The Road Ahead: School District Insolvency

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ALBANY, NY (01/28/2014)(readMedia)-- The New York State Association of School Business Officials (NYSASBO) released a study entitled "The Road Ahead: School District Insolvency".

"New York State school districts have lost ten percent of their professional staff since the start of the Great Recession, and more than a third of school districts have experienced declining fund balances," said Michael Borges, NYSASBO Executive Director. "School districts cannot experience this level of losses without it adversely impacting their ability to prepare students to be college and career ready," continued Mr. Borges.

The study examined recent data on 671 New York State school districts excluding the Big 5 city school districts and found:

• Examining losses between school years 2010-11 to 2012-13:

o 261 school districts showed signs of fiscal insolvency through a reduction in Unassigned Fund Balance (savings) from school year 2010-11 to 2012-13,

o 544 school districts showed signs of educational insolvency as a result of reduced professional staff, and

o 206 school districts showed signs of both fiscal and educational insolvency.

• Statewide school districts lost 21,112 professional staff over this same in the three-years ending in 2012-13.

• High need urban/suburban school districts and average need school districts lost the most fund balance.

• High need urban/suburban school districts had one-third the fund balance per pupil as low need school districts.

• School districts are balancing their budgets at the cost of educational programs, as evidenced by cuts in professional staff. School districts have reduced staff ten percent over the past five years, while enrollment has declined three percent.

NYSASBO recommends a combination of $2.6 billion worth of additional state aid and mandate relief as well as increased accountability through required five-year financial plans for all school districts, available to the public on the district's website.

The full study can be found at