The Albany City School District laid off over 200 teachers, administrators, and staff last month in the face of on-going budget cuts. It's the same in Schenectady, where the Schenectady City Schools laid off more than 400 staffers, including 10 percent of the district’s teachers and social workers. 

What You Need To Know

  • New York State has a current year budget gap of $14.5 billion, increasing to over $62 billion over four years
  • new report shows that if the state continues to withhold a portion of state aid payments, four in 10 school districts would likely declare either financial or educational insolvency
  • Schools have been dealt a double-whammy of additional costs related to the COVID-19 pandemic while state revenue declines have raised the specter of mid-year school aid cuts for the first time since 1990-91

According to a report released jointly last week by the New York State School Boards Association and the Association of School Business Officials, if the state continues to withhold 20 percent of payments to districts over multiple years, nearly four in 10 school districts would become either financially insolvent or unable to provide a sound, basic education.

"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."

What’s especially difficult to swallow, according to Andrew Van Alstyne, director of Education and Research with ASBO-NY, is that the districts that get the most state aid are the ones that will be hurt the most — districts like Schenectady and Albany.

“By definition, those districts have either a higher level of student need, so it takes more resources to educate their students. They have traumas associated with poverty, the challenges of English language learners, or lower fiscal capacity, so income and property values are much lower in those communities, and they often intersect,” said Van Alstyne.  “And we see that in Schenectady and Albany. Those are districts that have made prudent choices because if you face a mid-year cut, the further into the year you are when you make it, the deeper the cut has to be.”

If a district faces a mid-year cut, the further into the year the cut is made, the deeper it has to be.  In other words, if a district waited until January to make a budget cut, Van Alstyne said they’d have to cut twice as much. 

That seems runs counter to the advice given by budget director Robert Mujica last month in an op-ed penned for the Albany Times Union in which he stated that districts beginning to lay off staff were “acting prematurely.”

When asked about Mujica’s comments, Van Alstyne said, “But he also gave no assurances that the 20 percent cuts wouldn’t be permanent. The only thing that we know for sure is that the September payments went through. There was no confirmation that future payments wouldn’t be impacted.”

The Cuomo administration did not take 20 percent out of the September payment to districts, but that payment was never going to provide districts with cash flow because it’s earmarked for the Teacher Retirement System (TRS) — the payment into the pension system.

General aid, which includes Foundation Aid, begins in the fall and continues through the balance of the school year. This is the aid that the Cuomo administration may continue to cut.   

“We don’t know the full ramifications of it because there haven’t been districts that have basically ceased operations before,” said Van Alstyne of districts that fall into financial insolvency.

The state has stepped in in cases of financial distress, most notably in Rochester, East Ramapo, and Roosevelt.

“The state has had various responses, but they’ve never responded to fiscal insolvency on this scale that could potentially exist if there are multi-year cuts,” said Van Alstyne. “Federal action could stave off this nightmare scenario.”