As many as 74 percent of school districts outside New York City appear to have enough funds in reserve to pay for the historic aid cuts proposed by Gov. Andrew Cuomo, a state Education Department report indicates.
The study, vigorously disputed by groups protecting school aid, finds most districts have enough money listed as unallocated reserves and leftover funds from federal stimulus grants to pay for the 7.3 percent cut. Cuomo proposes to cut about $1.5 billion from the state's annual school aid of about $21 billion, among the highest per capita school aid in the nation.
The report obtained by The Associated Press shows the school districts outside New York City have about $1.16 billion in reserves and $355.2 million left in federal stimulus money, which was distributed a year ago to stave off teacher layoffs.
"As the governor has said, the state cannot continue to dramatically increase spending year after year, so schools are going to have to do more with less," said Cuomo spokesman Josh Vlasto. "However, the cuts proposed by the governor should by no means require significant layoffs or program cuts for our students."
But school aid advocates say Cuomo's cut will force thousands of teacher layoffs and larger class sizes, and will force local property tax increases to make up for the lost state support.
The Statewide School Finance Consortium, a project of the Central New York School Boards Association, released its own report this week that found hundreds of school districts would run out of money sometime next year if the Legislature approves Cuomo's cuts.
The fiscal crises would be worst at schools in low-income communities that derive little revenue from property taxes and rely more heavily on state and federal aid, according to the group.
"Some will simply be unable to continue to meet the minimal state and federal requirements for even a basic educational program," said Rick Timbs of the Statewide School Finance Consortium.
Cuomo, however, has said the cut in a budget that had to address a $10 billion deficit should prompt public schools to cut waste and inefficiencies.
The school boards' project shows many schools would run out of money sometime in the 2011-12 school year, a situation addressed in past years by increasing local school property taxes or borrowing. But Cuomo's high priority of capping local property tax growth at 2 percent or less is also gaining support in Albany and could be enacted this year.
That could limit how much a district could raise taxes to compensate for the loss of state aid and could also limit its borrowing ability, according to the school boards' group.
Cuomo's tax cap, if approved by the Legislature, wouldn't take effect until the 2012-13 school year. Cuomo also includes a provision that local voters could suspend the cap with a vote of 60 percent or greater.
The state report, however, also shows concerns. For example, five out of seven school districts in Cattaraugus County don't have enough in reserve to cover proposed cuts while even suburban Monroe County would see about 40 percent of its districts come up short when trying to use reserves to pay for cuts.
Other counties such as Sullivan County would see all of their districts able to apply reserves to fully cover cuts and almost all wealthy Westchester County school districts would have enough cash to cover the cuts, according to the report.
According to the state report, Cuomo's home district in Westchester would have enough reserves to cover its cuts as would the Rockville Centre district on Long Island that is home to Senate Majority Leader Dean Skelos. Assembly Speaker Sheldon Silver lives in lower Manhattan, but New York City's data on whether its reserves could handle the cuts wasn't included in the report because the district uses measures different from other districts.
New York City Mayor Michael Bloomberg said this week that Cuomo's budget cuts could significantly increase teacher layoffs already projected to be necessary unless the state allows the city flexibility to save money elsewhere. Bloomberg already estimates about 6,000 teacher jobs will have to be cut, about 4,300 by layoff because of the city's budget constraints. Bloomberg will present his budget Feb. 17.
Cuomo's budget office, however, estimates the city school district has $2 billion in reserves.