Op-Ed by Senator Dean Murray
I would like to take a few minutes to lay out exactly what Assemblyman Joe DeStefano and I were facing, and the actions we took regarding the South Country School District fiscal crisis.
Let me start by saying that in all my years of public service, I have never seen such a dire and disastrous financial situation.
In January 2026, we were approached by school district officials about an impending financial problem in which they had “overspent” their budget by roughly $3.4 million. As the days and weeks went by, it became clear the number was substantially higher. As those figures continued to change, my office contacted the NYS Comptroller’s Office and requested an audit to determine the true extent of the deficit.
The official numbers ultimately showed the district was $8.7 million short this year, with another negative $1.8 million in reserves—bringing the total to $10.5 million for the 2025-26 school year.
Unfortunately, the financial problems do not end there, as additional debt looms moving forward. However, because New York State does not engage in multi-year budgeting, our focus had to remain on the current year to ensure students could actually complete the school year.
Based on the district’s situation, it was set to run out of money at the beginning of May. When I say “run out of money,” I mean that literally. There would be no funds to pay teachers and staff, no money for services, and no ability to keep the lights on. The school year would have effectively ended early—doors closed, students sent home, and all school activities halted.
Obviously, we could not allow that to happen.
There are some who argue we should have “done nothing” and allowed the situation to unfold. To them, I say: doing nothing would have cost taxpayers millions more.
A large bond payment is due shortly. Without state assistance, the district would not have had the funds to meet that obligation. A default would have dropped the district to “junk bond” status, dramatically increasing borrowing costs and adding millions in additional expenses—costs that would ultimately fall on taxpayers.
We could not allow that to happen. Our priority was clear: stabilize the district, keep schools open, ensure employees were paid, and meet all financial obligations, including payroll and bond payments.
Some have suggested that doing nothing would have triggered an immediate state takeover. That is simply not the case. Even if a takeover were to occur, it would not have happened in time to address the immediate crisis. The result would have been the same—schools closing early, students losing instructional time, and taxpayers facing significantly higher long-term costs. That is not an acceptable outcome.
Looking ahead to the 2026-27 school budget, uncertainty remains. Due to ongoing disagreements among the Democrat majority in Albany, a state budget has not yet been finalized. As a result, we do not yet know how much state aid will be allocated to school districts.
Assemblyman DeStefano and I have been advocating for districts to receive more than the 1% increase proposed by the Governor. If successful, that increase could help reduce the tax levy currently being considered.
It is important to clarify, however, that state lawmakers do not control school district budgets or tax rates. While we helped enact the 2% tax cap, local school boards determine their budgets and whether to propose exceeding that cap.
If a district proposes a tax increase above the cap, it must be approved by at least 60% of voters. If that threshold is not met, the budget goes to a second vote, where the board may revise or maintain the proposal. If it fails again, the district must adopt an austerity budget, reverting to the prior year’s spending level. Ultimately, voters decide how that process plays out.
I hope this explanation provides a clearer understanding of the circumstances Assemblyman DeStefano and I faced, and why we took action to “rescue”—not “bail out”—the district, its students, and its taxpayers.
As part of that effort, I insisted on strict oversight measures. The legislation requires detailed, line-item financial reports to be submitted quarterly for the next 30 years to the district CFO, local school board, NYS Division of Budget, NYS Comptroller, NYS Education Commissioner, and legislative finance leaders.
Beyond stabilizing the situation, we must also determine how this crisis occurred. The public deserves answers. That is why I have spoken with Ray Tierney and requested an investigation into whether any wrongdoing took place. The bottom line is simple: we will not allow this situation to be ignored or forgotten.