Cuomo: LI schools have millions in reserve

ALBANY - The Cuomo administration says more than four out of five Long Island school districts are sitting on tens of millions of dollars in reserve funds - more than enough to offset the spending cuts the governor has proposed.

According to data compiled by the administration and obtained by Newsday, 74 percent of school districts statewide - and about 85 percent on Long Island - could use reserve funds or unused federal stimulus money to deal with the cuts.

Just a week after the Long Island State Senate delegation had complained that his proposed cuts were unfair to some Island schools, Gov. Andrew M. Cuomo is taking his campaign to rein in state spending - including school aid - to Hofstra University Wednesday. Some school districts, however, say his plan would be a short-term fix, but a long-term disaster.

Besides proposing the first overall state spending cut in 15 years, Cuomo also wants to reduce school aid $1.5 billion - an average 9 percent statewide and 11 percent on Long Island. He has suggested that, in most cases, districts have enough available money to offset his cuts without laying off teachers or eliminating programs.

"School districts have $1.2 billion in reserves. School districts have $600 million left over from last year's federal (stimulus) funding that they didn't spend," the first-year Democrat said in his budget address. "That's $1.8 billion right there. Our entire cut is $1.5 billion."

Cuomo also singled out school superintendents' salaries, noting that 279 across the state earned more than $200,000 in salaries and benefits annually.

According to the data, some Long Island districts have multiple millions of dollars in undesignated reserves. For instance, East Meadow has more than $17 million in reserve. Longwood has $8 million; Sewanhaka $6 million. In each case, that would be enough to cover the proposed cuts. Eighteen districts, however, do not have enough to offset the cuts.

Districts typically use unrestricted reserves to hold down taxes and for expenses such as emergency repairs. The state school boards association says that 98 percent of school districts in the state have tapped into reserve funds during the current academic year.

Some schools disputed the governor's math and approach.

"If these funds are used to offset current year state aid cuts, what will the district do in the following year?" said Sheldon Karnilow, Half Hollow Hills superintendent. Half Hollow Hills has about $8.3 million in reserves and $1.4 million in leftover stimulus money.

Hauppauge plans to use $673,000 in stimulus funds to help offset cuts, said James Stucchio, assistant superintendent for business and operations. But he said he'd be hesitant to dip into its $3.7 million in reserves.

"It is a one-time deal," Stucchio said. " . . . It's a Band-Aid, not really a solution."

Alan B. Groveman, superintendent of schools in the Connetquot school district, called the idea of using reserve funds "an absolute recipe for disaster." His district, according to the data, has about $6.4 million in reserves and $1.4 million in untapped stimulus funds.

"The use of undesignated fund balance to cover the state aid deficits would work if this was a one-time deficit, which would be replenished in the following year and there was no tax levy cap," Groveman said. "Using undesignated revenue this year without a promise of substantial gains in state aid and with a [potential property] tax cap will result in a need to cut multimillions in dollars in the following year's budget."

Noting that annual dramatic aid increases were not sustainable, Cuomo spokesman Josh Vlasto countered: "We're not saying that the schools should use all this money to offset the cuts. We're just trying to give an appropriate context."

Senate Education Committee chairman John Flanagan (R-East Northport) said every type of school spending must be on the table as lawmakers grapple with the state deficit. Tapping reserves might work for some.

With Joie Tyrrell