A state academic performance grant, a small state aid increase and the maximum tax increase allowed under the state tax cap might shrink the Mohonasen Central School District’s potential budget gap for the 2013-2014 school year to less than $500,000.
Just maintaining the current programs and staff would result in more than a $2.5 million increase over this year’s roughly $44 million spending plan, according to district Business Administrator Chris Ruberti.
However, some additional revenue is brightening the budget picture. Last year, Mohonasen received a School District Performance Improvement grant from the state — $600,000 a year for three years, which the district is using for its vocational programs such as criminal justice, media arts and construction trades. This money brings the shortfall down to $1.96 million.
School officials are also factoring in receiving $252,000 in additional state aid under Gov. Andrew Cuomo’s proposal and tapping into $300,000 of its debt service and general reserves, which brings the total shortfall down to $1.4 million.
If the district approved a tax increase up to the cap limit, which is 4.1 percent this year in Mohonasen, it could raise another $945,000 in property tax revenue and bring the shortfall down to $464,000. The exact figure for the tax cap varies by district under a complicated formula that includes exemptions for increases in pension costs above a certain amount, payments-in-lieu-of-taxes agreements and factors of growth in the tax base.
Despite this good news, Ruberti said the problem is that the easier budget reductions have been made during the last three years. “There’s nothing left to cut,” he said.
The deficit amounts to seven or eight full-time teaching positions, according to Ruberti. However, it is still early in the process and the final state aid amounts won’t be known until the state budget is approved. “Our gap could be anywhere from half a million to a million or more,” he said.
He said the biggest cost drivers are retirement, health insurance and contractual salary increases. Health insurance is increasing anywhere from 10 percent to 12 percent, depending on the individual plan, which adds $500,000 in costs. Teacher retirement costs are adding $750,000 to the budget, according to Ruberti.
In addition, this is the first year that the district will have to start paying off debt from the roughly $21 million capital project voters approved in 2007. The debt had been carried in bond anticipation notes, short-term temporary financing until the permanent bonds are issued.
“It’s about a $400,000 increase in the debt,” he said.
District officials say they have already made more than $6 million in budget cuts and eliminated more than 70 full-time equivalent teaching, administrative and support staff positions in the last three years. Mohonasen has lost more than $9 million in state funding during that time because of the “Gap Elimination Adjustment,” which the Legislature has used to balance its budget.
The Board of Education is expected to adopt a budget proposal by April 23 for district residents to vote on May 21. The district plans to schedule some budget forums in March.