16 School Districts in NY are Stressed Out

Sixteen school districts were designated to be in some level of fiscal stress according to New York State Comptroller Thomas DiNapoli’s Fiscal Stress Monitoring System for the school year (SY) ending June 30, 2023, up from 14 districts in fiscal stress the prior year. This number is well below the 33 designated in stress in 2019. Increased temporary federal aid and growth in state aid have contributed to the declining number of school districts designated in fiscal stress.

“The number of districts designated in fiscal stress remains low after significant increases to both federal and state aid over the past few years,” DiNapoli said. “Although federal relief packages and state aid provided much needed assistance, school officials should remain diligent and closely monitor their financial condition in the current and future budget cycles as one-time federal funds are depleted and state aid is uncertain.”

In response to the COVID-19 pandemic, the federal government passed three major multiyear grants of aid and New York State provided a substantial increase in ongoing state aid in SY 2022-23 and committed to fully funding Foundation Aid for school districts by SY 2023-24. Total state aid reported by school districts (excluding New York City and the Big Four) increased from $15.1 billion in SY 2021-22, to $16.7 billion in 2022-23, an increase of $1.6 billion, or 10.1%.

DiNapoli’s Fiscal Stress Monitoring System was designed to identify issues that school districts, counties, cities, towns and villages are having with budgetary solvency, or the ability to generate enough revenue to meet expenses. School districts are given a fiscal stress score based on several factors: year-end fund balance, operating deficits and surpluses, cash position, and reliance on short-term debt for cashflow. The higher the score, the more severe the level of stress.

This release of scores, which excludes New York City and the “Big Four” City School Districts of Buffalo, Rochester, Syracuse and Yonkers, found three school districts in “significant fiscal stress,” the highest category – Amityville Union Free School District, New Suffolk Common School District, both in Suffolk County, and Mount Vernon School District in Westchester County. One district, Berne-Knox-Westerlo Central School District in Albany County, was designated as being in “moderate fiscal stress.” Twelve districts were designated as “susceptible to fiscal stress.”

Comptroller DiNapoli’s report also found that twenty-two districts are considered to be chronically stressed, having been designated in a category of stress for five or more years since SY 2013. Only four of these school districts were designated in fiscal stress for SY 2023.