NYS EDUCATORS AND LAWYERS!! I have a question about NY school law

Cross-posted from GD

NYS EDUCATORS AND LAWYERS!! I have a question about NY school law
I want to opt my child out of the mandatory ELA testing. There is good reason. He has a disorder that makes this sort of testing nearly impossible. He always scores on the very bottom of the range. He has anxiety around these tests, and there is no need to put him through it. A teacher I know told me I can legally opt him out.

I asked the school principal. This was his response: Each NYS school is allowed to have 5% of their student body not take the test. Because I live in a college town, that 5% is already taken by kids who are on extended leave while their parents are on sabbatical. Any person above that 5% threshold who opts out, will not count when it comes to state funding for the school. In other words, it's as if that child doesn't go to the school. He told me the NYS legislature has just passed this law in order to discourage parents from opting out of the mandated tests. If they opt out, they cost their school an entire year of funding for that child.

How can they do this? How is this legal? How can they take my tax dollars, yet not pay for my child if I opt out of a test they have no legal right to force him to take? I'm seriously considering taking on a lawsuit here.

Anyone have insight or knowledge they can share in this area?