The 2012-13 financial outlook for the Skaneateles Central School District is bleak and uncertain due to insurance and benefit increases, loss of state and federal aid and the new state tax levy cap.
This was the message given to the board of education at its Dec. 6 work session by Dale Bates, assistant superintendent for business and finance.
“We’ve already taken out [of the budget] almost everything we can that doesn’t affect instructional programs, so come next year there will be some hard choices to make,” Bates said.
Bates’ presentation to the board was on the tentative assumptions for the 2012-13 district budget in order to maintain current programs.
The tentative budget for next year is $29,629,197, an increase over last year of $608,440 or 2.1 percent.
The budget numbers are difficult to estimate, however, because so much of the content is unknown, Bates said.
There are three expired labor contracts and a transportation contract extension not yet completed, and potential increases in health insurance and employee benefit costs. The district is scheduled to lose more than $300,000 in federal jobs money and the projected 4 percent increase in state aid is “basically off the table” because of the state’s huge budget shortfalls, although that will be decided soon by the state legislature, Bates said. The new state tax levy cap and continued decreases in county sales tax also will limit the revenues coming in to the district.
In order to maintain the current budget, the school district needs a tentative revenue increase of $608,440, Bates said. The 2 percent tax levy cap would allow the school to raise $423,000, but the district’s recent use of $425,000 from its reserves to reduce the tax levy last year basically negates the revenue.
However, because of the uncertainty of the numbers, that needed revenue increase could be more or less than currently projected, he said.
In order to make up the possible budget shortfall, the district can either use money from its reserve funds or make more cuts. Taking money out of the reserve funds is a dangerous move that could put the district in serious financial trouble, Bates said.
Superintendent Phil D’Angelo said he recently saw a report anticipating that 10 to 15 percent of school districts in New York state will go bankrupt next year precisely because they used up their fund balances.
“Our district is in better fiscal shape than most school districts,” D’Angelo said, but added, “We are very concerned about our financial picture. I cannot image how other districts in poor fiscal shape will navigate successfully through the next year.”
As for budget cuts, the Skaneateles district has cut more than $1 million in the past two years, including some teacher and support staff position reductions. The dire financial outlook for 2012-13 could necessitate more teacher and staff layoffs, Bates said.
“It’s too early to know for sure, but it could be,” said Board of Education President Evan Dreyfuss. “There will have to be a cut in expenditure, I just don’t know how were going to fund it. It could be using our reserves, could be early retirements in staff potentially or we could cut programming, which could include teachers.”
In addition to difficult finances, the district also is facing continued decline in student enrollment, Bates said.
Enrollment has dropped every year for the past five years, with the 2012-13 numbers expected to be 1,534 total enrollment, Bates said. By 2017, the total student body is expected to be down to 1,431. The decline is the result of more families moving out of town than into town, and smaller family sizes in general, he said.
The “significant impact” of this steady decline could be reductions in class sizes, in class offerings and possibly even the closure of one of the district’s school buildings, Bates said.
Jason Emerson is editor of the Skaneateles Press. He can be reached at [email protected].
