Eighty-one percent of school districts that responded to a New York Association of School Business Officials survey said they would exhaust or spend down their reserve fund balances within five years if the tax cap and limitations on state aid continue, the group said today. Thirty-one percent of respondents said they would be in that position within the next 18 months. This could lead to insolvency for many districts, Michael Borges, executive director of the group, said in a statment.
These are some of the other findings:
—99 percent of districts used reserve funds to plug holes in their budgets.
—Fifty-six percent of districts said at least 10 percent of their 2012-13 operating budgets was taken from reserve funds.
Of the roughly 700 school districts in the state, 250 responded to the survey on fund balances.
“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,” Borges 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.”
In addition to increasing school aid, the Association of School Business Officials recommends state action to reduce the number of mandates on districts, such as:
—Reducing the need for annual internal audits.
—Bringing state standards for special education in line with federal standards. New York’s standards are tougher than federal ones.
—Requiring minimum health-insurance contribution rates from employees.
—Implementing and expanding workers compensation reforms enacted in 2007.