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December 1, 2012

Area school officials say insolvency is in sight

Area superintendents agree with the results of a recent survey that warned of financial and educational threats challenging state schools.

The report by the New York State Council of School Superintendents found that financial insolvency is on the horizon within two years for 9 percent of state districts. 

Eighteen percent said that within two years, their districts may become educationally insolvent, unable to fund all state and federal mandates for instruction and student services. 

The situation has been developing for at least three years, Unatego Central School Superintendent Charles Molloy said.

“The state has been balancing its budget on the back of school districts,” he said.

The $500,000 cash reserve, or fund balance, that the school had left after dealing with last year’s state aid cut of more than $1 million is not enough to meet the districts future needs, he said.

“We probably have enough left to put together one more budget,” he added. But unless something changes, “I see insolvency.”

For the 2012-13 budget, the district had to take drastic measures to deal with the state aid reduction that included a gap elimination cut of $1 million. Besides dipping into the fund balance, the district cut five teachers and eight teachers’ aides, as well as reorganizing the two elementary schools. 

Molloy previously said if the district faced a similar aid cut this year it would have no choice but to close Otego Elementary and cut unmandated programs, but that wouldn’t be enough. 

The state has already informed the district that it faces a $700,000 increase alone in mandated Teachers Retirement Service payments.

“We have to get rid of the gap elimination adjustment,” he said. “I can’t in good conscience cut programs that encourage kids to stay in school,” he said. 

At Franklin Central School, Superintendent Gordon Daniels said the formula the state uses to distribute aid is unfair to poor rural schools. For instance, with a student population of about 295, the district lost $2,800 per student during the last two years. A similar school on Long Island lost $750 per student, he said. 

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