Read more: State, Local, Education, Schools, Budget, Surplus, David, Paterson, New, York
SYRACUSE -- Are school districts sitting on surpluses? Action News has found many local school districts have millions of dollars "undesigated fund balances", but one school finance expert warns against dipping into them.
When Governor David Paterson defended his proposed three percent cut to education at a town hall meeting in Liverpool on Friday, he implied that school districts were sitting on surpluses. "95% of the school districts that we have cut have reserve funds that can cover these costs." Paterson told an audience at WCNY-TV's studios.
School districts are allowed to maintain undesignated fund balances of up to four percent of their total budgets.
According to data from the State Education Department's "Property Tax Report Card", the Baldwinsville School District has $3.7 million in its undesignated fund balance. Cortland's school district reports $1.6 million, and Fayetteville-Manlius has an undesignated fund balance of $2.9 million. Those are three examples. The average school district in New York has a $45.8 million budget and maintains a $1.6 million reserve fund.
To view the Property Tax Report Card in Excel format, click here.
"Technically, yes we can dip into those reserve funds." said Rick Timbs, executive director of the Statewide School Finance Consortium. But Timbs says the undesignated fund balances are for "paying bills." He says dipping into them could create a cash flow problem that may require school districts to borrow money, cut programs and personnel and could eventually lead to property tax hikes. Timbs warns that a three percent across the board cut will especially hurt poorer upstate districts which depend on state aid far more than richer downstate school districts.
"What we're finding is the districts that are hit most severely by these cuts, the ones who will suffer the most, lose programs, have to increase taxes the most are the lower wealth districts, mostly upstate New York," says Timbs.
Timbs is calling upon state lawmakers to keep upstate districts in mind when they spread the pain of cuts to education.
