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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015

DiNapoli: 82 School Districts in Fiscal Stress

Highest Concentration Continues to be in Central New York and Long Island

January 28, 2016

Eighty-two school districts have been designated as fiscally stressed under New York State Comptroller Thomas P. DiNapoli’s Fiscal Stress Monitoring System. The scores are based on the evaluation of 672 school districts with fiscal years ending on June 30, 2015.

This is the third year DiNapoli’s office has assessed and scored the financial stability of school districts. The latest round of scoring designated eight school districts in “significant fiscal stress,” 24 in “moderate fiscal stress” and 50 as “susceptible to fiscal stress.” A total of 90 districts were listed in one of these three categories last year and 87 were listed in stress the year prior.

“The overall number of school districts in fiscal stress has essentially remained steady the past three years,” said DiNapoli. “A few have remained in stress for the entire period and we’re watching closely to see if the limited growth allowed by the tax cap this year pushes more school districts into fiscal stress. I recommend that local school officials use our system as a tool when crafting their budgets and developing long-term financial plans.”

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

The eight school districts that were classified in “significant stress” were: Hempstead Union Free School District (Nassau County); Sachem Central School District (Suffolk); Wyandanch Union Free School District (Suffolk); West Seneca Central School District (Erie); Corinth Central School District (Saratoga); East Ramapo Central School District (Rockland); Herkimer Central School District (Herkimer); and Copiague Union Free School District (Suffolk).

The Hempstead Central School District, which has experienced substantial increases in fiscal stress for two years in a row, received a score of 98.3 percent, the highest score ever recorded for a school district.

The scores are based on financial information submitted as part of each district’s ST-3 financial report filed with the State Education Department as of Dec. 31, 2015. 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 later this year.

The system identified four districts with an increase of 40 percentage points or more in their fiscal stress score in the past year: Broadalbin-Perth Central School District (Fulton); Gloversville Enlarged School District (Fulton); Rhinebeck Central School District (Dutchess); and Sandy Creek Central School District (Oswego). All of these districts are listed in the moderate fiscal stress category.

Thirty-two school districts have been listed in a fiscal stress category for all three years. The West Seneca Central School District is the only district in the state to be designated in significant fiscal stress for all three years.

The Comptroller noted a number of significant improvements among certain school districts. Six districts experienced decreases of 40 percentage points or more in their fiscal stress score: Glens Falls Common School District (Warren); Johnson City School District (Broome); Lawrence School District (Nassau); Lewiston-Porter School District (Niagara); Niagara-Wheatfield School District (Niagara); and Peekskill City School District (Westchester).

According to a research 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 balances, a pattern of operating deficits and limited cash on hand. In addition, fiscally stressed school districts are more likely to have a shrinking property tax base, low budget support and a low graduation rate. 

DiNapoli’s report also highlighted:

  • Regions with the highest number of stressed school districts last year were Long Island (25); Central New York (nine) and the Mohawk Valley (seven);
  • Long Island has a disproportionately high share of districts that have been designated in fiscal stress each of the past three years, with nearly one third of the statewide total;
  • More than 77 percent of school districts statewide were not in a fiscal stress category in any of the three years; and
  • Nearly 30 percent of city school districts were designated as fiscally stressed compared to just 11 percent of other school districts.

For a list of school districts in fiscal stress and their scores, visit: https://www.osc.state.ny.us/local-government/fiscal-monitoring/archived-data-and-publications

For a copy of the fiscal stress research report, visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/pdf/threeyears_schools0116.pdf