The Bethlehem Central School District is projecting a deficit of nearly $4.4 million for the 2012-13 school year budget, even after factoring in the use of $1.75 million in reserve funds and a tax hike.
Under the state’s tax cap law, the district would be able to raise the tax levy by 2.72 percent next year. To make a larger increase to the levy, 60 percent of voters would need to agree upon the rate instead of a simple majority.
The school district is projecting a tax levy increase of 2.72 percent into the budget gap figure.
School officials blamed unreliable state aid funding, contract and pension obligations and the newly implemented tax cap for the wide budget gap. According to the Chief Business and Financial Officer Judith Kehoe, the district will need to make up the funds from non-mandate areas like staffing and program reductions.
“About 75 percent of our budget is from salary and fringe benefits,” she said, adding that additional cuts to staff will be exceptionally hard with the loss of nearly 60 positions over the last two school years.
The district would have to spend $91.5 million to maintain this year’s programming in 2012-13, with approximately $22.29 million being provided in state aid as a conservative estimate.
Superintendent Thomas Douglas said the district lowered its expected state aid contribution for the 2012-2013 school, based on past years when district did not receive all of the promised aid. For the 2011-12 school year, $22.8 million in state aid was projected and only $22.2 million was received. For next school year, the Governor’s Aid run is projecting around $22.7 million to go to BC, but a $22.3 million receipt is being planned for.
“It puts us in a better position if we project a more realistic estimate,” Kehoe said.
Douglas said the projected state aid is nearly the same as that distributed five years ago, yet costs have risen and districts are facing additional unfunded mandates each year.
“We have to face that the federal and state cavalry is not coming,” said Kehoe.
To keep the same level of services without reductions, the district would have to make a nearly 11 percent increase in the tax levy, which officials said would be an untenable request to residents in these hard economic times.
Douglas called the term “tax cap” a misnomer that can be misleading to residents since the levy can extend past a 2 percent increase.
“There is no such thing as a cap on taxes,” he said, adding the district is now referring to the law as a “levy limit.”
“That’s really the law. It decides what amount of voter support do you need for each levy that’s put before the public,” he said.
Numbers may change slightly as the formula evolves over time, but the district must have its numbers into the state by March 1.
Kehoe said some additional money could be found with the sale of the Educational Services Center. The district is also considering renting Clarksville Elementary School to the county Sheriff’s Office.
“The solution has to be for the betterment of the whole community, not just for what we (the district) thinks it is,” Douglas said. “We need to all look at solutions together as a whole.”
A presentation of the budget will be given at the next Board of Education meeting on Wednesday, Feb. 15, and a budget forum will be held on Feb. 28. The board will adopt a budget in April and the public will vote on it in May.
