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2012-2013 Newburgh Enlarged City School District Budget Process PowerPoint Presentation
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2012-2013 Newburgh Enlarged City School District Budget Process

2012-2013 Newburgh Enlarged City School District Budget Process

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2012-2013 Newburgh Enlarged City School District Budget Process

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  1. 2012-2013 Newburgh Enlarged City School District Budget Process and the limitations caused by the enactment of the New York State’s Property Tax Cap Law

  2. Clarification of the new tax cap law • The cap is not absolute – Budgets can exceed the cap if approved by at least 60% of the voters (that actually vote) • The cap will seldom be exactly 2% - There are exceptions and allowances that could make the cap higher and vary from year to year • A simple majority of voters will have the power to block any tax increase – If the vote is defeated twice, districts must FREEZE the levy

  3. In other words…… • If State aid stays the same, that 2.63% increase allowed for taxes amounts to only a 1.17% increase to the budget • For this reason, the new legislative cap by the Governor and endorsed by the legislatures is unfair for low wealth high need Districts

  4. So what does the aid picture look like? • The Governor placed an additional $800m into the state budget for education. • He stated that the highest need districts will benefit. • And oh by the way, the Federal Jobs Fund allocation of $3,049,969 to Newburgh ends after this year causing the general fund budget to absorb an additional 25 positions!

  5. What do those numbers mean for budgeting? Preliminary 2012-2013 Budget 240,800,552 Less local Revenue (5,300,000) Less BOE use of fund balance (2,000,000) Less Governor’s aid proposal (119,659,095) Taxes needed to support the budget 113,841,457 Less: Tax Cap Allowed by Law 100,133,430 CURRENT BUDGET GAP 13,708,027

  6. Major increases to the budget (roughly $20m) • NYS ERS contribution $ 1,679,880 • NYS TRS contribution $ 3,153,189 • Medical Insurance $ 5,782,510 • Debt Service $ 3,366,820 • Salaries $ 6,120,476 (Federal Jobs fund allocation of $3,049,969 from the government ended. A few positions were added during the year, mainly for special education purposes. The balance of the increase in salaries are based on NYS Triboro laws and are contractual)

  7. So what now? • As you can see, it is mathematically impossible to reduce the preliminary budget without effecting programs and eliminating positions. • The Superintendent will deliver a budget to the BOE that will contain the best possible educational program for the students. It is not likely that this budget will fall under the allowable cap. • The BOE will then have the opportunity at a full BOE budget workshop to review these recommendations for further discussions. The BOE will then have the daunting task of completing the budget to be put before the voters on May 15. • This is not new for most of them. Over the past couple of years, this District has experienced a reduction of staff and programs due to the financial constraints these economic times have given us.

  8. To illustrate…….

  9. Other options available • The BOE could adopt a budget that exceeds the cap and hope for a 60% approval rate. However; the language that must appear on the ballot is “Adoption of this budget requires a tax levy increase of __% which exceeds the statutory tax levy limit of __% for this fiscal year and therefore exceeds the state tax cap and must be approved by 60% of the qualified voters present and voting.” • Put up separate proposition(s) for certain programs. This is a new provision provided by the tax cap law. The vote would still have to carry a 60% approval rate if the proposition(s) would cause the cap to be exceeded and would have to contain the above language.

  10. Common Q and A’s • Will my tax bill be at or below the allowable 2.63% rate? No. The cap is on the total levy, not individual tax bills • In the past, defeated school budgets could be replaced by contingent budgets that raised taxes even higher. Does the new tax cap change this? Yes. Under the new tax cap law, a contingent budget cannot result in a tax levy increase. Therefore, an additional $2,569,159 reduction to the budget must occur. • Can I offer any suggestions to assist in the development of the budget? Yes. A link on the district’s website has been developed and all comments will be evaluated. The website address is: Newburghschools.org