When federal stimulus money runs out after 2010, New York school districts could face a $2 billion funding gap, Comptroller Thomas DiNapoli said last week.
When funding provided under the American Recovery and Reinvestment Act runs out, property taxpayers could be on the hook for an average 7.7% property tax increase in the 2011-12 school year to make up the difference, according to a report released by the comptroller.
"ARRA funding has helped ease some of the budget pain for school districts and taxpayers," DiNapoli said in a press release. "But that money stops in 2011-12, and when it does, New York's schools face a $2 billion funding gap. … The time to start thinking about how to fill that hole is now, not when the money is already gone."
On average, schools in the state have relied on ARRA funds for 5.3% of their budgets in the 2009 to 2010 school year, according the report. The federal funds helped independent school districts hold tax levy increases to an average 2.1% in the current school year. Without ARRA funding, independent school districts would have had to raise property taxes by an average 7.7% or cut costs by as much as 3.2%, the report said.
In order make up for the loss, the state would need to increase foundation aid by 31% instead of the 17% increase that it has projected, which the comptroller's office said was "an unlikely scenario given the state's fiscal difficulties."
