continued The report stated that school districts found to be in fiscal stress share a number of common characteristics. Most are operating with low fund balance, operating deficits and limited cash on hand. These districts were also found to have a much higher likelihood of using short-term borrowing to bridge cash flow gaps.
The report also found that the percentage of school districts in fiscal stress exceeded 30 percent in six counties, one of which was Madison. The other counties included Chemung, Clinton, Montgomery, Niagara and Tioga.
“School districts are a critical barometer to the fiscal health of our local communities,” DiNapoli said. “Unfortunately, reductions in state aid, a cap on local revenue and decreased rainy day funds are creating financial challenges that more and more school districts are having trouble overcoming. My office’s fiscal stress scores highlight the need for school district officials to manage their finances carefully with an eye towards long-range planning and how they can operate more efficiently.”
Cazenovia has been aware of its declining financial situation for many years. Last year, the preliminary 2013-14 district budget included an initial projected budget deficit of $650,000 with a nearly 5 percent tax levy increase and the elimination of five or more staff positions in the middle and high schools. The reasons for the bleak proposal were cited as cuts in state aid, increases in employee entitlement costs and a steady drop in enrollment.
The “root of all evil” for Cazenovia — and all state school districts — has been the state’s Gap Elimination Adjustment (GEA), which has cut $5.3 million in state aid from Cazenovia during the past five years, said Assistant Superintendent Bill Furlong. “We’ve been using reserves to partially offset that loss of aid; that’s pretty much why we ended up on the list,” he said. So the comptroller’s report, “wasn’t really a surprise to us,” he said.