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Office of the New York State Comptroller
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January 16, 2014, Contact: Press Office (518) 474-4015

DiNapoli: 87 School Districts in Fiscal Stress

Central New York, North Country and Western New York Have Highest Percentage of Stressed School Districts

Eighty-seven school districts, 13 percent of school districts statewide, have been designated as fiscally stressed under State Comptroller Thomas P. DiNapoli’s Fiscal Stress Monitoring System. DiNapoli’s office evaluated 674 school districts with fiscal years ending on June 30, 2013.

“School districts are a critical barometer to the fiscal health of our local communities,”said DiNapoli. “Unfortunately, reductions in state aid, a cap on local revenue and decreased rainy day funds are creating financial challenges that more and more school districts are having trouble overcoming. My office’s fiscal stress scores highlight the need for school district officials to manage their finances carefully with an eye towards long-range planning and how they can operate more efficiently.”

Using financial indicators that include year-end fund balance, cash position and patterns of operating deficits, the system creates an overall fiscal stress score which classifies whether a district is in “significant fiscal stress,”in “moderate fiscal stress,”as “susceptible to fiscal stress,”or “no designation.”

The Comptroller’s office analyzed separate environmental indicators to help provide insight into the health of the local economy and other challenges that might affect a school district’s finances. These include such measures as student enrollment, property value, budget vote results and poverty.

To date, 12 school districts have been classified as in “significant fiscal stress,”23 in “moderate fiscal stress,”and 52 as “susceptible to fiscal stress.”

The fiscal stress scores are based on financial information submitted as part of each district’s ST-3 report filed with the State Education Department as of Dec. 13, 2013. Today’s announcement does not include scores for the dependent school districts in the “Big Four”cities of Buffalo, Rochester, Syracuse and Yonkers. Information for these districts will be incorporated into the scoring for their respective cities and reported later this year.

DiNapoli said 587 districts have been classified as “no designation.”One school district continues to have its information vetted and is classified as “data inconclusive,”and one school district has yet to submit necessary financial information to the Comptroller’s office and is designated as “have not filed.”

According to a report issued today with the fiscal stress scores, school districts found to be in fiscal stress share a number of common characteristics. Most are operating with low fund balance, operating deficits and limited cash on hand. These districts were also found to have a much higher likelihood of using short-term borrowing to bridge cash flow gaps.

Fiscally stressed school districts also share a number of environmental themes, according to DiNapoli’s report. Although many factors are outside a district’s control, they can drive additional costs or hurt the district’s ability to raise revenues. For example, fiscally stressed school districts were more likely to experience declining property values, high poverty rates and low school budget support.

The report also found:

  • High-need urban/suburban school districts were three times more likely to be considered in fiscal stress compared to low-need districts;
  • The percentage of school districts in fiscal stress exceeded 30 percent in six counties –Chemung, Clinton, Madison, Montgomery, Niagara and Tioga;
  • Upstate school districts were more likely to be in some level of stress compared to downstate districts; and
  • Regions with the highest percentage of stressed school districts were Central New York (22.9 percent of districts); North Country (16.9 percent) and Western New York (13.9 percent).

Later this year, DiNapoli’s office will release separate scoring lists for those cities and villages whose fiscal years end at various periods throughout the year. The Comptroller’s monitoring system previously identified a total of 40 municipalities in some level of fiscal stress. This list includes 16 counties, 18 towns, five cities and one village.

For the complete list of school district fiscal stress scores, visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/pdf/schools/schools_summary_lists.pdf

For a copy of the fiscal stress commonalities report visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/pdf/FiscalStressSummaryResultsSchoolDistricts.pdf

For a copy of the Comptroller’s recent report on school district revenues, visit:
http://www.osc.state.ny.us/press/releases/jan14/011414.htm

For the complete list of municipal fiscal stress scores, visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm

For quick facts on DiNapoli’s Fiscal Monitoring System, visit:
http://www.osc.state.ny.us/press/fiscal_stress_monitoring/june_2013/fact_sheet_monitoring_system.pdf

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