With no clear path to budget revotes this year, the threat of New York’s contingency budget rules loom over school districts like never before.
Those rules – which go into effect if a district fails to win approval for its budget from district residents before the July 1 start of the new budget year – require districts to keep their tax levy flat while implementing a myriad of spending restrictions on everything from student field trips to public use of school facilities.
As district officials and school boards finalized budget proposals in recent weeks, they have constrained tax levy increases to ease public passage and pointed to the downside risk of contingency budgets as they considered whether to cut positions and programs or ask the community for more tax dollars.
If residents reject budgets up for approval on June 9, districts will likely have no choice but to adopt contingency budgets that would force massive funding cuts, layoffs and draconian spending restrictions.
When Gov. Andrew Cuomo issued an executive order postponing annual school budget and school board elections to June 9 and established the election as mail-in ballot only, he did nothing to move the date for a second vote. In a typical year, budget votes fall on the third Tuesday of May, with an opportunity for districts to propose a new budget if the first is rejected that goes up for voter approval in mid-June.
So districts have been working under the assumption that there will be no chance for a second budget vote, raising the specter of the contingency budgets, which many school officials see as a worst-case scenario.
“There is added concern that more school districts will have to adopt contingency budgets due to a lack of a revote,” said Michael Borges, executive director of the New York state Association of School Business Officials, noting they are usually a rare occurrence with a small handful of districts falling back on contingency budgets in any given year.
A contingency budget would mean different things for different districts, with those asking for the largest tax levy increases likely having to cut the deepest if their proposed budget fails. For instance, in the Rensselaer City School District, which faced enormous fiscal challenges prior to the pandemic, the school board is seeking approval for a nearly 20 percent levy increase, an effort to raise over $1 million, as officials look to stabilize its finances with a major boost to the local levy.
District officials there said if the budget is rejected they would fall back on a contingency budget, “eliminating athletics, eliminating electives, eliminating extracurriculars, eliminating math and reading (supports).” And that would be just the start of the additional cuts.
“Even then, that’s just under $1 million, it won’t be enough to balance the budget,” Meghan Heimroth, the district’s business official said during a recent budget hearing. “We will probably be looking at even further cuts if the budget doesn’t pass.”
In Niskayuna, a contingent budget would leave the district’s tax levy at its current level – $58.4 million – and force district officials to cut over $1.2 million out of the proposed budget. That would mean about 16 positions would need to be eliminated; those would likely including some positions the school board spared by spending down a significant chunk of the district’s savings in its proposed spending plan.
Amsterdam school officials also raised the threat of a contingency budget in urging local residents to support the proposed budget, which already eliminates the equivalent of 28.5 staff positions, including eight layoffs. Districts officials there said the loss of new tax levy revenue – over $600,000 – would be roughly equivalent to the cost of the district’s athletic program, suggesting there would be no athletics or extracurricular activities under a contingency budget.
“Without a positive vote, it’s going to be impossible to reinstate any of these programs,” Amsterdam Interim Superintendent Raymond Colucciello said when the board adopted its budget proposal.
While the elimination of althletics is not required, state law places a litany of other spending restrictions on districts operating under a contingency budget.
The law mandates districts keep their levy flat – since the public has not approved an increase – and fund only the minimum services required to meet the district’s legal obligations. Districts would be barred from providing public access to its facilities, supporting student field trips, purchasing non-essential equipment, funding consultant services and giving any pay raises not already spelled out in a contract, under a contingency budget.
Teacher pay raises already agreed to in collective bargaining agreements would still go through, along with other rising costs, forcing districts to make cuts that go beyond just the legal funding restrictions.
“There are contractual expenses that go up every year, those expenses are exempt from contingency but would have to be paid for another way,” Borges said. “In order to pay for contractual expenses, they have to cut (spending) in other ways.”