Four in 10 school districts face fiscal or educational insolvency if state aid cuts persist in 2020-21 and beyond

More than 60% of districts expect staffing reductions in 2020-21 alone

FOR RELEASE: October 1, 2020

Results based on survey of school business officials, highlighted in new report released today

New York’s public schools are facing a threat of irreparable harm from the one-two punch of sharp cuts in state aid and costly operations during a pandemic, according to a report entitled "A Lost Generation" released today by the New York State School Boards Association (NYSSBA) and the Association of School Business Officials of New York (ASBO).

The report, based on a survey of school business officials, reveals that multi-year state aid reductions would leave nearly four in 10 school districts either financially insolvent or unable to provide a sound, basic education to their students.

Specifically, 25% of all school districts responding to the survey would be unable to pay their bills, including payroll, if the state cuts public education funding by 20% this year and state aid cuts continue for the next two to three years. Another 13% of school districts would become educationally insolvent, meaning they would be unable to provide legally required educational programs. In the nearer term, 64% of districts would need to make non-instructional staffing reductions in 2020-21, while 60% would need to make cuts to instructional staff.

"The consequences of a three-year period of sustained education cuts are potentially catastrophic for public education in New York," said NYSSBA Executive Director Robert Schneider. "Federal stimulus funds would help stave off painful cuts, but lawmakers in Washington have yet to provide additional education funding despite the crying need – and there is no telling how many young people will miss out on their constitutional right to a sound public education and on the opportunities to build meaningful lives and careers as adults."

"Public schools stand at the brink of a fiscal cliff. Federal action is critically needed to prevent significant mid-year cuts that would devastate public education for a generation. This is the most important moment for educational equity since the creation of Foundation Aid," said Andrew Van Alstyne, director of education and research for ASBO New York.

If districts ultimately receive just 80 cents for every state aid dollar they built into their budgets for this 2020-21 school year, a large majority of business officials (79%) said their districts would dig deeper into fund balances to help cover their costs. Additional use of district reserves and reduction of sports or other extra-curricular activities are other strategies cited by a majority of business officials. 

COVID-19 Costs

While state revenue declines have resulted in the withholding of state aid for the first two months of the fiscal year, New York school districts have incurred an average of $500,000 to cover costs related to COVID-19 in order to open schools this semester – for either in-person or remote instruction, according to the report.

Already this year, districts reported spending an average of $219 more per student for expenses directly related to the COVID-19 epidemic, such as masks and other personal protective equipment, cleaning supplies and computers or other digital technology.

The strategies most commonly cited by business officials to cover these expenses were shifting money from other areas of the budget and digging deeper into their fund balances (both were cited by 71% of respondents). NYSSBA and ASBO analysts noted that the shifting of funds to cover extra re-opening costs means this funding is not available to spend on other important activities — such as instruction.

The survey of business officials in 680 school districts and BOCES was conducted between August 28 and September 8, 2020. A total of 181 responses were received, a rate of 27%.

To access the report, click here.

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