Preliminary proposed 2018-19 spending plan may eliminate up to 12 positions, keeps tax levy at limit
The Board of Education reviewed a draft of the proposed Mohonasen Central School District 2018-19 spending plan at its March 19 meeting.
The proposal totals $53,851,210, which reflects an increase of $2,911,210 over the current year. It also proposes a tax levy increase 3.21 percent or $850,146, which is at the district’s allowable tax levy limit.
In addition, the proposal includes the potential elimination of up to 12 positions – administrative, teaching and support staff – in order to close a $900,000 spending gap in the year-to-year rollover budget. The rollover budget assumes that all current programs are continued into the 2018-19 school year, and does not include retirements.
“The district has not been in a position like this in several years,” said Assistant Superintendent for Business Chris Ruberti.
After reducing staffing by nearly 80 positions between 2009 and 2015 due to challenging fiscal times, the district has worked to incrementally restore about 43 positions since that time over the past three years as state aid improved.
Much of the $900,000 budget shortfall can be attributed to larger-than-usual hikes to health insurance and an increase in teachers’ retirement system (TRS) contributions.
“Some of our major costs include salaries in the district, and we have a good sense of how those will change from year-to-year,” said Ruberti. “However, there can be considerable volatility with health insurance and TRS rates. For example, in the last four years, we’ve gone from a $750,000 decrease in TRS contributions in 2015-16 to an expected $250,000 increase in contributions in 2018-19.”
Ruberti noted there are several factors the board can consider in addition to the elimination of positions in order to present a balanced budget to voters, including the use of fund balance and reserves. However, when taking a long-term view of the district’s financial future, this is not what the superintendent’s team recommends.
“In the past, the board has opted to use additional fund balance in situations where there is a shortfall of revenue to avoid cutting positions and programs,” said Ruberti. “However, that has been done when there is an indication that the shortfall is somewhat temporary.”
Ruberti said the issue with using fund balance is that it’s not replenished. “Just as in our personal savings accounts, using these funds for an ongoing cost is difficult, especially when those costs increase each year, such as is the case with salaries. If you’re drawing down from that every year, and the amount you’re drawing down increases every year, it can obviously only last for so long,” he said. “The bottom line is that using fund balance to mitigate an ongoing shortfall because the state is not honoring its commitment to distribute the foundation aid that the district is due is an equation for insolvency over the next five to seven years. ”
Ruberti noted that budget numbers are not quite final as there are still some unknown factors, such as staffing changes and final state aid totals.
He noted that the district is currently in the midst of contract negotiations with the Mohonasen Teachers’ Association (MTA).
“We’ve been working with the MTA to look at a retirement incentive and determine if that might be appealing to some people,” he said. Retirements would represent savings to the district because a replacement would typically draw a lower salary or even no salary if a position is not filled due to attrition.
Ruberti said state aid figures could still change, as lawmakers continue to finalize the state budget. “We’re hopeful that the district will get additional money, but we don’t know yet if we will or how much,” he said.
TRS and health insurance
Ruberti explained that TRS contributions are significantly impacted by the performance of the stock market, and that the district is self-insured for much of its health benefits. Although being self-insured has helped minimize increases over the past several years, the district has seen a spike in these costs for the past two budget cycles.
The district also looks at the tax levy in balancing its proposed spending plan. Mohonasen has traditionally sought to set a tax levy at or below the allowable tax levy limit so as to maintain staffing and programs but also minimize the impact on taxpayers.
For school districts, the tax levy limit is the highest allowable tax levy (before exclusions) that a school district can propose as part of its annual budget and need the approval of only a simple majority of voters (50 percent plus 1) to pass the budget. If a district proposes a budget with a tax levy amount (before exclusions) above this limit, it will need the approval of a supermajority of voters (60 percent) to pass the budget.
As previously mentioned, Mohonasen’s allowable tax levy limit for 2018-19 is 3.21 percent.
Budget development timeline
The board is slated to adopt a proposed spending plan at its April 16 meeting. The annual district budget vote will be held on Tuesday, May 15, 7 a.m. to 9 p.m. Voting is held at the Mohonasen High School gym. Also on the day residents will elect three members to the Board of Education and vote on a proposed bus purchase proposition totaling $1,072,500.
The board will continue to review the proposed spending plan over the coming weeks as follows:
April 16, 2018: Budget Adoption
May 7, 2018: Budget Hearing and Meet the Candidates Night,
May 15, 2018: Uniform Budget Vote Day – District Annual
Meeting & Election, 7:00 am to 9:00 pm/High School
June 4, 2018: Board of Education Meeting – Acceptance of
Results of Election of May 15, 2018
Assistant Superintendent for Business Chris Ruberti shared the following PowerPoint presentations with the Board of Education on the date listed. If you are unable to access these documents, please contact the district office at 518-356-8200.