Chapter 34: New York

The state of New York employs a system of fiscal federalism, with funding for public schools deriving from three sources: approximately 4% from federal sources, 42% from state formulae aids and grants, and 55% from local sources.^1,2

The state’s general fund provides approximately 78% of the funds supporting state aid for public schools, wherein the major sources of revenue are state income and sales taxes. About 10% of state support for public schools comes from the School Tax Relief program (STAR), and the balance of support (approximately 12%) from a Special Revenue Fund that accrues state lottery, video lottery terminal, and commercial gaming receipts.³ The state earmarks all lottery and gaming proceeds for public P–12 education. The state has also established that the general fund will guarantee any shortfalls in lottery revenues for schools.⁴