Thursday, February 18, 2010

State comptroller finds hidden school money pot

From Crain's/AP:

A state audit found New York public schools have been socking away hundreds of millions of dollars in reserve accounts that they can't touch now in the midst of a budget crisis.

Comptroller Thomas DiNapoli's office identified $615 million that school districts have been holding "unnecessarily." He said last week that the districts placed more money than they would ever need in reserve accounts for employees to receive accrued sick and leave time when they leave their jobs.

The problem is that state law designates those accounts for a specific purpose, and now the money remains largely untouchable, costing taxpayers millions at a time when the state has an $8.2 billion budget deficit and schools could face cuts.

"Many districts were putting money into those funds to help pay for the cost of health insurance coverage for retirees," said Dave Albert, a spokesman for the state School Boards Association. "It turns out the funds cannot be used for this purpose. As a result, there are some districts that have more money in those funds than they need."

Lawmakers would have to pass legislation to give districts more freedom in how money in employee funds is used. That's exactly what Mr. DiNapoli recommends.

His idea is to create legislation allowing school districts to set aside reserves to pay for future retiree health care costs. That would get the money out of the accounts where it's currently stranded and help the schools prepare for more financial stability in the future, when the cost of retiree health coverage is expected to grow exponentially, Mr. DiNapoli said.


Gary the Agnostic said...

Are these school districts in the city, or elsewhere in the state?

Anonymous said...

this "stranded" billions of tax revenues must be directed
to paying rebates to homeowners, for out of control property taxes levied. especially to fixed income retirees. our property taxes have increased 20.5% since 2002. and we have lost exemptions recently. much of the property tax pays for education in nys.