Lupardo asks Comptroller for clarification about school insolvency | New York | Bankruptcy

THE ASSEMBLY STATE OF NEW YORK ALBANY

CHAIR Committee on Children and Families

COMMITTEES Economic Development Environmental Conservation Higher Education Transportation Veterans’ Affairs

DONNA A. LUPARDO Member of Assembly 123rd District

Thomas P. DiNapoli, NYS Comptroller Office of the New York State Comptroller 110 State Street Albany, NY 12236

February 13, 2013

Dear Comptroller DiNapoli, I recently met with a number of local school officials in my district regarding their concerns over potential fiscal and educational insolvency. While these concerns have been mounting over the years, the level of stress and anxiety I am witnessing is truly unprecedented. Between the combined wealth ratio with its artificial floor and ceiling, the gap elimination adjustment, and the property tax cap, many are wondering how they will be able to preserve the quality of education in their schools. Last year, I became aware that New York State has no provision in statute to allow school districts to declare bankruptcy. My understanding is that we are now using the language of insolvency to describe these dire conditions. I am hoping you can provide some clarification as to what that would mean for a school district. What would happen exactly if a school district declared themselves to be insolvent? What are the immediate practical implications? What state services might be available to help them?

ALBANY OFFICE: Room 626, Legislative Office Building, Albany, New York 12248 • 518-455-5431, FAX 518-455-5693 DISTRICT OFFICE: State Office Building, 17th Floor, 44 Hawley Street, Binghamton, New York 13901-4416 • 607-723-9047, FAX 607-723-9313 E-MAIL: lupardod@assembly.state.ny.us

As I'm sure you're aware, last fall, the New York State Council of School Superintendents conducted an online member survey of 249 superintendents. According to the survey, “9 % of superintendents say that within two years, given current trends, their districts may become unable to ensure some financial obligations will ever be paid. This share would equate to roughly 60 districts. Altogether 41% foresee reaching that condition within 4 years. North Country superintendents foresee the most immediate threats.” Regarding educational insolvency, the survey revealed, “18% of superintendents say that within two years, given current trends, their districts may become unable to fund all state and federal mandates for instruction and student services. 77% foresee reaching that condition, either within 4 years or beyond. Again, concern is most immediate in the North Country.” Any clarification or guidance you can provide regarding these questions would be greatly appreciated. I know from your past experience as a school board member, you know how dedicated these professionals are. They understand the fiscal constraints we are working with, and the limits of our state budget. They have made many tough decisions over the years, and will continue to so. Nonetheless, many are facing circumstances that are now beyond their control. Thanks for your time.

Sincerely,

Donna A. Lupardo Member of Assembly

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