JOHNSTOWN — The school board for the Greater Johnstown School District received the sobering news Thursday night: Even a tax-cap busting 8 percent tax levy increase for the 2021-22 school year won’t prevent the district from exhausting its fund balance reserves and returning to a deficit by 2025-26 school year, without continued large tax increases.
“The fiscal crisis is ongoing,” reads part of a 28-page budget synopsis provided to the board. The document included a projected $40.7 million 2021-22 school budget, with a 4.3 percent year-over-year spending increase of $1.7 million and a proposed tax levy hike of 8 percent — an increase of $1.8 million.
The school board resumed in-person meetings Thursday night for new district Superintendent William Crankshaw’s first budget presentation. All participants were required to wear masks. Few, if any, members of the public outside of the news media attended the meeting.
“This has been 11 months in the making,” board president Chris Tallon said to open the meeting. “We fumbled our way through the online sessions, at the end we were getting really good at them, now we’re going in-person, so this is one step closer to getting back to normal.”
Normal for the Johnstown school district hasn’t been very good in recent years, as the district has struggled to eliminate an annual budget deficit that was $4.3 million for the 2019-20 school year.
During the 2019-20 school budget process, Johnstown school officials had projected the school would need three consecutive 14 percent tax levy hikes in order to dig the district out of its financial hole — but since then voters have not approved those increases.
During the 2019-20 budget process the school board proposed a 35-percent tax levy increase to eliminate the deficit, including with it a threat to eliminate all school funding for afterschool athletics and extracurricular activities, but the proposal failed to get the 60 percent of votes needed to break the state tax cap. Johnstown had a very large property tax cap of 14.6 percent that year and were able to get a 14.6 percent tax levy increase with only a majority vote during a revote. District parents and community members then conducted an unprecedented $311,000 private fundraising campaign to save its sports teams.
For the 2020-21 budget vote the school board proposed two tax-cap breaking 5-percent tax levy increases. During the first vote, conducted only by mail due to the coronavirus pandemic, the district failed to get the 60 percent of votes needed, but then put the same budget up again for an all in-person vote July 28, which received 65 percent budget approval. The budget vote has been criticized as being less friendly to the health dangers posed by the coronavirus pandemic to the elderly than the earlier all-mail vote.
The 19.6-percent tax levy increase over a two-school-year period, combined with a 25-percent reduction in staff and the closing of two school buildings — Glebe Street Elementary and Knox Junior High School, now converted to an administration building — have together combined to boost the district’s unallocated fund balance reserves of unspent tax revenues to $13.2 million, but the projected annual increases in expenses and revenues will keep Johnstown with a growing budget gap every year going forward.
Crankshaw told the board that, barring significant increases in state school aid, the school district is still looking at the need for large tax increases between the 2021-22 school year and 2025-26.
Crankshaw’s revenue and expense projections show that if voters agreed to an 8 percent, $1.8 million property tax levy increase for 2021-22, but then kept annual tax levy increases to 2 percent or less for the following four school years — Johnstown will have run out of reserves and have a $2.7 million budget deficit for the 2025-26 school year.
The projections assume annual state aid revenues increase normally.
Cranshaw said there is reason to hope the state will restore the $440,000 lost in school aid from 2020-21. He said the district will know by the passage of the state budget whether a potential $300,000 increase in state school aid for 2021-22 will be forthcoming.
School Board member Ron Beck asked what would happen if Johnstown spent all of its fund balance reserves. “Can we operate with zero fund balance?” Beck asked.
“We can not, should not, ever, operate with zero fund balance,” Crankshaw said.
School board member Susanne Fitzgerald asked about the potential impact of the $2.5 million in federal funding allocated to Johnstown as part of the $1.9 trillion coronavirus aid package passed by Congress and and signed by President Joe Biden.
Johnstown’s federal aid is part of $9 billion set to go to New York state school districts from the massive spending bill. Johnstown will get about $1,725 per student.
Crankshaw said he knows the public has become aware of the federal aid spending through news coverage of it, but district administrators have not yet been told how the money will be spent and what strings may be attached to it.
“We don’t have a good handle on how that’s going to impact the budget at this point,” he said.
Crankshaw said Johnstown spends about $19,428 on each of the district’s 1,639 students per year, still less than other similar-sized districts that spend on average $23,508 per student or the state average of $25,853 per student. Johnstown’s spending per pupil is roughly comparable to other neighboring school districts: Amsterdam (3,468 students, $19,940 per student), Broadalbin-Perth (1,686, $19,762 per student), Fonda-Fultonville (1,309 students, $20,936 per student). Gloversville has 2,586 students and spends $22,043 per student.
Crankshaw said the proposed tax levy increase of $1.8 million is mostly due to $1.2 million in staff salary increases and a projected $383,898 year-over-year cost increase in employee benefits.
He’s proposing four additional staff members in his budget: two academic intervention services teachers, costing $160,000; one elementary art teacher, costing $80,000; and one secondary mathematics teacher, able to teach advanced placement computer coding classes, at a cost of $80,000.