Hilltown Archives — The Altamont Enterprise, March 29, 2012
BKW to hold budget forum on Tuesday
BERNE — With the 2012 school-budget vote less than two months away, the Berne-Knox-Westerlo School District will hold a community forum on Tuesday, April 3, to discuss spending for the 2012-13 school year.
The forum will be held in the high school auditorium, and will start at 6 p.m.
This past Monday, the school board got an update from business official Kevin Callagy on the budgeting process.
“We’re still awaiting the New York State budget,” Callagy told a crowd of about a dozen on Monday night. “Whether we like the numbers or not, it’s at least helpful to know what they are.” The governor announced a budget agreement on Tuesday, and state aid figures are expected Friday.
Callagy also told the board that, through working with the Board of Cooperative Educational Services’ Municipal Benefit Coalition, which has been acting as the town’s health insurance broker since last year, the district may be able to save 20 percent — $240,000 out of $1.2 million — in prescription-drug-service costs.
“They looked at our 2010-11 claim year,” Callagy said of the BOCES coalition, “and, they believe, based on those prescriptions that were used at that point, that we would have saved about 20 percent also. However, it will require us to move from our current provider, Informed Rx, to ESI,” or Express Scripts Inc.
“We’re self-insured, so it’s really just the provider of the services,” Callagy went on. “I’m budgeting as if there is no increase in our prescription drug cost. So, it’s not the full 20 percent, because I’d also like to see it first.”
Callagy gave two sets of figures for the next three school years: The first set showed how the district might budget to meet the current 2-percent tax-levy cap; and the second, what it might be facing if the budget were voted down twice, and the district were forced to budget with no tax-levy increase. New state legislation says there can be no levy increase if a school goes to a contingency budget, as Berne-Knox-Westerlo has after the last two years of budget defeats. The law also allows for a carryover of the unused increase the following year.
Speaking about the new law, Morris Peters, a spokesman for the New York State Division of Budget, said earlier this month, “A carryover of up to 1.5 percent of unused tax-levy growth is allowed within the cap the following year.”
So, using the 2-percent cap from the 2011-12 school year as an example, if a school’s budget were voted down twice — forcing the district to default to a contingency budget with no tax-levy increase — then that district could have up to a 3.5-percent increase the following year — 2 percent as limited by the cap, plus the 1.5 percent carryover.
Likewise, if the district were to pass a budget with a 1-percent increase — 1 percent less than the cap — then it could increase the budget by an additional 1 percent above the cap the following year, allowing for a maximum 3-percent increase that year.
“That’s if the levy cap were 2 percent again, but that is something that will have to be calculated,” Peters emphasized.
Callagy’s projections also included the use of funds from a debt-service reserve, which has not yet been established, but would include unused building aid from the ongoing building project.
Meeting the cap
BKW’s $20.8 million budget for this year depended on $10,681,901 from property taxes, a 3.5-percent increase from the previous year, and used $8,738,003 from state aid.
A rollover budget for next year — meaning all programs, staff, and services are maintained from the current year — would total $20,205,832. This includes a $162,510 increase in instruction costs; a $30,135 increase in general support; and a $24,070 increase in transportation costs.
A 2-percent increase for the 2012-13 tax levy would bring the total levy up to $10.9 million. With state aid currently projected at $7,827,643; and using $1.5 million from the district’s fund balance, and $245,000 expected from other revenues; the district would have $20,468,182 in total revenue to budget with — $262,350 more than the rollover budget.
But, in his projections for the following two years, Callagy sees greater challenges.
Based on those numbers, a rollover budget for 2013-14 would total $21,455,165.
A 2-percent increase in the tax levy would mean $11.1 million in total property taxes. Projecting $7,923,609 in state aid; and using $1 million from the district’s fund balance; $224,000 from other reserves; $245,000 from other revenues; and $300,000 from the yet-to-be-established debt-service reserves; Callagy estimates $20,806,059 in total revenue — $649,107 less than the rollover budget.
Then, in the 2014-15 school year, Callagy estimates a rollover budget of $21,276,010.
A 2-percent increase in the tax levy would mean $11.3 million in total property taxes. Projecting $8,021,759 in state aid, and using $1 million from the district’s fund balance; $224,000 from other reserves; $245,000 from other revenues; and $150,000 from the debt-service reserves; Callagy estimated $20,976,478 in total revenues, or $299,532 less than the rollover budget.
Budgeting with zero
Callagy also provided estimates for what contingency budgets, with no tax-levy increases, would look like over the next three years.
Having no increase in the 2012-13 tax levy; and using the projected $7,827,643 in state aid; $1.5 million from the district’s fund balance, and $245,000 expected from other revenues; the district would have $20,254,544 in total revenue to budget with — $48,712 more than the rollover budget.
But, in 2013-14, having no increase in the tax levy; and using the projected $7,923,609 in state aid; $1 million from the district’s fund balance; $224,000 from other reserves; $245,000 from other revenues; and $300,000 from the debt-service reserves; Callagy estimated $20,374,510 in total revenue — $1,080,655 less than the rollover budget.
Then, in the 2014-15 school year, having no increase in the tax levy; and using the projected $8,021,759 in state aid; $1 million from the district’s fund balance; $224,000 from other reserves; $245,000 from other revenues; and $150,000 from the debt-service reserves; Callagy estimated $20,322,660 in total revenue — $521,801 less than the rollover budget.
Board member Vasilios Lefkaditis questioned the near half-a-million jump between the projected deficits for the second and third years.
“It’s the debt payments, Vas, that we will have,” Callagy replied.
“You also applied less from our fund balance in 2013-14,” Lefkaditis said, looking over the numbers as Callagy spoke.
“What I’m doing is, I’m carrying the building aid,” Callagy said. “This year, we’re getting an extra half payment that we really should have received last year.”
District taxpayers will have their chance to weigh in on the process at this Tuesday’s forum.