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District facing budget gap between $642,000 and $1 million

february 14, 2013

Schuylerville is facing another year of extreme challenges as district officials work through the process of developing the 2013-2014 budget proposal to present to voters in May. Based on Governor Cuomo's proposed state budget and taking into consideration the projected increases in health insurance costs and state mandated contributions to the Teachers Retirement System (TRS) and Employee Retirement System (ERS), Schuylerville is looking at a budget gap between $642,000 and $1 million. "This range of numbers represents the difference between what we predict our maximum allowable tax levy will be under the state's tax levy cap, which is an increase of 3.09 percent and the preliminary budget as it stands now, which would result in a tax levy increase of 7.04 percent," explained Business Manager Wendy Morris.


The state's 2011-2012 tax levy cap legislation limits the tax levy increases that a district can impose on taxpayers if the school budget is approved by a simple majority of voters (50 percent "yes" votes, plus one). Districts can go above their tax levy limits if 60 percent of voters (supermajority) approve the budget proposal. "This legislation also limited school districts to two votes on a school budget," Morris said. "If the budget is voted down twice, the district can have no increase in its tax levy."


This means Schuylerville and districts across the state have to plan for the worst-case fiscal scenario—a 0 percent tax levy increase, which, in turn, leads to the need to hand out pink slips to all staff members who could potentially lose their jobs. In Schuylerville, more than a dozen staff members received notice that their jobs are in jeopardy for the 2013-2014 school year. "We don't anticipate that all the people who received pink slips will lose their jobs, but we are forced to give them notice in the event that our budget is voted down twice and we aren't permitted to increase our tax levy," said Superintendent Dr. Ryan Sherman.  


Sherman also pointed out that educational programs may also be cut for the first time. "It's possible that we will see program cuts rather than reductions in the coming school year—something our educators and the Board of Education certainly don't want to do. However, a number of circumstances will likely force the situation."


History of Schuylerville Aid Lost to
Gap Elimination Adjustments
2010-2011 —$1,204,394
2011-2012 —$2,253,540
2012-2013 —$1,864,368
Total to date —$5,322,302
2013-2014 (proposed) —$1,652,988

(Source: New York State Council of School Superintendents)

Loss of aid

While Schuylerville is tentatively slated to receive an increase in state aid for the 2013-2014 school year (around $500,000), the additional aid is offset by increasing costs (discussed below) and the state's continued use of the Gap Elimination Adjustment (GEA). GEA is money that is deducted from state aid originally promised to school districts based on state aid formulas; essentially, it's a "take-back" by the state. GEA legislation was introduced for the 2010-2011 fiscal year as a way to help close New York's then $10 billion budget deficit. Since that time, Schuylerville has lost more than $5.3 million in aid under GEA legislation and is projected to lose another $1.65 million next year.


increases in health insurance costs

Employers across the country are dealing with unprecedented increases in health insurance premiums and schools are no different. What was once an affordable benefit is becoming increasingly unmanageable for businesses and school districts due to rising health care costs. For Schuylerville, health insurance costs increased an average of 10 percent over the last two years. For the 2013-2014 school year, similar increases are forecasted; this would mean $640,000 in added expenditures for the district. See the chart below for a comparison of costs to the district in 2001-2002 versus 2012-2013.


Cost to District for Health Insurance
  year cost
Family PPO Plan 2002-2003 $8,010
Family PPO Plan 2012-2013 $20,946



increases in required contributions to retirement systems

The New York State Teachers Retirement System (TRS) and the New York State Employee Retirement System (ERS) have three sources of revenue: employee contributions (fixed), employer contributions (set by the state) and investment returns on these contributions (based on the stock market). Both pension systems were established by the legislature, but ERS is administered by the state comptroller, while TRS is administered by the New York State TRS Retirement Board. Under the current funding structure for TRS and ERS, employers have to compensate for any stock market losses, meaning these benefit costs are subject to a great deal of fluctuation and uncertainty. [see related article]

For the 2013-2014 school year, ERS contributions are jumping to 20.9 percent of employees’ salaries and TRS contributions are increasing between 15.5 and 16.5 percent. For Schuylerville, this required increase is expected to mean $543,000 in added expenditures. See the chart below for comparison information showing the differences in the district's contribution rates between 2002-2003 and 2012-2013.

Teacher Retirement System (TRS) Cost Increases
  year salary trs cost to district
Teacher X 2002-2003 $46,993 $169
Teacher X 2012-2013 $84,924 $10,055

looking back: painful cutbacks already made

Schuylerville Budgets
2010-2011   $32,174,468
2011-2012   $30,974,357
2012-2013   $30,973,314
Reductions in General State Aid
2010-2011   $850,000
2011-2012   $1,200,000
2012-2013   $186,000
Loss of District Positions
4 Teaching positions
1 Guidance counselor
2 Non-teaching positions
0.5 Administration
3 Teaching positions
3.2 Non-teaching positions
9 Teaching positions
7 Non-teaching positions
1 Administration
 which is 11% of teaching staff & 17.5% of Administrative staff since 2010

Tax Levy Increases
2010-2011   0%
2011-2012   0.9%
2012-2013   2.74%
(under property tax levy limit)
Three-year Average   1.21%
2010-2011   1,816
2011-2012   1,782
2012-2013   1,783
Over the last several years, Schuylerville has made staffing cuts and reductions in educational programs to eliminate budget gaps and reduce the tax burden on local residents. Since the 2010-2011 school year, spending has dropped by more than $1.2 million and nearly 20 jobs have been cut (including 16 teaching positions, 3.2 non-teaching positions and 1.0 administrative position). The chart at the right gives an overview.