HILLTOWNS — Berne-Knox-Westerlo is feeling the pressure of the economy along with the aftershocks of its budget defeat last year as it looks toward the 2025-26 school year.

Superintendent Bonnie Kane did not mince words at the board of education’s March 23 meeting, saying the district is being confronted with “tremendous increases in operational costs,” such as health insurance, retirement expenses, fuel and utilities, and more.

Altogether, the BKW is looking at an expense total of a little less than $25.3 million (down from the $25.8 million contingency budget), with a revenue total of $23.4 million.

After factoring in the use of reserve money and even with a property-tax increase that hits the state-set cap — 3.3 percent — the district will still be short $711,396.07, Kane said.

She said closing the gap completely will rely on “creative” reductions through attrition and program restructuring. 

“The last resort for us will be reduction of positions,” Kane said. “We do not want something to be impactful to programming. At some point, there becomes very limited options, but we are going to utilize and look into every other option first. 

The shortfall can be at least partially blamed by the district’s current contingency budget.

The district was twice unable to pass a budget last year because residents rejected its attempt to pierce the tax cap, leaving the district with the previous year’s tax levy. This means it has a smaller property-tax seed to grow from this budget cycle than if the 2024-25 budget had gone through as proposed. 

The district also will be receiving less state aid than previously, though not as part of any Foundation Aid changes. Rather, because the district receives building and transportation aid that’s proportional to the amount of debt in those areas, and those debts have gone down, so too has the aid it will get. 

Those reductions mean that the school’s overall aid package will be 3.45 percent ($421,094) less than the current year. 

Specific increases on the expense side that Kane highlighted are: 

— An as-yet-unspecified increase in health insurance premiums, pending negotiations;

— A 10.77-percent increase in prescription premiums;

— Contractual salary increases, pending negotiations;

— A 9.59-percent increase in employee retirement-system costs, and a 16.5-percent increase in teachers’ retirement costs;

— An increase in auto and property insurance premiums that Kane said she recently had learned would be even higher than the 10-percent increase she originally had in her presentation;

— An increase in worker’s compensation insurance;

— A 7.56-percent increase in Social Security and Medicare payments;

 — A 10-percent increase in utilities;

— A 10-percent increase in fuel prices at minimum; 

— A 5-percent increase in waste-management;

— A 5-percent increase in service charges from the Board of Cooperative Education Services (BOCES); and

— A 10-percent increase in BOCES teaching services charges. 

The district is also in the middle of negotiating a contract with the Albany County Sheriff’s Office for its school resource officer, whose position had originally been cut from the 2024-25 budget but then was essentially gifted by the county to the district this year.

Additionally, the district is looking to lease a new $70,000 dump truck and to add back in an administrative-assistant position that was cut from the current budget, as well graduation and field trip expenses that also had been cut.

After Kane’s presentation, the board spent some time discussing the need to stress the importance of school funding to the community, and emphasize that although — in the words of board member Kim Lovell — the district “survived and flourished” under the contingency budget, the measures the school took aren’t sustainable and the funding needs to be replaced. 

The district found itself under a contingency budget after the board of education gambled on its ability to persuade the public last year to accept a tax hike above the cap. Tax levies that are above the cap require a supermajority vote — 60 percent — to pass rather than a simple majority. 

The district failed twice to reach that threshold, but had easily cleared the simple-majority threshold.