Daniel T. Connor
Superintendent

227 Main Street
Goshen, NY 10924
(845) 615-6720

Budget News

District faces number of concerns, uncertainties while developing budget

December 2, 2010 - The budget development process for the 2011-12 school year is underway. There are a number of concerns and uncertainties facing the district as we begin this difficult process.

Implications of mid-year cuts

New York State’s imminent fiscal troubles could translate into more mid-year cuts for our schools. In early November, the state Division of Budget (DOB) released its Mid-Year Financial Plan Update projecting a $315 million budget gap in the current fiscal year. This is a result of slow economic growth, increasing Medicaid costs and fewer budget savings than expected. The report also estimated that next year's budget gap will grow from a projected $8.2 billion to $9 billion.

Due to this, there may be implications of additional mid-year cuts to our schools’ promised state aid for 2010-11, particularly in the area of special education. In addition, the district anticipates reductions in state aid for 2011-12, since declining state aid is a trend that we’ve seen for the past three years.

Discussion of tax cap

Both Governor David Paterson and Governor-elect Andrew Cuomo have touted the possibility of enacting a property tax cap in New York. According to Cuomo’s website, the Governor-elect plans to propose a cap on property taxes for all school districts and local governments at two percent or the rate of inflation – whichever is lower. Residents may override the cap with a 60 percent majority vote when an alternative budget proposal serves the best interests of the community.

If approved, a tax cap has the ability to cause severe reductions in staffing and programs. According to the New York State Council of School Superintendents, a cap will reduce the revenue available to schools, without guaranteeing alternative funding, and without reducing costs. In addition, caps do nothing to change the demand for services, such as special education needs, and do nothing to lower costs imposed by state and federal governments, such as pension costs and mandated programs.

Loss of ARRA funds

The federal stimulus aid given to schools under the American Recovery and Reinvestment Act (ARRA) will expire as of June 30, 2011. This may impact a number of positions that were either created or restored with the allocation of these temporary funds, including nine teacher positions, three special education teacher positions and six special education teacher aide positions.

In August, President Barack Obama signed the Education Jobs Act, a $26 billion law to save teachers’ jobs, which has the potential to help offset the loss of ARRA; however, there are two issues at hand. First, New York State has yet to pass legislation for regulations that will allow districts to obtain their allotted funds. Secondly, the amount of funding the district may receive through the Education Jobs Act does not completely cover these positions in their entirety, leaving a gap.

Because of this, the district is faced with the decision to roll over these positions – some of which are mandated because of special needs – into their budget for 2011-12.

Continued filing of tax certioraris and SCARS

Another area of possible revenue loss can be attributed to the continued filing of tax certioraris and SCARS, or Supreme Court Assessment Reviews. A number of taxpayers and business owners are challenging their property assessments made by their town assessor. Many are finding that their properties were assessed incorrectly, and as a result, paid higher taxes because of the over-assessment. Although the district plays no role in property assessments, it is required by law to refund the property owners, resulting in a loss of revenue at a time when financial aid is grim.

Please note that these concerns are not definite at this time – they are uncertainties that the district must grapple with as it develops its budget for next year.