Twenty-two school districts were designated in some level of fiscal stress under New York State Comptroller Thomas P. DiNapoli’s Fiscal Stress Monitoring System for the school year (SY) ending June 30, 2024, up from 16 districts in fiscal stress the prior year. The low number of districts with stress designations largely reflects recent increases in state and federal aid.
“Pandemic-related federal funding as well as a boost in
state aid have helped school districts avoid a fiscal stress designation in
recent years,” DiNapoli said. “While the number of districts has
increased, it remains lower than before the pandemic. Now that most relief aid
has been spent, districts should be especially vigilant that their budgets are
structurally balanced to avoid fiscal problems going forward.”
State and federal aid grew 42% from SY 2019-20 to SY
2023-24, increasing $6.5 billion from $15.6 billion to $22.1 billion (and
accounting for 44.6% of total revenues). A significant portion of the federal
aid school districts received in these years consisted of pandemic-related
funding from the federal government.
Of the 670 school districts that filed their financial
reports in time to be scored in SY 2024, 3.3% have been designated as being in
a level of fiscal stress.
DiNapoli’s Fiscal Stress Monitoring System was designed to
identify those school districts, counties, cities, towns and villages that are
having difficulties with budgetary solvency, or the ability to generate enough
revenue to meet expenses. School districts receive a fiscal stress score that
is 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, designated two school districts in “significant fiscal stress,” the highest category – New Suffolk Common School District (CSD) in Suffolk County and Mount Vernon School District (SD) in Westchester County. Four districts were designated as being in “moderate fiscal stress” and 16 districts were designated as “susceptible to fiscal stress.”
In addition, DiNapoli’s report found 22 districts to be
chronically stressed, having been designated in a category of stress for five
or more years since SY 2013, with three of these districts designated in SY
2023-24 (New Suffolk CSD, Harrisville CSD, and Mount Vernon SD). Four school
districts (East Ramapo CSD, New Suffolk CSD, Rensselaer City SD and Wyandanch
Union Free SD) have been in fiscal stress for eight of the twelve years that
districts have been scored.
As federal aid returns to pre-pandemic levels, DiNapoli
cautioned school officials to prepare for potential changes in federal and
state aid, and urged district officials to use the resources available to them,
including the Comptroller’s self-assessment tool and financial toolkit, which offers guidance,
resources, training and reports, to help manage through complex fiscal
circumstances.
Lists
School Districts in Stress for Fiscal Year Ending 2024
Complete List of School District Fiscal Stress Scores
Report
Fiscal Stress Monitoring System Municipalities: School
Districts Fiscal Year 2023-24 Results
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