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NY comptroller: 6 LI school districts face degrees of financial risk

The state comptroller's office has identified six Long Island school districts that face varying degrees of financial risk. On Wednesday, Hempstead school district interim superintendent Regina Armstrong spoke about it. Credit: Newsday / Raychel Brightman

At a time of "unprecedented uncertainty," the state comptroller's office has identified six Long Island school districts among 31 statewide that face varying degrees of financial risk.

The Hempstead and Wantagh districts showed moderate fiscal stress, based on data from the 2019-20 school year, the watchdog agency said. The two systems were given the same ratings in 2018-19.

Four other districts on the Island — Elmont, Mattituck-Cutchogue, New Suffolk and Wyandanch — were characterized as "susceptible" to fiscal stress, a milder rating.

The comptroller's office uses three designations — significant stress, moderate stress and susceptible to stress — as part of its annual system of evaluating districts' economic condition. "Significant stress" is the most serious description applied to systems in a season when they are starting to put together budget proposals for 2021-22.

Annual budget voting this year is scheduled for May 18.

"This is a time of unprecedented uncertainty as the COVID-19 pandemic continues to disrupt school district operations and finances," state Comptroller Thomas DiNapoli said. "I urge school district leaders to closely monitor their financial conditions, even if their fiscal stress scores were low in the early days of the crisis."

Comptroller's ratings are based on a combination of strictly financial criteria, such as the strength of district reserves funds, as well as factors beyond a district's control such as the number of low-income families served in the community.

The past year was chaotic in terms of school reopenings and closings, as districts responded to spikes in coronavirus rates. In a financial sense, however, the number of districts tagged as facing risks is actually down slightly from 2018-19, when eight systems on the Island were among a total of 33 statewide identified.

No districts in the Nassau-Suffolk region were rated in the comptroller's latest report as showing signs of "significant" fiscal stress. The only districts so designated were Mount Vernon in Westchester County and Northern Adirondack, near Plattsburgh.

Both Hempstead and Wyandanch had been identified as significantly stressed as recently as the 2015-16 school year. The comptroller's most recent report, released late Monday, covers a total of 668 districts statewide.

In Hempstead, administrators said so many students have left traditional schools for independently run charter academies that the district now must pay out more than $55 million annually in tuition. Under state law, charter schools operate on fees collected from the home districts of students they enroll.

Despite its economic struggles, the Hempstead district has managed to show progress in some areas. Two weeks ago, the state confirmed that the district's graduation rate rose to 78.3% in 2020 — results that local educators said were up 34 points since 2017.

On Tuesday, Hempstead's interim superintendent, Regina Armstrong, issued a statement contending that without extra state funding, the district "will not be able to sustain both the fiscal and academic gains made over the past three years."

In Wantagh, Superintendent John McNamara released a letter Tuesday to the local community, saying the district improved its fiscal stress score somewhat from the past year, but not enough to move to an improved rating category.

McNamara added that the district held tax collections relatively low in 2015-16, then lowered taxes in 2016-17 as it dealt with various pressures. These included the state's cap on taxation, rising labor costs and aging school facilities, along with the extra expenses of protecting students and staff from health hazards, the superintendent said.

"Our long-range financial plans are designed to meet the needs of the community while continuing to provide well-rounded educational opportunities for our students," McNamara wrote.

Jill Gierasch, superintendent in Mattituck-Cutchogue, said her system's rating was affected, in part, by property taxes not collected within 60 days after the end of the fiscal year. She added, however, that those taxes were later collected and recorded. District borrowing was another factor, but Gierasch said that was done "as a result of careful analysis of the district's cash-flow position."

Elmont's "susceptible" rating is accurate, according to Superintendent Kenneth Rosner, who cites the general economic downturn as an underlying cause. In a statement issued Wednesday, he added that the district has reduced taxes nearly 1% "while delivering excellent education for the children of Elmont."

Wyandanch's school chief, Gina Talbert, noted Wednesday that her district has dramatically expanded its reserve funds, in part through streamlined business practices. She added that Wyandanch would continue building upon that progress as part of a five-year fiscal plan.

New Suffolk school administrators did not respond to Newsday's phone inquiries.

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