We continue to hear about the precarious financial condition of the state. There is a huge budget deficit that must be addressed. We also continue to hear about a federal deficit, the scope of which is almost unfathomable. Those budgets are significant sources of revenue for public education. In New York State, local taxpayers represent the third and often the major source of revenue for public schools. The fatigue taxpayers in New York State have been feeling is understandable as is the rationale for a proposed property tax cap, but taken together, it may be what many are calling the perfect storm for public education.
State aid for education has been declining over the last two years. That reduction was mitigated by the state when federal stimulus funds (ARRA) were used to offset the planned reduction. Those ARRA funds expire in June 2011 and will not be renewed based upon the federal fiscal challenges.
The reduction of state aid, loss of federal money and limits placed on the local tax levy will inevitably force every district to reduce expenses. We do carry reserves to offset increasing expenses, but these reserves will not be sufficient to offset the declining revenues for any length of time.
The vast majority of costs in any school district budget are in personnel since education is a service industry. The fixed costs associated with personnel such as pension and health insurance continue to increase, so a greater percentage of diminishing revenue must be allocated to these expenses.
As the 2010-11 budget was developed, great care was taken to reduce non-instructional expenses and some instructional expenses to maintain the quality comprehensive educational program at all levels, as the declining revenue cycle began.
With revenue declining even more dramatically this year, it will be a great challenge to develop an expense plan that matches the declining revenue and still provides the educational opportunities for our students. Until the newly elected governor releases his first executive budget, we can only speculate as to the size of the revenue gap, but all indications point to a significant loss in revenue. That will make the decision-making by the board and administration as to how diminishing resources are to be allocated more challenging than in previous years. We will continue to save as many dollars as possible in non-instructional functions, but if the perfect storm does indeed occur, decisions will have to be made as to the allocation of instructional dollars.
We want to make sure the community is informed about the district budget development process and has the opportunity to interact with the board as the budget is developed. We invite you to join us at any and every step of the way to help us make the best decisions for the students of our community.
Dr. Alice Kendrick is the superintendent of the Jamesville-DeWitt School District. Her article was previously published in the Dec. 10 school district newsletter.