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District faces $1.2M budget gap

Jan. 26, 2016

The 2016-17 budget development process got underway in earnest Monday night with the Schalmont Board of Education.

Schalmont Business Administrator Joseph Lenz and Superintendent Dr. Carol Pallas presented an overview of the state of the district’s 2016-17 budget development, as well as additional factors that will play a financial role in the process. [view PDF of presentation]

As with most schools, the first step in constructing a new school budget at Schalmont is to create a "rollover" budget. A rollover budget assumes the district will keep all programming and staff exactly as it is and budgets for any known increases in salaries and pensions, while making projections for items such as energy, health insurance, etc. for the next year. This now becomes the preliminary or working budget and serves as a starting point for discussion.

The working budget for the 2016-17 Schalmont school year totals $47,130,047. At this point, these numbers still include preliminary numbers or estimates for several factors including state aid, the Gap Elimination Adjustment (GEA), health care costs, insurance premiums, etc.

Currently, the district stands to lose nearly $500,000 to the GEA, while receiving only slightly more than a $2,000 increase in foundation aid from the state.

Another major influencer on the district’s budget is the imposed property tax levy limit or “cap.” The property tax levy growth for school districts will be limited by a 0.12 percent increase above current levels for the 2016-17 fiscal year, according to State Comptroller Thomas P. DiNapoli. The CPI plays into the governor’s tax levy limit formula. The tax levy limit, which was instituted in 2012, limits tax levy increases to the lesser of the rate of inflation or 2 percent with certain exceptions. Under this calculation, Schalmont is looking at a potential allowable levy increase of 0.37 percent, or $100,000.

Once the levy increase limit is accounted for in the working budget, Schalmont officials are looking at a budget gap of $1.2 million.

This may change when the legislators adopt the official state budget. Several legislators have vowed to end the GEA for the 2016-17 school year, which would reinstate nearly $500,000 in aid to the district. In addition, there is also a call to fix the foundation aid formula so that it is fair and equitable to all public schools. That could also result in additional aid being awarded to Schalmont. The deadline for adoption of the state budget is April 1.

However, until the state budget is adopted, the district must continue the budget development process based on current information. That leaves the board facing the tough decision as to how to close the budget gap.

There are essentially three ways to accomplish this: the board can choose to either cut spending, increase revenue by exceeding the tax levy limit or a combination of both.

If the board were to consider exceeding the tax levy limit, a super majority of 60 percent would be needed to approve the district’s proposed budget.

The annual school district budget vote will be held Tuesday, May 17 from 6 a.m. to 9p.m. in the High School New Gym Lobby.

Get Involved

Residents are encouraged to attend Schalmont Board of Education meetings, where there will be ongoing budget discussions. The next board meeting will be Feb. 8 at 7 p.m. in the Middle School LGI.

Community members are also invited to join the Budget Advisory Committee. The first meeting will be Thursday, Jan. 28, 6 p.m., Middle School LGI.

Consider becoming an advocate for Schalmont Central School District and other public schools by contacting your representatives. Let them know you support ending the GEA for the 2016-17 school year and that you want a foundation aid formula that is fair and equitable to all schools.