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Governor Patterson
recently announced his decision to delay December's
payment of state aid funding slated for public schools.
The Governor has also said that during the next few
months other monies may also be delayed as part of the
strategy for dealing with the state fiscal crisis. STAR
payments will reflect a reduction of 19%. Although
the Governor is saying that this money is just being
lagged and will be paid in the future, some are
speculating that this lag may become a permanent cut.
With school's entering
into this years budget development process for the
2010-2011 school year faced with numerous budget
challenges and unknowns, Governor Patterson has
repeatedly suggested that school districts use
unrestricted reserves known as "fund balances" to cover
possible losses in state aid for this year and next.
While this approach may
be one possible way of dealing with the reductions,
using up district fund balances pose additional risks.
Fund balances are reserved for daily cash flow purposes
and unbudgeted district emergencies that could otherwise
close school or restrict daily operations. For example,
if a boiler were to break, the district would use its
fund balance to repair it right away.
New York State law allows
each public school district to carry a fund balance of
no more than 4 percent of its current budget - GESD
currently carries a fund balance of about $1.4 million
or 2.8% of its $50.6 million budget.
Click here
to read an article from the Leader-Herald that ran on
Dec. 28.
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