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State: Cortland is fiscally stressed

Bob Ellis/staff photographer

Cortland Junior/Senior High School is pictured here Wednesday. The Cortland school district is listed as fiscally stressed, according to the state comptroller in a recent report.

The Cortland School District has received the mark of fiscal stress, while the DeRuyter School District received the classification of being susceptible to fiscal stress, according to a recent report by the state comptroller.

The Cortland School District is one of nine school districts to be listed as a moderate fiscally stressed district, and the only in Cortland County to make the list.

Cortland Superintendent of Schools Michael Hoose said the designation is due to declining enrollment and money lost from the state’s gap elimination adjustment, implemented in 2010. He said those are problems many small city school districts face.

The gap elimination adjustment has been the biggest hindrance to the district as it took $7 million from the Cortland School District, according to Hoose.

“It drew down revenues,” he said.

The gap elimination adjustment policy, first implemented by former Gov. David Patterson, allowed the state to use aid once promised to schools to pay down the state’s own debt.

Since the state did away with the policy a couple years ago, districts have been struggling to recover, as the state aid increases barely covers the district’s health care costs, if at all.

In an attempt to work its way out of being fiscally stressed, Hoose said the school district is making cuts wherever it can while trying not to affect the students and the taxpayers.

“The board doesn’t want to tax its way out of the problem,” he said. “Unless something changes, small city school districts will continue to be fiscally stressed.”
DeRuyter School District’s listing as being susceptible to fiscal stress this year is an improvement from last year, when it was categorized as moderately fiscally stressed.

James Southard, business administrator for DeRuyter, said that is due to the district balancing its budget. He also said that if no big changes arise that would affect the district’s spending, the district will end the 2016-17 year with no fiscal stress.

The Cincinnatus, Dryden, Groton, Homer, Marathon, McGraw and Moravia school districts were all listed as having no designation, which means they are below the levels to be listed at risk of fiscal stress or having it.

The percentages among this group ranged from 6.7 percent to 10 percent, well below the 45 percent needed to be considered fiscally stressed. Out of that group, Groton and McGraw were the only two listed as having 0 percent fiscal stress.

This is the fourth year of the Fiscal Stress Monitoring System, created by state Comptroller Thomas DiNapoli, meant to be an early warning system for communities and school districts with financial problems.

The marks put Cortland among 59 districts out of 671 evaluated, to be designated as fiscally stressed.

This is actually a drop from last year when 82 districts were found to be fiscally stressed and 90 the prior year.

The evaluation is based on the 2015-16 school year, ending in June 30.

Using financial indicators that include year-end fund balance, short-term borrowing and patterns of operating deficits, the monitoring system creates an overall fiscal stress score, which classifies the district’s fiscal stress level — significant or moderate. The districts can also be classified as either being susceptible to fiscal stress or have no designation — meaning the district is well below an alarming stress level.

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