Tupper schools on NY ‘stressed’ list

TUPPER LAKE – A report released Thursday by the New York State Comptroller’s office says the Tupper Lake Central School District is under “significant financial stress.”

Tupper Lake, which ranked number 12 on the list, isn’t alone. According to the “Fiscal Stress Monitoring System” report, 12 school districts in the state have been classified as in “significant fiscal stress,” 23 in “moderate fiscal stress” and 52 as “susceptible to fiscal stress.”

The study used financial indicators that include year-end fund balance, cash position and patterns of operating deficits to establish an overall fiscal stress score to classify a district’s designation. Tupper Lake received a score of 65 percent, which tied it with the Utica City School District and Schenectady City School District.

A press release from the Comptroller’s office said separate environmental indicators were also used to help provide insight into the health of the local economy and other challenges that might affect a school district’s finances. Those included student enrollment, property value, budget vote results and poverty levels.

The 87 schools indicated as stressed represent about 13 percent of the 674 school districts that were evaluated, all of which had fiscal years ending on June 30, 2013.

“School districts are a critical barometer to the fiscal health of our local communities,” state Comptroller Thomas DiNapoli said in the press release. “Unfortunately, reductions in state aid, a cap on local revenue and decreased rainy day funds are creating financial challenges that more and more school districts are having trouble overcoming. My office’s fiscal stress scores highlight the need for school district officials to manage their finances carefully with an eye towards long-range planning and how they can operate more efficiently.”

The study found that the percentage of school districts in fiscal stress exceeded 30 percent in six counties: Chemung, Clinton, Madison, Montgomery, Niagara and Tioga; Upstate school districts were more likely to be in some level of stress compared to downstate districts; and regions with the highest percentage of stressed school districts were Central New York with 22.9 percent of districts, the North Country with 16.9 percent and Western New York with 13.9 percent.

Tupper Lake School District Superintendent Seth McGowan said those numbers speak for themselves.

“It’s not flattering to be in this position,” McGowan said. “I’d like to get off of that list, but I think far more schools are going to be on it before things get better.”

Making things better is a complicated process. McGowan said state education officials and

auditors have said his school board is doing everything it should be doing, but a rapidly decreasing fund balance – coupled with a state-mandated property tax cap – is leaving fewer options each year.

“I could see this coming three years ago,” McGowan said. “We’ve been talking about this and warning of it. As long as the funding in education continues along the same path, and the tax cap is still in place, that differential between the school expenditure and revenue is going to get tighter and tighter.”

McGowan said the district has been unable to raise enough revenue to increase the fund balance because it’s been using the money to balance the budget. The fund balance is normally set aside to handle unforeseen expenses.

“Besides using the fund balance, the other way to balance the budget is to reduce spending, but that’s a temporary thing,” McGowan said. “There are things that go up every year, like employee benefits and retirement. Those percentages are given to us by the state, they are not things we have any say over. We’ve reduced everything we can.”

McGowan said the heart of the district’s budget problems is an antiquated method of taxation where the burden of taxes is based on property value. He said Tupper Lake looks wealthier on paper than it is due to a disparity between high property values and the average income of the area’s residents.

“That causes us to be in this doughnut hole of state aid,” McGowan said. ” When property value was first used, I imagine it came from the idea that owning property is a sign of wealth, but it’s not relevant anymore. Sales tax and income tax are a much better measure of a community’s wealth. I think if the shift were made to something along that line, I think the whole state would be better off. At least it would be a much better picture. What better measure of an individual’s wealth or ability to support a school than what they earn and what they spend?”

To alleviate that, McGowan suggested that funding schools could be spread among every citizen.

“The fact is, it’s not just property owners who have a vested interest in the schools,” McGowan said. “It seems to me that if every person in the state should have a vested interest in the schools and in the community. If schools were funded through the personal income tax vehicle, where every person in the community, regardless of whether you own property or not, had a share in it, it would spread the burden over a huge population instead of just the property owners.”

Whether his ideas are worth considering, McGowan said he just wants things to improve for schools across the state.

“We’re told we’re doing everything right, we’re doing everything we can, we’re doing everything by the book. We’re doing what we’re supposed to be doing, and yet we’re still in this situation.”

Contact Shaun Kittle at 518-891-2600 ext. 25 or