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City schools cushioned by record surplus With state aid cuts expected next year, there is $119.3 million to help ease pain

The Buffalo Public Schools have accumulated a record surplus of $119.3 million that will help cushion the blow from reductions in state aid that are expected to affect the next school year, the Board of Education was told Wednesday evening.

"We should count our blessings that we've managed to accumulate what we have," said Gary M. Crosby, the school system's chief financial and operations officer. "We're going to have a plan [for reduced state aid] in place, ready to go. We're not going to wait until the ax falls."

Facing massive budget shortfalls, the state anticipates dramatic cuts next year, even in the politically popular area of school aid.

Crosby said the system finished the last school year with a $45.8 million surplus, due largely to savings from single-carrier health insurance, lower-than-anticipated charter school payments, vacant positions and tight budgeting.

At the same time, he said, the system increased instructional time and reduced class sizes at 16 schools, expanded two College Board high schools, introduced the "small schools" model at Bennett and South Park high schools and added 129 teaching positions.

With surpluses carried over from previous years, the accumulated surplus rose to $119.3 million, Crosby said, with $33.8 million, or just over 4 percent of general fund expenses, making up a "rainy day fund" that can be used at the system's discretion.

There is $65.4 million designated for particular purposes, but it could be used to cover other expenses in an emergency, he said, and the remaining $20.2 million can be used only for clearly defined expenditures.

Crosby said the surpluses, as percentages of the budget, are in line with recommendations from the Government Finance Officers Association and give the system a level of protection that was lacking just four or five years ago.

When state aid was drastically cut after the terrorist attacks of Sept. 11, 2001, the system had just $27,000 in its rainy day fund and was forced to eliminate 450 positions in the middle of the school year, Crosby said.

"In the past, this [system] was walking a financial tightrope, with little to fall back on," he said.

Buffalo relies on Albany for 80 percent of its funding and next year expects far less state aid than anticipated. But Crosby said the surplus should help absorb that loss with minimal impact on classroom programs.

"We have to be prepared for this," he said. "That's what we're doing now."

In another matter, School Superintendent James A. Williams announced that the system's Middle Early College High School, which allows students to earn both high school diplomas and associate's degrees in five years, will remain open.

Under a proposal announced last month, Middle Early College High School would no longer accept students next year and be closed after current freshmen graduate in 2013.

Instead, Williams said Wednesday, the program will continue uninterrupted and will relocate in 2012 to a building owned by the school system. It currently operates out of leased space at Main and Swan streets.

"It's a very good program," Williams said. "We probably did not think this through as well as we should have."


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