Edge of a fiscal cliff: Is future of local education in danger?
To see original visit uticaod.com. Published in paper on Sunday, May 12, 2013.
BY KESHIA CLUKEY
Classrooms crowded with more than 30 students.
No electives or advanced placement classes.
No sports or music.
This is the future for some local schools if finances continue on their current trend — and it might happen sooner than later.
Schools across the state are struggling with significant rising costs, declining enrollment, the 2 percent property tax cap and insufficient state aid.
Year after year, they are forced to reach deeper into their reserves and make cuts to staff and programming.
“We’re going to fall behind other countries in terms of the quality of our education system and the graduates who can lead us into the next generation in terms of successful careers,” said Michael Borges, executive director of the New York State Association of School Business Officials. “We’re mortgaging our future to pay for our past mistakes.”
Schools across the state and region are headed toward educational insolvency. They essentially would go bankrupt — either running out of money or lacking the funds to meet legal requirements such as mandated programs — and jeopardize the districts’ and students’ futures.
“They’re running out of things to cut,” said Rick Timbs, executive director of the Statewide School Finance Consortium. “Instead of doing more with less, we’re really just doing less with less.”
What’s at stake?
Students graduating now will be at a disadvantage when it comes to colleges or the workplace, said Billy Easton, executive director of the Alliance for Quality Education, an advocacy group.
“Colleges look closely at the quality of the curriculum in high schools,” Easton said. “When they cut advanced placement, honors or electives, students are simply less competitive.”
Headed for trouble
Statewide, 77 percent of superintendents said they would be unable to fund all state and federal mandates in the next four years, while 18 percent said they would reach that point within two years, according to a November survey by the New York State Council of School Superintendents.
Though a district is not able to declare bankruptcy, it can seek special legislation to help it deal with a financial emergency or deficit, according to the state Education Department.
For the 2012-13 budget, the Utica City School District originally had 217 positions and some sports on the chopping block, along with cutting kindergarten to half day. Increases in aid kept programs safe for now, but staff cuts have continued.
During the past four years, the district has cut about 311 positions, 175 of them were teachers even as enrollment continues to rise due to a large refugee population. The district currently has 1,594 employees, 768 of whom are teachers.
For the 2013-14 budget, another 81 position cuts, 46 teaching, are proposed. As a result, class sizes could reach up to 34 students each next year.
The district also has been using its fund balance, appropriating $12.4 million over the last three years. With only about $875,000 left in reserves, the district doesn’t have a fallback.
Further staffing, kindergarten, sports and other non-mandated program cuts will be the last resort.
“Hopefully, we will not become insolvent,” said district Business Official Maureen Albanese. “If things did continue as bad as they were the last couple of years, we would definitely be headed for it.”
It’s much more expensive to recreate a program than to maintain it, Easton said.
But with an approximately $5.5 million budget for the 2013-14 school year, and only about 195 students, the Owen D. Young Central School District has to explore all options every year.
Merging with other districts would be difficult due to the district’s geographic remoteness, said Superintendent James Picolla.
This year it’s cutting French. As for advanced placement courses, they can’t afford to offer them.
But the district got creative when it comes to staffing. The business official, Committee on Special Education chairperson and even the superintendent are shared through the Herkimer-Fulton-Hamilton-Otsego BOCES.
Picolla works part-time as the BOCES Human Resources director, and earns an additional $55,000 a year as superintendent. The district’s savings went to reinstating the school principal position to full time to accommodate mandates such as the annual teacher reviews, he said.
Districts can avoid insolvency by sharing services or merging, but in the long run, experts say the only way is through state aid reform and mandate relief.
Olympia Sonnier, spokeswoman for Gov. Andrew Cuomo, said it’s clear that the state is showing unprecedented commitment to schools, providing more than $341 million in education funding to Oneida County next year — about $13 million more than this year.
“For decades, the Albany solution to education was to spend more and more money even though graduation rates remained abysmal,” Sonnier aid. “While overall aid has increased over the last two years, Gov. Cuomo also enacted reform that injects accountability and reduces costs and bureaucracy, and puts more funds into the classroom.”
As for Owen D. Young, if financial difficulties continue next year, the district will look at cutting core programming, Picolla said.
“If we have to make cuts, then we’d be offering a student not much more than the minimum requirements toward graduation.”
By the numbers
* School spending statewide is expected to increase 3.12 percent in the 2013-14 school year, if approved by voters May 21.
ä Unrestricted fund balances, which are used to plug holes in budgets to prevent further layoffs, declined an average 13.8 percent statewide last year. This year, they are expected to decline another 8 percent.
* 52 percent of superintendents statewide said their district's financial condition is worse or significantly worse than a year ago.
* 83 percent of superintendents statewide said they're concerned or very concerned about their district's reliance on reserves to fund recurring costs.
* 18 percent of superintendents statewide said that within two years their districts may become unable to fund all state and federal mandates. 77 percent foresee reaching that point within four years or beyond.
* 9 percent of superintendents statewide say within two years their districts may become unable to ensure some financial obligations. 41 percent foresees reaching that point within four years.
Source: New York State Association of School Business Officials, New York State Council of School Superintendents November survey
* Financial insolvency: Bankruptcy, or the inability to meet financial obligations.
* Educational insolvency: A school district's inability to meet legal or regulatory requirements and are therefore not in compliance with education law. It also can mean when districts meet all the rules but its students are not prepared for post-secondary education or to be career ready.
Signs leading up to insolvency
* Eliminating non-mandated programs, for example cutting electives, advanced placement courses, remedial services, extracurricular activities and cutting kindergarten or pre-kindergarten.
* Exhausting reserve funds.
* Borrowing money to meet their tax-flow needs.
A district isn't able to declare bankruptcy with the state, but many districts have sought and received special legislation to help them deal with a financial emergency or deficit, according to the state Department of Education. Legislation includes:
* After certification by the state Comptroller, the district would be allowed to bond out the deficit over a 10-year-period.
* The state advances funding such as lottery funds. Funds are recouped over a period of years.
* Bailout with a grant or loan.
* The state appoints a control board which has oversight of district finances.
* Sending students to other districts willing to receive them.
Source: New York State Department of Education