DiNapoli: WNY was only region with no districts in fiscal stress for 19-20 school year

Around New York State

31 school districts across New york State are in some form of fiscal distress, including five in the Capital Region (NYS Office of the Comptroller)

ALBANY, N.Y. (NEWS10) – Across New York State, 31 school districts were designated in fiscal stress under Comptroller Thomas DiNapoli’s Fiscal Stress Monitoring System for the school year ending on June 30, 2020.

“This is a time of unprecedented uncertainty as the COVID-19 pandemic continues to disrupt school district operations and finances,” DiNapoli said. “I urge school district leaders to closely monitor their financial conditions, even if their fiscal stress scores were low in the early days of the crisis.”

The Fiscal Stress Monitoring System, which excludes New York City schools and the “Big Four” city school districts of Buffalo, Rochester, Syracuse and Yonkers, found two school districts were designated as being in “significant fiscal stress.” These two districts are the Mount Vernon CSD in Westchester County and the Northern Adirondack CSD in Clinton County. Northern Adirondack was ranked in significant fiscal stress the previous year as well.

DiNapoli also released a report that found:

  • Western New York was the only region that had no school districts in fiscal stress for the 2019-20 school year
  • The Central New York and North Country regions had the highest percentages of districts in fiscal stress
  • High-need urban/suburban districts show the highest rate of fiscal stress, with 22.2% of the districts in this category designated in some level of stress

School districts in fiscal stress share some common issues, according to DiNapoli. Nearly all fiscally stressed school districts (87.1%) have a “weak cash position,” meaning there may not be enough cash on hand to cover operating costs. Almost half have a new or increased reliance on short-term cash flow debt, which can indicate a budgetary imbalance. Operating deficits and low fund balances are also warnings of fiscal stress.

DiNapoli’s report also reviewed environmental risk factors, which are often out of the district’s control and could be related to an increased chance of fiscal stress. Environmental risk factors include having a high percentage of economically disadvantaged students, a high teacher turnover rate, a decrease in local property values, a low budget vote approval rate, a high percentage of English language learners, and large class sizes. Environmental stressors are likely to have a financial impact during a recession, such as the one that began in 2020.

In addition, the state withheld 20% from certain state aid payments to school districts, totaling in at least $300 million statewide. In mid-January 2021, the state Division of the Budget indicated that most of the funds that were withheld are expected to be paid in the current state fiscal year. The possibility of additional federal aid may also mitigate some risk of stress in the near term.

DiNapoli’s report is based on districts that filed required financial information for the 2019-20 school year: 668 of the 672 school districts in 57 counties. Four school districts did not file or their reports were found to be inconclusive and were not included in the report. The recently formed Boquet Valley Central School District in Essex County, did not receive a score in 2019-20 because it only has one year of data. Three school districts did not file in time to receive a score: Livingston Manor Central School District, Roscoe Central School District and Wainscott Common School District.

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