Thirty-one school districts statewide were designated in fiscal stress under New York State Comptroller Thomas P. 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”: Mount Vernon City School District in Westchester County and Northern Adirondack Central School District in Clinton County. Northern Adirondack was ranked in significant fiscal stress last year as well.
DiNapoli also released a report that found:
- 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 percent of the districts in this category designated in some level of stress.
- Western New York was the only region that had no school districts in fiscal stress for the 2019-20 school year.
School districts in fiscal stress share some common issues. Nearly all fiscally stressed school districts (87.1 percent) have low liquidity, also known as “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 structural 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 has withheld 20 percent from certain state aid payments to school districts, amounting to at least $300 million statewide. In mid-January 2021, the state Division of the Budget indicated that most of the funds 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.
View school districts in stress:
School Districts in Stress Fiscal Years Ending 2020
View full list of school district stress scores:
Fiscal Stress Monitoring System Search Tool
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