The School Board is anticipating a very a difficult New York State aid picture when Governor Cuomo releases his budget in the next few weeks. The Governor, as is the case with many of his counterparts throughout the country, is trying to close a $12 billion budget deficit. State and Federal tax revenue typically lag the general economy by several years as it takes time for incomes to fully rebound after a recession. This recession is the
most difficult period of economic weakness our nation has experienced since the Great Depression.
The Governor has publicly stated that education and Medicaid will be the areas that will receive the largest cuts in funding. This is not a new theme. Last year, Governor Patterson reduced state aid to our school district by 14 percent or $750,000.00. This upcoming budget looks to be more difficult as we are expecting a state aid reduction that could approach 15 to 20 percent or $900,000 to $1,200,000.
In addition, there are two other factors that compound the difficulty of next year and will impact every school district in New York. First, the retirement systems for our Teachers and our State employees both announced increases in the required pension contributions from school districts for next year by a staggering 27% to 34 percent. This is mandated by the state of New York and will cost Skaneateles an additional $378,000 next year.
Second, a Property Tax Increase Cap of 2 percent is likely to be implemented this year by the State Legislature after several years of debate. Currently, the local tax levy for our school district is approximately $21 million per year, which means a 2 percent cap will allow for a maximum revenue increase of $420,000 via a property tax increase. The math is not pleasant but here it is. The school district is forecasting a revenue loss approaching $1.5 million after factoring in the above mentioned state aid loss, Onondaga County sales tax losses' and a reduction in Federal Stimulus dollars. On the cost side, we are anticipating an automatic increase in pension contributions, healthcare insurance premiums and step-salary increases that total $600,000. Thus, the District has a need to fund $2.1 million in aid cuts and mandated spending increases with only $420,000 to fund it due to the impending property tax cap. Therefore, the funding shortfall could reach almost $1.7 million depending on how severe things reach in Albany. The property tax cap takes away the ability of our school district to locally fund the amount of programming that the community expects and has supported in the past. This will be the second year in succession of reduced spending in our District. Skaneateles will not be alone in this endeavor as every district in state will face similar challenges this year.