Daniel T. Connor
Superintendent

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

Budget News

Spending increase less than one percent

Residents go to the polls on Tuesday, May 17

April 25, 2011 - On Tuesday, May 17, Goshen Central School District residents will vote on a $60,172,813 proposed budget for 2011-12. This budget represents one of the lowest spending increases in recent history, at 0.8 percent.

Levy increase due to loss in aid, increase in costs

Despite the low spending increase, the proposed budget would increase the tax levy by 3.96 percent. The Legislature adopted an on-time budget for New York State that leaves Goshen with a $1.23 million reduction in state aid, or a 10.5 percent loss, for next year. This is on top of last year’s cut of $1.68 million. This significant loss in state aid revenue contributes to about 3 percent of the total tax levy increase for next year. Learn more about state aid

Other factors raising the tax levy include rising costs for employee benefits. Costs for employee and teacher retirement funds will increase by approximately $600,000 for next year. However, it is important to note that these rates are set by the state and have nothing to do with collective bargaining.

“Rates are going up because of past declines in the stock market,” said Assistant Superintendent for Business Robert Miller. “Losses in investment earnings now need to be offset by higher contributions from the school district, in order to fund legally promised benefits. New York has basically passed these expenses onto the schools.”

Fuel costs are also skyrocketing – the district is estimating a 28 percent increase in costs for diesel and gasoline for next year, mainly due to current uncertainty and conflict in terms of the world’s energy supply.

District facing additional financial challenges

In addition to continued loss in state aid and rising costs of benefits and fuel, the district is facing financial hardships surrounding the high number of SCAR (Small Claim Assessment Review) and tax certiorari cases filed against the district.

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.

“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,” said Miller.

This year, 124 SCAR cases were filed against the district. To date, 75 of these cases have been settled, and the district has refunded $63,117.62 to taxpayers. Since 2009, the district has paid out approximately $1.6 million in tax certioraris.

There are several cases still in litigation with a projected liability of $12,628,211. The district has a $7.2 million reserve to help alleviate the cost of these refunds, which must be paid by law.

Budget proposal includes no program reductions for next year

Even with such a significant loss in state aid and revenue, the proposed budget does not call for any reduction in its academic program for next year.

Staffing will be reduced by 3.5 positions, including a full-time bus driver, full-time account clerk, half-time clerical position and a temporary full-time psychologist. All of these positions are being vacated through attrition, except for the temporary psychologist position that was funded through ARRA (American Recovery and Reinvestment Act) funds.

Other personnel changes include increasing two technology positions from half- to full-time in order to provide additional support for instructional programs and increasing the hours of the Goshen Intermediate School library clerical position to a 10-month employee. This position will help alleviate the loss of the Intermediate School’s full-time librarian – a position that was eliminated due to budget constraints last year.

The addition of these positions results in a net reduction of 2.3 positions for 2011-12. Last year, the district eliminated 12.85 teaching positions.

“The goal was to retain as much program and personnel as possible, and the district was able to do so through careful financial planning,” said Superintendent Daniel T. Connor. “First and foremost, principals and department heads were asked to adjust their budget proposals to the current year’s expenditures and avoid any unnecessary increases.”

Other factors that allowed the district to keep its personnel and programs intact for next year include:

Positive negotiations climate

The district puts aside money in order to compensate for employee salaries and benefits. Recent contract negotiations were extremely positive, and contract obligations for faculty and staff ended up being less than the district anticipated – and budgeted for. It is the district’s belief that Goshen has one of the lowest settlements in the region.

Low hikes in health insurance premiums

During a time when health insurance premium hikes are in the double digits, Goshen’s widely used, self-funded health insurance plan, the Orange-Ulster School District plan, is looking at a premium increase of only one percent for next year.

Several years ago, area school districts in Orange County formed their own health insurance plan in order to offer employees health insurance coverage at a lower cost to them – and the school district. By using a third-party administrator to negotiate for lower costs through Blue Cross/Blue Shield, districts are able to control insurance premiums by eliminating additional costs associated with insurance companies’ profit margins and aren’t subject to conflicting state health insurance regulations and benefit mandates.

Essentially, the district doesn’t have to subscribe to a “package” offered by a private insurance company, allowing it to control coverage and premiums, and manage costs when necessary, such as during a weakened economy. While private health insurance premium rates are increasing drastically, the Orange-Ulster plan is able to keep its rates low – last year’s premium increase was 2 percent. Learn more about the Orange-Ulster plan

Personnel funding shifts

Goshen has five self-contained funds within a school district: general, capital, trust and agency, cafeteria and special aid. The public votes on the district’s general fund during annual budget votes in May.

In 2011-12, several positions will be shifted from one fund to another, as required by the State Comptroller. For instance, 7.2 teaching positions currently part of the general fund must now become part of the special aid fund, therefore lowering costs by $634,341 in the district’s general budget.

At the same time, special education positions were shifted from the special aid fund to the general fund, allowing the district to retain these positions next year.

Use of Reserve Funds

The district uses its undesignated fund balance every year to help offset the local tax levy. In 2010-11, in the wake of a 12.6 percent loss in state aid, the Board of Education decided that $980,434 of the fund balance would be used in order to limit the tax levy increase. This is $180,000 more than the district used in 2009-10. District officials will again apply $980,434 from Goshen’s undesignated fund balance to the 2011-12 budget in the wake of a 10.5 percent cut in state aid.

District officials strongly favor a conservative approach to dipping into the fund balance. Since 2009, the district has paid out approximately $1.6 million in tax certioraris because of incorrect property assessments from the town assessor. The district allocates money from the fund balance to help pay these refunds, which are required by law. In addition, the district cannot predict future financial challenges. Depleting the undesignated reserve funds to help make up revenue shortfalls would be irresponsible and would place the district in a precarious financial position. Learn more about reserve funds

“We can’t anticipate future hardships and have to be prepared to address all challenges,” said Connor. “It’s our responsibility to our students and our taxpayers.”

More details about the 2011-12 proposed budget will be available in a Special Budget Newsletter that will be mailed to district residents in May.