2012-13 Budget

Budget Development Guide

Dec. 13, 2011

See complete budget development timeline for 2012-2013 budget

The 2012-13 budget process marks the fourth straight year of serious financial challenges for Mohonasen and other school districts across New York. The state’s fiscal condition and the loss of $800,000 in federal aid leads school officials to predict that overall state operating aid will once again be reduced or – in the best case scenario – remain flat.

At the same time, the cost of operating a school district in New York State continues to rise and taxpayers continue to feel the impact of the prolonged economic slowdown.

The recession and efforts to rein in ever-increasing property taxes, have forced school, state and national leaders to rethink the way public schools operate. Another round of drastic budget cuts are likely for Mohonasen next year.

Below are some of the factors that will affect budget development for 2012-13. Please remember that every $224,576 in lost aid or new expenses represents either a 1 percent increase in the tax levy or commensurate program cuts in the budget (unless state aid is increased).

• Over the last three years, Mohonasen has enacted almost $7 million in budget cuts and efficiencies. These have included cutting teacher, administrative and support staff positions; across-the-board budget cuts in areas including operations and maintenance, technology and athletics; and employee contract concessions. Here’s a little historical perspective:

  Year	Budget Total	State Aid Picture	Enacted Budget Cuts	Tax Levy Increase	Spending Increase	Employee Concessions
  2011-2012	$42.9	$3.4 million decrease in state operating aid	$2.7 million in budget cuts, including more than 34 teaching, administrative and support staff positions	2.5%	0.43%	Salary and other concessions by all four district bargaining units, saving more than $525,000 and eight positions that would have otherwise been eliminated.
  2010-2011	$42.7	$1.9 million decrease in state operating aid	$2.5 million in budget cuts, including more than 15 teaching, administrative and support staff positions	2.3%	0.8%	Freeze to supervisor/administrator salaries; Concession of two professional development days from teachers’ bargaining unit.
  2009-2010	$42.4	$366,340 increase in overall aid (this included federal stimulus funds)	$1.5 million in budget cuts, including more than 12 teaching, administrative and support staff positions.	0.59%	1.068%	District and union officials were negotiating current contracts at this time.

• While state leaders have projected a 4% increase in state education aid for the 2012-13 school year, they are also looking at a roughly $2 billion state budget gap.
• Federal stimulus money for education – part of President Obama’s American Recovery & Reinvestment Act of 2009 – runs out at the end of the current school year. This will leave a more than $800,000 gap in Mohonasen’s budget. As a best-case scenario, district leaders expect that any increase in state aid will go toward filling this gap.
• At this time, the Mohonasen rollover budget for 2012-13 is projected to be $46.2 million (this would mean carrying over ALL current programming). This is $3.32 million higher than the current year’s $42.9 million budget. Most of this increase is caused by the loss of federal stimulus funds and increases in the state-mandated employer contributions to both the employees’ and teachers’ retirement funds.
• Beyond the outright loss of revenue, state aid continues to be a major source of uncertainty for New York’s school districts. Districts have experienced delays in various aid payments over the last few years and the state’s fiscal condition continues to be on shaky ground. In addition, the Governor has said he would propose two new incentive funding pools for state aid. The first of these—a Performance Improvement Grant—has been released at this time and Mohonasen is working to apply for the funding.
• As the result of legislation signed into law by the Governor last June, New York schools and municipalities now have a property tax levy “cap.” The new law creates a threshold – calculated by a complex 8-step formula – that dictates what level of voter support is needed for a school budget to pass. A budget with a tax levy increase at or below the threshold requires a simple majority vote for approval (50%+1) and a budget with a tax levy increase above the threshold requires a super majority vote for approval (60%). Because of the formula used to calculate this threshold, every district will have a different “cap.” Not all of the information needed to calculate the threshold is currently available, so Mohonasen officials are projecting the district’s cap will be between 3.35% and 4.24% (these figures include all exclusions to the “cap” allowed under the new law).
• Along with the new tax “cap” law comes a significant new contingency budget requirement. If a district’s budget is not approved by voters, the district has two options: adopt a contingency budget or go for another vote with the same or a revised budget. If the budget is not approved a second time, the district MUST adopt a contingency budget. Aside from certain spending restrictions, this means that a district would not be able to increase the tax levy over the current year – essentially a 0 percent tax cap. In the past, this cap was set at the lesser of 120 percent of the Consumer Price Index (CPI) or 4 percent.
• The new tax “cap” law also contains a number of what are being called “mandate relief” measures. However, these do not address the major cost drivers for school districts and school leaders say these measures will result in very little – if any – relief.
• It has become clear that the state funding formula affects districts with a low combined wealth ratio (CWR is a state calculation based on property wealth) in a disproportionate manner. Mohonasen has a CWR of .652 and the statewide average is 1 – this means that Mohonasen is on the poorer end of the spectrum. As a result of the formula, district’s like Mohonasen tend to feel cuts in state aid more.
• Mohonasen’s taxpayers are facing sustained poor economic conditions, including years without an increase in Social Security benefits and a continuing trend of declining STAR benefits.
• School district costs continue to rise. These include contractual expenses, like salaries and benefits, or those beyond the district’s control, like energy and general operations. Employer pension contributions have been high for the last few years and will remain high for 2012-13. Contributions for the Employees’ Retirement System will increase by more than 12 percent, while contributions for the Teachers’ Retirement System will increase by 17 percent.
• For years, Mohonasen’s per pupil spending has been among the lowest in the state. This is partially due to the number of proactive measure that officials have enacted through the years, including health insurance cost containment; not filling vacant positions unless absolutely necessary; maintaining facilities to maximize efficiencies where possible; sharing and consolidating resources/services with BOCES, other school districts and the town; and eliminating all inefficiencies where possible.

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