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State report highlights fiscal strain on LI schools

Classrooms across Long Island were empty on Thursday.

Classrooms across Long Island were empty on Thursday. Check our listings of delayed openings, closures and cancellations to see what's in store for Friday. Credit: Daniel Brennan

Two Long Island school districts -- Bay Shore and Sachem -- are among a statewide group grappling with significant financial pressures, the state comptroller's office reported Thursday.

The first-ever report by the agency identifies an additional 14 districts across Nassau and Suffolk counties that face greater-than-average fiscal challenges.

Ratings were based on a variety of fiscal indicators, including dwindling reserve funds, operating deficits and short-term debt.

Those on the Island named in Comptroller Thomas DiNapoli's report range from Manhasset, one of the wealthiest districts in Nassau County, to Wyandanch, located in southwest Suffolk and one of the region's poorest.

Statewide, the report lists 87 districts, out of a total of 674 evaluated, as facing larger-than-average problems. The Island has 124 districts.

"School districts are a critical barometer to the fiscal health of our local communities," said DiNapoli, a Great Neck resident. "We certainly hope this will inform the debate on school aid."

The ratings come just before the start of the annual tug-of-war between the executive and legislative branches over how to distribute more than $20 billion in school aid statewide. Gov. Andrew M. Cuomo plans to release his budget, including proposed school-aid distribution, on Tuesday.

With state elections in November, political leaders have signaled that substantial financial help for the 2014-15 school year is a near-certainty. One open question is how much of the money will be spread evenly to districts, and how much targeted for those with special needs, such as compensating for a lack of taxable commercial property or providing help for impoverished students.

Karen Salmon, Bay Shore's superintendent, expressed hope that the governor and lawmakers would approve aid-formula changes to make up for aid lost by her district and others in years past.

The comptroller's report identifies districts facing financial problems by using a 100-point scale.

Districts accumulating 65 points or more are in a category of "significant" fiscal stress. Those between 45 to 64 points are in the "moderate stress" category, and those between 25 to 44 points are considered "susceptible to fiscal stress."

Several school superintendents in the identified districts Thursday applauded the report, saying it could help correct a stereotypical impression that the Island's communities are uniformly wealthy.

"Once you go off the Island, the impression is that we have a lot of money -- and we don't," said Edward Fale, the schools chief in Valley Stream District No. 24.

Fale said his district -- included in the "moderate stress" category with six other Island systems -- was short of reserve funds because it has spent reserves in past years to keep tax increases low. One result, he said, is that class sizes in kindergarten through second grade are creeping up.

School leaders in Sachem and East Quogue said their districts also had depleted reserves in an effort to hold down tax increases, forcing staff layoffs.

Like many colleagues, Les Black, the East Quogue schools chief, cited state caps on property taxes as a driving force behind efforts to economize.

"It's killing us," Black said. His district also is in the "moderate stress" category.

DiNapoli noted that many factors behind districts' financial troubles are beyond their control -- families in poverty, for example. The comptroller also acknowledged that local school officials, in some instances, may have made spending decisions that contributed to their districts' financial distress.

Upstate districts were somewhat more likely to face fiscal troubles than those downstate, the comptroller's office found.

Taxpayer representatives in some districts questioned the new report's ratings. Laura Pandelakis, a Manhasset resident who is active in Long Islanders for Educational Reform, a taxpayer group, described as "curious" her district's inclusion on the statewide list.

Manhasset school officials did not return a call seeking comment.

"Well, if districts don't want to be under fiscal stress, then they just have to spend what people can afford," said Andrea Vecchio, who lives in East Islip and also participates in the grassroots reform group.

East Islip's school superintendent, Linda Rozzi, said that a big financial problem for her district, as for many on the Island, is a lack of taxable commercial property. Her district is included in the "moderate stress" category.

"We are surrounded by untaxed parkland, and our state aid does not reflect this reality," Rozzi said.

Cuomo has forecast school aid increases of about 5 percent statewide, or roughly $1 billion, coupled with property tax relief. Meanwhile, 83 state senators and Assembly representatives led by senior Democrats have called for a statewide school-aid hike of $1.9 billion.


School district financial indicators

The state comptroller's office identifies districts in fiscal distress based on seven factors, drawn from annual district spending reports. Those include:

Unassigned fund balance -- identifies reserves available to cushion revenue shortfalls or spending overruns.

Total fund balance -- identifies the unassigned balance, plus other reserves available for specific purposes in the future or to help pay current costs.

Operating deficit -- identifies annual deficits between spending and revenues.

Cash ratio -- identifies a district's ability to liquidate current liabilities.

Cash percentage of monthly expenditures -- identifies ability to fund the ensuing fiscal year's operations from available cash.

Short-term debt issuance -- identifies amount of

short-term debt issued to meet financial obligations.

Short-term debt issuance trend -- identifies upward or downward trends in such debt.


Here are Long Island's identified districts, divided in three categories, using a 100-point scale. They are listed in order of ranking, from greatest stress to least.

Significant fiscal stress (65 to 100 points) -- Bay Shore, Sachem

Moderate fiscal stress (45 to 64 points) -- Lawrence, Copiague, West Islip, East Quogue, East Islip, East Moriches, Valley Stream District No. 24

Susceptible to fiscal stress (25 to 44 points) -- Seaford, Manhasset, Wyandanch, Kings Park, Northport-East Northport, Eastport-South Manor, Southold.

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