The Shenendehowa Central Schools Board of Education heard the district’s annual three-year budget forecast at the Tuesday, Dec. 9, meeting. The presentation was of special interest considering that Gov. David Paterson is calling for spending cuts across the board, including reductions in state education aid.
The forecast is usually a five-year outlook, but it was scaled back due to economic uncertainty. If it holds true, the 2009-10 budget would clock in at $149.6 million, a 2.4 percent increase, and require a 3.3 percent tax hike. This year, voters approved a 4.7 percent tax increase.
In typical times, a 3.3 percent is a very attractive tax levy, said Superintendent L. Oliver Robinson, before noting that this year presents incredible circumstances. `It’s a reality we have to deal with.`
The subsequent years could see 8 and 9 percent tax increases, though officials cautioned that the projections are preliminary.
The budget forecast operates under a variety of assumptions that could change dramatically. It allows for a `best case scenario` of zero-growth in state aid over the next three years, but if Paterson’s preliminary budget, to be released Tuesday, Dec. 16, calls for reductions in aid for Shenendehowa, it will skew the numbers.
`I think they really set the stage to hit us in the next couple of years,` said Kathy Wetmore, Shenendehowa’s chief financial officer. `We’re really at the mercy of the state at this point.`
Shenendehowa is Saratoga County’s largest school district, and it is scheduled to receive more than $45 million this year. With such a large number, even a 1 percent decrease in state aid has a large effect. A 5 percent cut would mean $1.3 million less in aid, for example, and such shortfalls would have to be made up by expenditure cuts or tax hikes.
The district has certain expenses that it simply cannot cut back. It is contractually obligated to provide salary increases to many employees, and in 2010 it’s expected the obligatory donations into the teachers retirement system will double. An estimated $4.6 million of the district’s savings will go toward contractual expense increases in the 2010-11 school year.
Then there’s enrollment. Unlike most other area districts, Shenendehowa is anticipating an uptick in the student population in the coming years. If the 25-to-1 teacher-to-student ratio is maintained, an estimated 5.8 new teachers would be needed in the next school year alone.
Paterson had warned of mid-year aid reductions in November, but inaction in the legislature made that impractical. The district stood to lose $3.7 million in aid (still resulting in an overall aid increase for the year) under Paterson’s mid-year cuts. The governor has since warned that the lack of mid-year cuts will mean extreme measure will be necessary next year.
Shenendehowa has taken action to reduce this year’s budget by placing a cap on various non-commitment expenses, such as meals, travel, conferences and supplies. The district hopes to reap over $4 million in savings with the cap, bringing 2008-09 spending to $141.7 million, or 97 percent of the approved budget.
Paterson will be drafting his budget early, and the same is true for Shenendehowa’s own budget preparations. Though they won’t be able to formulate hard numbers until at least Dec. 16, next year’s finances have already been the prominent subject of several meetings.
`We don’t usually start the process this early, but we’re knee deep in it already,` said Board President Janet Grey.
Some board members said that the demands on schools put them between a rock and a hard place, with state mandates accompanied by calls for tax caps and budget reductions.
`They’re handing us a double-edged sword, and no matter what side we grab we’re going to get cut,` said Robinson.
Robinson did praise the board for being proactive amidst the fiscal crisis and considering ways to maintain services rather than taking a `slash and burn` approach. He said that although change is being forced, the district can seize the opportunity to improve itself.
`People have been tremendously responsive to the idea we have to do things differently,` said Robinson. `[The next year] will be a challenge, but within the challenge will be some tremendous opportunities.“