(Rochester, N.Y.) – West Irondequoit Superintendent Jeff Crane isn’t planning any layoffs or program cuts next school year, despite a $1.7 million cut in state aid.
How is that possible? One reason is the use of reserve funds.
“Schools do have reserves and this is precisely why,” Crane said.
Governor David Paterson proposed cutting a total of $43.6 million to Monroe County’s 17 suburban school districts. The New York State Education Department’s School Property Tax Report Card indicates these districts have a combined $258 million in reserve funds.
“School districts have a lot of money in their reserve funds,” said Bob Herloski, a Webster resident and school budget watchdog. He has called for more transparency in how districts fund reserve accounts. “Right now taxpayers, voters don't have that choice. Districts can (fund reserves) after the budget process, during the summer, when no one is looking.”
State Comptroller Thomas DiNapoli criticized school districts statewide for putting too much money into special reserve accounts. Districts are forbidden to tap some of those accounts, such as those designated for retirements, later on.
“We're not saying reserves are bad. They're good. But if they're over-funded beyond what the money is intended to be used for, the money then just sits there,” said DiNapoli. “In some districts to have a situation where reserves are over-funded and taxes are going up. I don’t think that was a prudent management of taxpayer resources.”
DiNapoli and school superintendents are lobbying the governor and state lawmakers to ease restrictions on some reserve accounts.
Not all reserve accounts are off-limits, however. Every suburban school district in Monroe County has an undesignated reserve fund, also called “rainy day fund.” Districts are allowed to put up to 4 percent of their budgets into a rainy day fund.
Monroe County’s suburban districts have a combined $50 million in their rainy day funds.
The New York State School Boards Association said some districts are in worse shape than others. Data provided by the group shows that six Monroe County districts do not have enough in their rainy day funds to cover the proposed cut in state aid. Those districts are Greece, East Irondequoit, Hilton, Brockport, Churchville-Chili, and Wheatland-Chili.
School districts are quick to point out that it’s not a wise business practice to drain their reserve accounts.
“They're very aware that if they used all the money at once, they would be in a terrible position, unable to cope with (an emergency) and unable to pay for it,” said Jody Siegle of the Monroe County School Boards Association.
Siegle added that the state budget problems won’t go away anytime soon. “Obviously right now it’s raining and it’s raining very hard, but as we’re looking at the weather report for the economic future of the state, it’s going to keep raining next year, and the year after and the year after.”
West Irondequoit is clearly in a better position than some other districts. The superintendent credits that to planning and voter approval of the district’s budget strategies.
The district plans to take $3 million from various reserve funds to balance next school year’s budget. The district also plans $350,000 in budget cuts away from the classroom.
Predicting even harder times ahead, the district is planning on a full rainy day fund next school year- 4 percent of its budget.
.
“We believe with careful use of our reserves, with a low tax levy increase - and I'm talking under 2 percent - which is what we've averaged over the last 6 years - that we can get past this bad economy with minimal personnel and program cuts,” Crane said.
