Report Shows Some HV School Districts Are Fiscally Stressed

Feb 4, 2016

New York state Comptroller Thomas DiNapoli recently released his annual fiscal stress scores for school districts. A few in the Hudson Valley made the list, in varying degrees.

The 2014-15 school year is the third year DiNapoli’s office has assessed and scored the financial stability of school districts. One in Dutchess County shows the largest swing in the state. The Rhinebeck Central School District went from no designation of fiscal stress the previous two school years to moderate fiscal stress, a nearly 57 percent change. Thomas Burnell is the district’s assistant superintendent for support services. He says unanticipated expenses cut the fund balance in half.

“In the summer of 2014, we had a large number of special ed[ucation] students move into our district that were  not budgeted for, which caused us to expend more than half-a-million dollars in additional funds to cover the cost of these students’ tuitions and additional transportation for those students,” says Burnell. “We were also in a year in which we were planning to decrease our fund balance and had put that into the budget so it was sort of a double whammy for us.”

Burnell says the budget axe dealt a softer blow due to a large number of teachers who retired last year. He says without these retirements, there would have been layoffs. Brian Butry is a spokesman for the state comptroller.

“In the case of Rhinebeck, they have little left in what most people would consider to be the rainy day fund,” Butry says. “And so that’s their ability to weather any type of financial issue that may arise during the year or next year.”

He says Rhinebeck also has an increasing operating deficit that has grown each of the past three years. As for how quickly the district can improve its fiscal situation, Burnell says that will take time.

“Well, it’s going to be hard to improve because that score mainly, a lot of that is based upon your fund balance, and in this tax cap era that we currently are in, it’s very difficult for a school district to grow a fund balance back,” says Burnell. “It would take many, many years to do that because we can’t exceed the tax cap - or we can but you have to go out for the supermajority vote - so we’re kind of in a quandary.”

He says they will put a plan together to increase the fund balance as quickly as possible.

Meanwhile, the Peekskill City School District in Westchester County also showed a large swing, but in the positive direction. The report shows the district experienced significant fiscal stress in 2013-14, but not for the last academic year in large part because of the timing of steps taken to finance the settlement of real estate tax assessment claims.

The comptroller’s report identifies eight school districts in “significant stress,” including Corinth in Saratoga County. Another is the East Ramapo Central School District in Rockland County. Troubled in several other ways, the district was being assessed by a state-appointed three-person monitoring team led by former New York City Schools Chancellor Dennis Walcott. In August, the team was tasked with examining operations and providing recommendations that are both fiscal and educational in nature. Butry, pointing out the uniqueness of the district, says the underlying fiscal issue is commonplace among the eight districts in significant stress.

“They do have some unique challenges just because of the situation that is ongoing there in East Ramapo, but there are other districts that have similar spikes in their fiscal stress score,” says Butry. “And to be honest, in East Ramapo they’ve actually improved their score from one year to the next, and we can see some of the improvements that have been made there, specifically eliminating a large deficit that they had had in previous years. But, again, a very low fund balance, which is really the most common theme amongst districts.”

School district officials did not return a request for comment. The East Ramapo School District has more than 32,000 students. Of these, some 24,000 attend private schools, mainly yeshivas. About 8,500 attend public schools and predominantly are African American or Latino.

As for next year’s fiscal stress scores for all the school districts, Butry says the comptroller has his eye on a particular issue.

“The comptroller is really looking at, as we move into next year, whether or not the tax cap, which is at its lower point ever for school districts for the upcoming fiscal year, for 2016-17, to see the impact of that and whether or not if forces more districts to spend down that fund balance, to rely on borrowing, and if the impact does push anybody else into fiscal stress next year,” Butry says. “So that’s something that we’ll be looking at as school districts are planning their budgets this year and when we release these scores next year.”

All told, 82 school districts in the state have been designated as fiscally stressed under the Fiscal Stress Monitoring System. The scores are based on the evaluation of 672 school districts with fiscal years ending June 30, 2015. Here's the comptroller's report.