Raising the stakes for schools… Today’s contingent budgets
Since New York’s tax levy “cap” law went into effect, public schools have been facing a new reality when it comes to contingent budgets.
No longer is there a spending cap on contingent budgets. Instead, there is now a 0 percent cap on the tax levy increase. In other words, a district that adopts a contingent budget would have to levy the same amount of taxes as in the current year or less—without any adjustments for state pension rate increases, contractual obligations or any other costs, mandated or not.
However, other aspects of the contingent budget rules have stayed the same. If voters defeat their school district budget in May, a district has three options:
The district could:
If residents vote down the budget a second time, the district MUST adopt a contingent budget.
Zero percent increase in contingency is the real “cap”
Adopting a contingent budget prohibits a district from spending any money in certain areas, including community use of school facilities (unless all costs are reimbursed to the district); new equipment purchases; nonessential maintenance; capital expenditures (except in emergencies); salary increases for non-instructional, non-unionized employees; and certain field trips and student supplies.
Contingency rules also cap the growth of the administrative component of the budget. These requirements existed prior to the tax levy cap and remain in effect.