The 2016-17 budget development process is well underway here at Schalmont, and the outlook this year is grim.
As with most schools, the first step in constructing a new school
budget at Schalmont is to create a “rollover” budget. A rollover
budget assumes the district will keep all programming and staff
exactly as it is and budgets for any known increases in salaries and
TRS and ERS pension contributions, while making projections for items
energy, health insurance, etc. for the next year. Included in the rollover are any step and salary increases for staff.
The rollover budget once calculated becomes the preliminary or working budget and serves as a starting point for discussion.
The working budget for the 2016-17 Schalmont school year totals $47,130,047.
Generally speaking, school district budgets are funded by a combination of state aid and a local property taxes.
Currently, the district stands to lose nearly $500,000 to the Gap Elimination Adjustment (GEA), which is essentially a take-back of aid from the school district by the state. Since the GEA was introduced, the district has lost more than $8 million in state aid. On top of the GEA loss, the district is slated to receive only slightly more than a $2,000 increase in foundation aid from the state. Overall, Schalmont was one of a handful of districts statewide that actually received LESS financial aid for 2016-17 than in 2015-16. As a result, the district is receiving less revenue than was expected and definitely less than what is needed.
Another major influence on the district’s budget is the imposed
property tax levy limit or “cap.” The property tax levy growth for
school districts will be limited by CPI or Consumer Price Index. The
State has defined a 0.12 percent increase in CPI, meaning that there
has been virtually no inflation over the past year. Deflation in
energy costs are
a major factor in the lack of inflationary trends. The CPI is a key factor in the governor’s tax levy limit formula. The tax levy limit, which was instituted in 2012, limits tax levy increases to the lesser of the rate of inflation or 2 percent with certain exceptions. As we all know from basic math, zero multiplied by anything is still zero. And 0.12 percent
is pretty close to zero. When we add our limited exemptions to this calculation, Schalmont is looking at a potential allowable levy increase of just 0.37 percent, or approximately $100,000.
Another factor is that the district is situated in a community with
several commercial properties that contribute to the school’s tax
base. These properties such as GE, Golub and the Rotterdam Mall also
have faced some of their own financial difficulties, and their
financial situations also impact changes in the amount of revenue we
through property taxes for our district. The district has had tax certiorari claims from large corporations during the past few years that have cost a great deal of money and required the district to tap into our limited funds to counteract it.
Simply put, as a district, our expenses are continuing to rise, but we cannot generate the revenue to match. If the district cannot generate sufficient revenues from state aid and property tax to cover the proposed spending plan, then the district has no choice but to slash the budget. A district cannot spend more than it is taking in. Because of constrained revenue dictated by state aid and the levy limit, Schalmont officials are looking at a budget gap of $1.2 million.
Schools are a “people” business, and as such, the largest ongoing expense any school has is its personnel. Approximately 80 percent of the district’s budget is dictated by contractual obligations such as salaries, step increases, and employee benefits.
Schalmont was recently featured in an article in the Daily Gazette on instructional salaries outlined in the Business Review publication. This publication researches contractual salaries across the state and in the Capital Region. Schalmont ranks 20th in the publication’s list of top 100 districts across the state in terms of highest average median salaries.
The Schalmont Board of Education recently adopted a new contract for support staff, which includes an average salary increase of 2.5 percent or $120,000, as well as concessions on health care contributions from union members.
Even though the district and the instructional staff remain in negotiations, the district is contractually obligated to continue with pay raises and step raises as outlined in the expired contract. Instructional staff salaries increase annually at an average of 2.7 percent, which equals about $350,000.
While the district must, and does, plan for salary and benefit increases, the district’s ability to pay an increased amount is diminished by the continued loss of state aid, increased unfunded mandates, and limitations on property taxes. As financial pressures mount, what the district is able to offer in terms of future salary and benefit agreements decreases with the passage of time.
Schalmont Central School District has lost nearly $8.3 million
dollars in school funding because of the Gap
Elimination Adjustment and currently stands to lose another $500,000 for the 2016-17 school year.
Unfunded mandates, such as the implementation of the State Education Department’s reform agenda, have also increased costs over the past several years for the district and drained resources that might have been spent on other things.
Money spent on negotiating an ever-changing evaluation system and all the necessary professional development around the Common Core Learning Standards have increased our costs as a district, even though we have not seen an increase in revenue from the state to cover such expenses.
There are many other unfunded mandates that are dictated to us by the state over which we have little to no say, yet still must plan for financially in our budgets.
There are essentially three ways that a budget gap can be closed: the board can choose to either cut spending, to increase revenue by exceeding the tax levy limit, or a combination of both.
If the board were to consider exceeding the tax levy limit, a super majority of 60 percent of eligible tax payers would be needed to approve the district’s proposed budget.
Historic evidence shows that attempts to override the levy limit come with a risk.
In 2015, 18 districts in New York State proposed budgets that exceeded the levy limit; 40 percent of those did not pass, according to NYSSBA.
According to a 2014 report by NYSABO, “We found that a budget is much more likely to fail if the district proposes to override the Tax Cap than if it proposes to stay within it. Districts that stayed within the Tax Cap had almost no failed budgets, while districts that sought to override tended to have budget defeats.”
A two-percent increase in the levy is equal to about $500,000. That would still leave the district facing a $700,000 budget gap. Even if the board decides to propose a budget that includes a tax levy limit override, it won’t be enough revenue to cover all costs, so cuts will still need to be made.
During the past ten years, the district has faced a steady decline in enrollment – a trend predicted to continue – which led to the closing of schools and merging/ reduction of staff. This, along with budget cuts, resulted in a loss of more than 71 full-time positions for administrators, teachers, and non-instructional staff throughout the years.
Many of the recent cuts and reductions were made in
non-instructional or administrative categories. District officials
have been able to shelter areas of instruction from the ongoing
financial crisis for a while, but the time has come
that everything must be considered in order to bridge this gap. The reality is that this year, the district is facing budget reductions that will result in a decrease in programming and activities that directly impact our students as well as staff, some of whom potentially face layoffs.
The amount of money Schalmont Central School District has lost because of the Gap Elimination Adjustment is the equivalent of 32 percent on the tax levy.
Administrators, along with the Schalmont Board of Education will continue to wrestle with these tough decisions as they work to develop a budget that meets the needs of our students while being mindful of the constraints of our taxpayers.
Staff members are always encouraged to share any thoughts or ideas with any of the administrators or the board. This is a process that affects us all. If you choose, you can be part of the conversation.
We will continue to negotiate with union leaders on creating an agreement that we can financially sustain and keep programs and people in place for students over the next several years.
If you are unhappy with what is happening with the budget here at Schalmont, there is something you can do.
You are encouraged to contact your government representatives. Let them know you support ending the GEA for the 2016-17 school year and that you want a foundation aid formula that is fair and equitable to all schools, and that the state should live up to its obligation to make sure that its public schools are fully funded.
Advocacy takes many forms. It could be a note to an elected official (see contact information on the next page), a comment made during a public forum, a letter to a newspaper editor or formal testimony at public hearings. It could be as simple as chatting with neighbors to clear up misunderstandings about education issues or sharing education-related stories with a local civic organization during monthly meetings.
Becoming an advocate for education is not as hard as you might think. Anyone can become involved, at any level they choose. The only prerequisite necessary is a desire to fight for our students and our community schools. Effective advocates do their homework. They know the issues and plan their communication. Most of all, they give a little of their time to advance their cause.
During these difficult budget times, all members of the Schalmont community are encouraged to contact their elected leaders to voice their opinions on public school funding and mandate relief. We remain optimistic that working with local and state level representatives will have a positive financial impact for our district.
Schalmont Central School District’s foundation aid has only increased $151,000 from the 2009-2010 school year. New York State is $4.4 billion behind on the phase-in of the foundation aid formula. As a result, Schalmont is slated to receive an increase in foundation aid for 2016-17 of just over $2,000.
We ask for your patience and cooperation as we deal with the financial situation that will impact us all this budget season. As we navigate the challenging path to balancing our budget, it is important that we all keep the focus on why we are all here: to provide our students with the best education and opportunities that we can as we continue to strive to make a difference in the lives of children as they learn and grow.
Advocacy for your opinions and philosophy and your school district is something you should not be afraid to voice.
Governor Andrew Cuomo
By phone: (518) 474-8390
By mail: NYS State Capitol Building, Albany, NY 12224
Senator George A. Amedore, Jr.
By mail: Legislative Office Building, Room 802, Empire State Plaza, Albany,
By phone: (518) 455-2350
By e-mail: email@example.com
Assemblymember Angelo Santabarbara
By mail: LOB 829-A, Albany, NY 12248 OR 1170 Riverfront Center,
Amsterdam, NY 12010
By phone: (518) 455-5197
By e-mail: SantabarbaraA@assembly.state.ny.us
We need all of you to help spread the message: New York state needs to properly fund our public schools. Pick up your phones and call your legislators. Send them a letter or an email. Let them know you support fully funding our public schools, fixing the foundation aid formula, and eliminating the GEA this year.