School Districts Face Falling Off Stimulus ‘Cliff’

New York State’s Comptroller says school districts that got billions of dollars in federal stimulus funds may fall off a financial cliff when those funds run out.

Thomas DiNapoli analyzed stimulus funds sent to each of the nearly 700 school districts in New York State.  The funds were used mostly to offset, dollar for dollar, money taken away by the state.  Stimulus funds could be used only to preserve or add jobs.

The Fulton City School District, for example, said recently that stimulus funds saved or created 61 jobs this year.

But what happens when the stimulus money runs out after next school year?  That’s what DiNapoli’s worried about. “That money stops in 2011-12, and when it does, New York’s schools face a $2 billion funding gap. That’s a big hole to fill,” he said in a news release. “The time to start thinking about how to fill that hole is now, not when the money is already gone. It won’t be easy; schools are already facing financial problems. But this won’t just go away.”

The problem may be more acute for some districts than others.  DiNapoli’s numbers show that every school district in the county got a greater share of stimulus funds than the average for schools statewide, minus the five big-city school districts.

Two districts, Fulton and Phoenix, ranked 16th and 20th out of 676 districts in the percentage of their budgets provided by stimulus money.  6.7% of Fulton’s $58 million budget came from stimulus funds, while Phoenix’s $40 million budget received 6.6% of its revenues from the stimulus. (See the table below for your school district’s numbers.)

DiNapoli warned that the state will likely increase foundation aid — the broadest category of aid school district’s receive — by 17% through 2013.  But the loss of stimulus money means the districts will need a 31% increase through 2013 to stay level.

The loss of stimulus aid will compound another financial problem f or districts — the sharp rise in their required contributions to state teacher and staff retirements.  Some districts are already planning to pull money from their reserves to help pay that high bill.  And salaries go up every year under union contracts.  The stimulus loss, if not made up in state aid, will only make the problem worse.

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1 Comment

  1. What aboout closing one of the elementary schools??? Don’t they already have several classes and grade levels moved to other schools in the districts. With declining enrollment and increasing costs that i would think would be the first step unfortunately. Save on maintaining a building that they may not be using in the not too distant future anyway. Perhaps a potential buyer could be found to convert the building before they start the next capital project and save even more money. If space were to be an issue maybe they could take whatever monies were going to be put into the one building that they try to sell and add classrooms to the other 3 schools. Just a thought i know not a very popular one but sometimes it is not popular to try to save some cash. Other potential saving may be had as well from this move.

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