March 17, 2011
DiNapoli: Most Districts Have Enough Reserves For One Year
School districts in central New York and the Finger Lakes would have the least ability to tap reserves to make up for any reduced state education funding, according to an analysis by New York State Comptroller Thomas P. DiNapoli. DiNapoli's analysis also notes that while most districts could cover the aid cuts with reserve funds, those districts would likely deplete all of their reserves in a single school year. The governor's 2011-2012 Executive Budget proposed a $1.5 billion (7.3 percent) net cut in state aid to education.
"Most districts have big enough reserves to cover the proposed cuts for one year," DiNapoli said. "But after that, the reserves would be gone and without other actions, the expenses would still need to be addressed. And more than 100 districts across the state don't have enough reserves for even one year.
"If costs increase by even a modest 3 percent, the number of districts with problems would double. Many schools districts are going to have to tighten their belts another notch next year and beyond."
The median impact of the proposed cuts on district operating aid (which excludes building aid) would be 12.5 percent, though eight districts would see cuts of more than 20 percent. The proposed reduction would have the greatest impact on average-need districts as wealthier districts rely less on state aid and high-need districts would see smaller drops in state funding.
According to information reported to DiNapoli's office, school districts outside New York City have $1.77 billion in undesignated reserves and $306 million in excess Employee Benefit Accrued Liability Reserves (EBALR). As of January, districts reported having $354 million in federal funds still available for the 2011-12 school year. The Executive Budget proposes districts use undesignated reserves and unspent federal education jobs funds to help mitigate the cuts.
DiNapoli's analysis of the fiscal impact of proposed school aid cuts can be found at: http://www.osc.state.ny.us/localgov/pubs/research/snapshot/0311snapshot.pdf.
Details on individual school districts can be found at: http://www.osc.state.ny.us/localgov/pubs/research/snapshot/district_by_district031711.pdf