant of $2,437 for each of its pupils, while Alden got about $2,031. If the formula had been strictly applied, Williamsville would have gotten about $790 per student, or a total of just over $8 million.

"Save harmless" should go

However, Williamsville ended up with $10 million in general aid because of the state's "save harmless" provision that prevents aid from being cut to any district even when the formula dictates a reduction.

Williamsville has gotten the $10 million for the past 12 years even though, according to the formula, the amount should have decreased as the district's wealth increased or it lost enrollment.

There are also other loopholes. The supplemental formulas that allocate money for special purposes sometimes are jiggled to drive money to wealthy districts that wouldn't get it in the general formula. It's all an effort to keep voters happy and is part of the political reality of budgeting.

But it's not just state aid that accounts for the spending differences. It's also the fact that wealthy districts are willing -- and more importantly, able -- to do more themselves to fund education. That accounts for the fact that the gap between Williamsville and Buffalo is widening, rather than getting smaller.

The 1990 state Education Department statistical report shows that in 1987-88, Williamsville spent only a couple of hundred dollars more per pupil than Buffalo -- $6,001 to $5,892. The previous year's report showed Williamsville actually spending less, on average, using the state's calculation.

But this year's budget and enrollment figures show Williamsville spending an average of $7,321 while Buffalo has climbed only to $6,233. Thus, the gap widens despite the formula.

With local taxpayers in districts like Williamsville able to pay more, and with their students already benefiting from a home environment that correlates with school success, it makes sense that the Legislature should be focusing the state's extra resources on the students who need help most.

Tomorrow: Ways to change the formula.

The Imperfect Equalizer State aid tries to equalize education but doesn't quite make it. School district BuffaloAldenWilliamsville Property value per pupil$70,333$98,912$148,254 % budget funded by prop tax169W% Share funded by sales tax7%6%7% Share funded by state aid75E0% Total per pupil spending$6,233$6,997$7,321

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