Budget planning in the dark
DELMAR — Bethlehem Central School District adopted a $116.6 million budget with a 1.12% tax levy increase for the 2025-26 academic year while warning residents that ongoing fiscal uncertainty, inflation, and declining enrollment may lead to deeper financial challenges in the years ahead.
After months of presentations and revisions, the school board approved the budget plan, which now heads to district residents for a vote on Tuesday, May 20.
Before the board vote, Chief Business and Financial Officer John McPhillips stood by his budget recommendation submitted for review at last month’s meeting, which maintained the 1.12% tax levy increase—the maximum allowable under state law without requiring a supermajority vote for approval.
McPhillips told the board that in the past three years, the district had not levied the maximum allowable tax amount, essentially leaving $1,177,762 in potentially collectible tax dollars on the table.
As previously proposed and based on currently available assessment values—final numbers won’t be confirmed until this summer—McPhillips predicted this budget would result in a 1.35% tax increase for district residents in Bethlehem, or $30 per $100,000 of assessed property value. Meanwhile, New Scotland residents would see a 1.64% decrease, or $37 per $100,000. Rates will be finalized in August.
McPhillips said the reduction from the $117,465,695 originally proposed in February to the current $116.6 million figure resulted from “a lot of hard work” by department and division heads who “squeezed” their budgets. He cautioned, however, that given unpredictable increases in costs, decreases in investment interest or revenues, or other unexpected needs, this budget is “just a starting point for the 2025-26 budget year.”
Rather than offering additional cuts, McPhillips recommended transferring $715,241 from the district’s undesignated fund balance to reduce a $1,535,341 gap between spending and income to $820,100, which the 1.12% tax levy increase would cover. The district’s undesignated fund balance stood at $4,557,223 as of June 30, 2024.
In response to a question from board member John Walston, McPhillips said the fund balance can grow when budgeted monies are not expended, such as when staff vacancies result in a surplus. He likened the account balance to a “rainy day fund.”
Fiscal uncertainty threaded through the evening’s budget discussion. Before the vote, McPhillips, board members and Superintendent Jody Monroe pointed to a combination of concerns, including declining enrollment and economic instability, particularly tied to federal policy and inflation.
McPhillips cited uncertainty over the district’s $2.7 million in federal aid, which may be cut, or possibly offset by the state if it is forced to backfill its own budget
