Proposed school district budget to use $2.5M in reserves
Despite the essentially flat tax cap for the 2016-2017 budget year, the Rye City School District superintendent presented a proposed budget on Feb. 9 that is balanced thanks to the use of $2.5 million from the reserve fund.
Under this year’s state tax cap, schools are limited to increasing upcoming budgets by 0.12 percent. Statewide, school districts are struggling to accommodate the tax cap, which is tied to the inflation rate and not 2 percent. The tax cap law mandates either a 2 percent tax cap on either the allowable tax levy for municipal and school budgets or the rate of inflation, whichever is lower. This year, the rate of inflation is just 0.07 percent.
The draft budget calls for $85 million in spending, compared to the current budget, which is $83 million. The estimated tax levy increase is 1 percent.
The reserve fund currently stands at approximately $10.2 million, which is 12 percent of the 2015-2016 total $82.8 million budget. With the use of $2.5 million for the 2016-2017 budget, the fund reserve would decrease to $7.7 million, about 9 percent of the total $85 million proposed budget. Generally, in order to qualify for AAA bond rating, a district reserve is supposed to be at least 4 percent of a district’s total budget.
The proposed budget will preserve the current school program, add both a part-time math teacher and a part-time Spanish teacher and will continue the writing mentor program for grades 10 through 12. It will also add a full-time Project Lead the Way instructor for the high school science, technology, engineering and math, STEM, curriculum.
Project Lead The Way provides a standardized curriculum for some STEM classes. Both STEM and Project Lead The Way are programs under the umbrella of the federal Race to the Top initiative, which was funded as part of the American Recovery and Reinvestment Act of 2009.
The goal of the STEM program is to add classes in math, science and computer technology to high school curricula and to encourage students to pursue careers in these fields.
Superintendent Dr. Frank Alvarez said the proposed budget is solid. “My main assumption was to have no cuts and that we keep to our promise not to go over the [tax] cap,” he said.
Board of Education President Katy Keohane Glassberg characterized the proposed budget as an attempt to maintain the program and make improvements with very little additional money.
While the community is likely to meet news of the balanced budget with some relief, the use of a higher amount of reserve funds is just as likely to cause consternation for some Rye residents.
Jim Culyer, a longtime resident and former school board president, expressed disappointment at news of the higher reserve fund figure for the proposed budget.
“In my opinion, the Board of Education is going in the wrong direction,” Culyer said. “Fund balance needs to be preserved, not used to balance the operating budget. I really believe that the current tax cap legislation is just wrong.”
Other board members had more sobering news.
Board members Karen Belanger and Chris Repetto brought up the possibly of another override vote for the 2017-2018 school budget.
On May 19, 2015, the Rye community passed the current budget that exceeded the 2 percent tax cap, totaling a 4.43 percent override, with support totaling 70 percent of the vote. An override requires a 60 percent majority of the voting public.
“We need to start talking openly about an override for next year,” Belanger said. “We’re getting to the point where the reserves are at a much more worrisome level.”
But it’s possible that the funding situation might change for the better in the next few years as well, district officials said. Gov. Andrew Cuomo, a Democrat, has hinted at increasing state aid over the next few years. There is also talk of adjusting the 2 percent tax cap to a true 2 percent cap without the current formula that decreases it to less than that level in nearly every district.
There also may be more state aid on the way if the throttle on Gap Elimination Adjustment, GEA, funds either eases or is released. Passed in 2011, the “emergency” one-year formula decreases aid using a formula that decreases funding for all districts. Some districts are “owed” as much as $3 million in GEA funds. The adjustment has been in place for five years.
“Right now, there are a lot of ifs,” said Sarah Derman, the school district’s chief information officer. “Things could get better. It’s too soon to tell.”
On March 8, the school board will host an open topics forum for the community; budget adoption is set for the April 12 meeting and the public vote is scheduled for May 17.