How Much is Too Much?

Smaller school district savings often exceed state limit Since 2022, the Garrison school district has watched its unassigned reserves —sometimes called a "rainy day fund" to cover unanticipated expenses — grow to $2.85 million, about 18 percent of its 2026-27 budget of $15.5 million. That's more than four times what state law allows, which limits savings to 4 percent of a district's budget. Haldane reported at its board meeting this week that its unassigned reserve is $1.28 million, about 4 percent of this year's $32 million budget. Haldane has about 775 students in pre-K to 12th grade. Garrison, which does not have a high school, has about 200 students in pre-K through eighth grade. The Beacon district, with 2,400 students, has kept its fund balance at around 5 percent. As of June 2025, it had $4.6 million reserved as part of $87.7 million in planned spending. This year, the district expects to have a slightly smaller balance, although it is awaiting the results of its annual audit. "We stay right in that range," said Ann Marie Quartironi, the deputy superintendent. "We run pretty lean." The state levies no penalty for exceeding 4 percent. "We generally recommend that district officials reduce the balance to comply with the law," said Mark Johnson, a spokesman for the New York State Comptroller's Office. "School districts are funded substantially by taxpayers and accumulating more surplus funds than permitted can result in taxpayers providing resources that are not needed for current operations." Many school districts exceed the 4 percent limit. Of the 673 New York districts, 227, or about a third, had unassigned balances above the limit in 2023, according to a study by the Rockefeller Institute of Government. Ten percent, including Garrison, had balances between 10 and 20 percent, and 3 percent had balances over 20 percent. Dan Jasnow, president of the Garrison school board, said the district wants to lower its unassigned reserves. "We are targeting the 4 percent," he said. "We do take that statutory obligation seriously." Garrison's tax rate this year, at $8.47 per $1,000 of full value, ties with Pocantico Hills, in Westchester County, for the lowest of the 88 districts in the Lower Hudson Valley. "The primary reason the unassigned fund balance has increased in recent years is that certain contingency expenditures that districts must plan for did not materialize," said Superintendent Greg Stowell. They include special education placements which, when coupled with transportation costs, can run as much as $300,000 per student. In addition, the district, which contracts with three local high schools for its eighth-grade graduates, receives partial reimbursements for tuition sent to O'Neill High School in Highland Falls when payments exceed those allowed under a state formula. "Because these costs can fluctuate significantly from year to year and can have a substantial impact on a small district's finances, the district budgets prudently for them," Stowell said. "When actual expenditures come in below projections, those funds remain in year-end fund balance." The last time Garrison's unassigned fund balance was under 4 percent was 2022, said Joseph Jimick, the district's business manager. The fund peaked during the 2024-25 school year at $3.2 million, about 22 percent of its $14.7 million budget. It would have been higher, but the school board allocated $1.5 million to balance the 2025-26 budget. Jimick said the fund balance for 2026-27 would have been $4.65 million, but the district allocated $1.8 million to balance the budget and made smaller contributions to accounts mandated by law for specific purposes, such as the Teachers' Retirement Contribution Reserve, Employees' Retirement Contribution Reserve, Unemployment Insurance Reserve and Employee Benefit Accrued Liability Reserve. Those contributions lowered the balance to $2.85 million. Drawing down the fund balance to the 4 percent limit all at once would be imprudent, ...