Part 2: $600,000 in Projected Cuts for 2012-13 School Budget

At Tuesday night’s Nanuet School Board meeting. Phil Sions, assistant superintendent for business, updated the board on the financial status of the district. The projected 2012-13 budget shows that there is $594,968 in anticipated cuts because of the 2 percent tax levy cap.

This is the second article in a 2-part series. The looked at the district’s finances, how previous budgeting worked, public misconceptions, the super majority vote and money from the reserves.

In this article, Patch looks at more in-depth details on the packet that was passed out. That packet is attached to this article. This article also recaps the Board’s discussions following the presentation by Phil Sions, assistant superintendent for business. They talked about the possible actions and repercussions of this huge cut.

Repercussions/Possible Budget Actions

The Board members discussed several options on what cutting almost $600,000 would mean for the district. Some of the things discussed were cuts to personnel, class size changes and program changes.

“We’re now in the process of looking everywhere in the budget … to find where to cut $595,000,” said Superintendent Mark McNeill. “That’s the reality.”

“The other thing you could do is raise class size,” said Board Vice President Ron Hansen with dismay.

“If you try to follow this (2 percent) you’re going to continually cut your program,” said Board Member Chauncey.

“2007-08, we had 228 teachers and now we’re at 213,” said McNeill. “We have not reduced enrollment. We’ve reduced the staff by 7 percent and we have increased class sizes in some of the elementary schools and middle. Now we have to look for 600,000 more cuts. We have reduced monitors and we’ll have to do it again. We’ll have to look at the perimeter: the monitors, custodians, clerical, teaching assistants before teachers.”

Other Schools

“There’s going to be a lot of teachers across the state that are going to lose their jobs because of this,” said Byrne. “In North Rockland, they’re up to the 9th year of tenure that are losing their jobs.”

Certain exclusions— ERS, TRS—in the budget allow schools to go above the 2 percent.

“I’ve heard from the other districts … with respect to the 2 percent tax levy increasing more than 2 percent… I’m not hearing anything higher than 2.4 percent,” said Sions. “When you put in all the factors, … it’s not going to go up much more.”

“Using (this number) is very close to reality,” said McNeill referring to the projected budget numbers.

Hopes

The Board also put their hopes on certain variables such as a change in the levy tax cap or more state aid.

“There’s talk that we might get a 4 percent increase (in State Aid). I’ll believe it when I see it,” said Sions. “You just have hope that the legislatures … with this round of levy votes come May will react when they see the number of teachers and positions eliminated across the state. They’re going to have to find other exclusions.

“But in the meantime, that’s a lot of staff,” said Byrne.

Ending Remarks

“I’m on the board a very long time and it’s really depressing because things you put into place for that you know are good for the kids and you put it in over a long period of time, it’s just being undermined and really bothers me a great deal that we have to make decisions that are not good for children and certainly not good for our staff,” said Byrne. “Maybe if our legislators starts hearing from people … from the public.”

“Residents need to know what the board is faced with in terms of this new legislation,” said McNeill.

Page 1: 3-Year Trend in the Budget

One of the line graphs Sions prepared for the meeting showed the budget and tax levy for the previous, present and the projected 2012-13 years.

“Our goal has been to avoid spikes so we’ve been looking at two percent for a couple years and we’ve been able to do that,” said Sions. “(The 2 percent levy in 2012-13) … we have no say in that. That’s going to go up 2 percent. Based on that, our budget would go up 1.44 percent. This is in the preliminary stages, the numbers are changing all the time, but we’ve got a good handle on it right now.”

Page 2: Projected Budget Change Estimates

These are items that are fixed costs that are going to go up.

• “Thanks to the negotiations, they (the NTA Step Lane & Salary Schedule Increase) it was quite a bit less,” said Sions.
• “The MTA tax expired so they took it off our backs. At the end of the day, we were being reimbursed so it wasn’t as big of a deal as it was for small businesses, but it still comes off the budget which helps.”
• Estimated Special Education Tuition Increases: “Three high-costs families moved into the district unanticipated. That does happen.”
• “FICA, not too bad because the contract numbers were lower”
• “Health Insurance, we were pleasantly surprised. We were looking for a 12 percent increase but it turns out we got a 2.7 percent increase in individual, 3.3. percent in family and that just cut $440,000 out of the increase.”
• “We’re going to drop $680,000 off of our debt service. This is the first Pfizer Ban Payment. We issued a bond anticipation note to help mitigate the impact of the Pfizer settlement so this is an interest-only payment. But the following year, that goes up another $300,000.”

“You add all that together, you get a total budget change of $1,482,250. And you add that to your 11-12 budget and that’s where you’d be without a levy cap. That’s what you’d have if you didn’t have to worry about a levy cap. You would have absorbed all those increases you projected, no cutting programs, no layoffs, you’re good. You can even add things, if you want to buy equipment or whatever. That’s what I called the Good Ol’ Days.” Sions said referring to the section in labeled “The Before—Budgeting in the Past”

Page 3: Tax Levy Cap Calculation Formula

“This is the formula for the tax levy cap. The problem with the formula right now is we don’t really know what the final formula is going to be and we have to fill it out by March 1, which isn’t that far away,” said Sions.

He went through this page line by line

• Sions started with the baseline tax levy, which is $53,410,877
• Tax Base Growth Factor: “This has to do with how much the value of the properties in the school district grew. We don’t know that yet.”
• Allowable Levy Growth Factor: “That’s 1.02”
• PILOTS: “Pilots are payments in lieu of taxes. It’s a little bit complicated, but basically a corporation will come and you’ll agree to make a sum that you’ll pay in taxes. It’s not a rate, it’s a number.”
• Estimated PILOTS receivable in FYE: “Then you subtract the ones that you estimate for 12-13”
• Transfer of local government functions: “This is determined by OSC, which does not apply to us.”
• “Then you can add in these exclusions: The Tax Levy necessary for expenditures resulting from court orders etc…In the 25 years we’ve been here, we’ve never had a tort action. We wanted this to include tax certs. That would be a huge help for this district. I believe (Assemblywoman) Ellen Jaffee is looking into this.”
• “Then we get into exclusions for the retirement system. For ERS we get $32,081 and for TRS we get $108,576”
• “The other part we don’t know about is the debt service calculations.”

“There are a lot of unknowns as we go into the last couple of months we have to file this. We’re doing our calculations based on what we know right now.”

Page 4: Simplified Calculation of Required Levy to Reach 2% Cap

“This is the number we’re using right now because it’s a very simple way to start coming up with a number. The levy times 1.02 to get the new levy,” said Sions. “And the exclusions I talked about—ERS, TRS—will actually be added into that number. The increase in the tax levy will actually be more than 2 percent.”

“But right now we’re using that number pending further information. That’s what the exclusions do for you. They allow you to get a little above that 2 percent. Not much, but anything helps right now.”

Page 5: Analysis of Projected Budget Cuts as of 12/20/11

“I would recommend to the board that we go for the two percent levy. The only way you could get that $594,968 down is to bring in money from the reserves,” said McNeill.

“Fortunately we have a lot of reserves and that’s going to help out a lot, unlike some school districts, which have depleted their reserves,” said Sions. “($54,85,122) is the levy without reserves last year and that was in the face of the Pfizer settlement. Fortunately we were able to apply money from the debt reserve and the tax cert reserve and reduce that by $1,394,245. That got us down to this levy (of $53,410,877).”