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March 14, 2011

 

DiNapoli Report Finds More Schools Cutting Costs to Make Ends Meet

Districts in Mid-Hudson Valley and Long Island Showing Most Fiscal Stress in NYS

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School districts across New York are reacting to current economic conditions by reducing spending, with the number of districts doing so in 2010 rising six-fold from two years earlier, according to a report released at a meeting of the New York State School Boards Association today by New York State Comptroller Thomas P. DiNapoli.

"The cost of education, like everything else, keeps going up, and school district revenues are going down," DiNapoli said. "Many school districts have taken steps to align spending with today's economic realities. But it's imperative that every school district look at ways to cut costs and plan strategies that help them deal with fiscal stress. The fiscal climate isn't going to get better overnight. School districts have to find ways to educate and economize at the same time. Raising taxes should be a last resort. Districts need to take a serious look at streamlining operations, sharing services and using multiyear planning to keep costs in check."

DiNapoli's report, "Staying Ahead of the Curve: School Districts Responding to Fiscal Challenges," used a series of 22 financial indicators to assess the fiscal condition of school districts around New York State. The study found that general fund expenditures declined in 33 percent of New York's districts in 2010, indicating many are already developing ways to manage financial challenges.

The report notes that school districts on Long Island and in the Mid-Hudson regions showed signs of fiscal stress on 16 of the 22 indicators, the most in the state, largely because those areas have been hit hardest by the collapse of the housing market, and face higher per-pupil costs.

Districts in the Finger Lakes region showed higher than average stress on 10 of the 22 indicators, while those in Central New York, the Southern Tier and Western New York were higher than average on 9 indicators. All of those regions have high rates of pupil need, relatively low property wealth, are highly dependent on state and/or federal revenues, and have higher levels of debt.

Overall, districts in the Capital Region, Mohawk Valley and North Country showed the fewest signs of fiscal stress.

DiNapoli's office suggests school districts:

  • Take advantage of multiyear planning tools developed by the Office of the State Comptroller to understand the impact of today's decisions over time;
  • Identify cost savings opportunities through improved business processes; and
  • Investigate and execute shared service agreements with other districts or local government entities. A 2009 DiNapoli report estimated that sharing of central business office functions could potentially save municipalities and school districts up to $765 million statewide.

    The report notes that fiscal stress has already forced the state to reduce its planned aid to school districts by $1 billion in the 2010-2011 fiscal year. According to the governor's proposed budget, school districts could face additional cuts amounting to $1.5 billion in 2011-12, due in part, to the phase out of federal stimulus funds. These factors come amid continued increases in educational costs.

    For a copy of the report, go to: http://www.osc.state.ny.us/localgov/pubs/research/schoolsfiscalstress.pdf

    Profiles for each region can be found at: http://www.osc.state.ny.us/localgov/pubs/research/regionalprofiles.pdf



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