ALBANY - The New York State Association of School Business Officials (NYSASBO) recently surveyed its members regarding the status of their fund balances. This new survey was prompted by a previous report issued jointly with the NYS School Boards Association that reported 99 percent of school districts tapped their fund balances to plug holes in their budgets, due to limitations in state aid and the property tax cap.
The new survey revealed the following:
81 percent of respondents - 250 of out 697 school districts - replied they would exhaust or spend down their fund balances within five years if limitations on state aid and the tax cap remained in place;
31 percent of respondents replied they would exhaust their fund balances within the next 18 months; and
56 percent of districts reported that at least 10 percent of their 2012-2013 operating budget consisted of monies from their fund balance.
"Many school districts, especially those in low wealth rural and urban communities, will be facing both educational and financial insolvency within the next couple of years," Michael. J. Borges, NYSASBO Executive Director, said. "State policymakers and particularly the Education Reform Commission must soon address the reality that many school districts will not be able to meet their obligations to their students to provide a sound basic education."
NYSASBO recommends that in addition to increases in school aid, the state implement significant mandate relief to reduce school expenses such as:
Reduce the need for annual internal audits;
Exempt school districts from the Wicks Law that enter into PLA's;
Bring NYS standards for Special Education in line with federal standards;
Require minimum health insurance contribution rates from employees; and
Workers Compensation reforms enacted in 2007 need to be implemented and expanded.
"The implementation of Tier VI will eventually save school districts money and the recent passage of procurement reform legislation, which we hope the Governor will sign, is also a step in the right direction, but much more needs to be done and soon," Borges said.