N.Y. schools bracing for lowered funding
CAMBRIDGE, N.Y. -- Although promised future funding tied to personal income growth, New York school officials are bracing for less than anticipated revenue next year because of natural disaster and federal sequestration.
While total state aid for K-12 education increased about 4 percent, or $750 million, for 2012, deeper cuts had preceded the previous three years and costs continued to escalate at a higher rate. Now, "we can't guarantee what we've told you you'll get next year," said James Dexter, superintendent for the Washington-Saratoga-Warren-Hamilton-Essex BOCES. Addressing the Cambridge Central School board last Tuesday, Dexter identified a number of variables that could strain next year's state budget and have a negative consequence on local school aid runs.
While the federal government contributes only a small annual percentage of funds to local school districts, the impact of an across-the-board 10 percent cut -- sequestration's so-called "fiscal cliff" -- would impact a myriad of state programs if federal lawmakers can't agree by the end of the year. Dexter said all those cuts would add up. "If it does occur, it really would have a negative effect," he said.
Meanwhile, recent devastation caused by Superstorm Sandy downstate threatens to add to next year's state deficit. And there is no end in sight for New York's "Gap Elimination Adjustment," which drastically reduced operating aid formulas beginning in 2009-10.
"I would like to say the news is rosy, (that) school districts ... have some type of relief coming in any way. ... Clearly that's not the case," said Dexter.
State revenue for the 2013-14 school year is an unknown before the first executive proposal next month from Gov. Andrew Cuomo's office. The executive address has recently been a good indicator of the Legislature's approved spending plan, and this past January Cuomo promised school aid would increase 3.5 percent in 2013-14 as part of a two-year planning cycle.
As schools begin to roll over their budgets, however, some costs figure to outstrip any aid increase, as well as the amount of additional revenue schools can raise under New York's property tax levy limit.
Last month, state Comptroller Thomas DiNapoli released next year's employer contribution rate for the Employee Retirement System, which will go from 18.9 percent of payroll to 20.9 percent -- about an overall 16 percent increase.
And the employer contribution rate for teachers into the state Teachers Retirement System is anticipated to increase from 11.84 percent of payroll to between 15.5 and 16.5 percent. That 30 to 40 percent increase will drive up schools' single greatest expense: Teaching personnel.
Dexter said mandated costs like those associated with retirement had caused school expenditures to increase 6 to 7 percent each year, requiring that districts tap into their fund balance reserves. "The question is what happens with fiscal insolvency," he said. Approximately a dozen districts across the state risk not covering costs next year, and Dexter said the result would likely to go case law and "be ugly and very messy."
In a midyear report from Business Administrator Beth Coates, she said CCS could end the current school year approximately $300,000 under budget because of savings in salaries, special education, and buildings and grounds.
The school budgeted $800,000 in fund balance for the year, meaning the district can expect $1.7 million left in reserves headed into next year's budgeting season. With known expenses, Coates said the district would be looking at a year-to-year deficit nearing $1 million.
Last year, the district shed 17.1 positions through cuts and attrition and dropped funding for extracurriculars and eight sports. "The real concern is what is going to be the future of public education in New York state," said Dexter.
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