Community Budget Forum II - Marcellus Central School District

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4CHORUSDRAMA & THEATREUnderstanding the PUZZLE of tBackground Information from the New York State School BoardsAssociation publication entitled The New 3 R’s: Reducing, Restructuringand Redesigning—School Districts in the Tax Levy Cap Era“Reducing, Restructuring, and Redesigning” have become the New 3 Rsas school leaders work to preserve educational programs under New YorkState’s new property tax levy cap.TRANSPORTATIONThe New 3 Rs include many of the familiar budget strategies that schoolleaders have adopted over the past three years—drawing on reserves,cutting personnel, negotiating salary freezes, and using attrition andretirements to reduce costs. They also represent a move beyond theseone– or two-year savings toward actions that will yield more long-termsustainable cost-savings. These actions include reducing non-mandatedprograms, restructuring school buildings and grade configurations,and redesigning programs by sharing teachers and administrators withother districts. One school administrator summarized the New 3Rs as“finding a different way to do business as we move forward.”The reasons for the paradigm shift are clear. School districts and thetax levy cap are on a collision course. Projected expenditures forhealth insurance, and pensions alone for all school districts wouldexceed the maximum allowable tax levy increase under the levy capby $103 million in 2012-13. In fact, an analysis of 121 school districtsover the past two years clearly demonstrated the following:Marcellus Central SchoolsVARSITYATHLETICS1. Nearly three-quarters of these districts would not have been able to raiseenough property tax revenues to make up for increased expenditures anddecreased state and federal revenues without going above the propertytax cap and requiring 60 percent voter approval. (For the current fiscal yearin the Marcellus CSD, even though the district cut 21.7 positions, reduced thebudget by $866,178, and used $1,463,812 in reserves to balance the budget,the school district STILL had to raise the local property tax levy 3.9% - anumber which would have exceeded the property tax cap if it was in existencefor the current year.)MODIFIEDATHLETICSCOMPTECHN
HIGH SCHOOL ELECTIVEShe New Property Tax Cap: Part 32. Nearly one-third (30 percent) of the districts facing budget gaps wouldnot have had enough undesignated reserve funds to cover the shortfall.Their only choices would have been to cut programs and staff or proposebudgets that exceeded the cap and therefore require a supermajority (60percent) voter approval. (For the Marcellus CSD, the Statewide School FinanceConsortium estimates that our school district has enough reserves to remainsolvent for 1.1 more years through the end of the 2012-13 school year.)BANDMarcellus Central Schools3. Districts that would not have had enough undesignated reserve funds tocover the shortfall tended to be districts with less property and incomewealth than average districts based on their combined wealth ratios. (Forthe Marcellus CSD, our Combined Wealth Ratio is 0.66 as compared to the NYSAverage of 1.00 for average wealth. Our district was among the hardest hit withthe Governor’s Gap Elimination Adjustments for the past three years with cuts of$1,063,909, $1,349,287, and $2,304,718 for this current fiscal year. In fact, the Boardof Education will have to account for the Governor’s proposed Gap EliminationAdjustment of $2,144,672 during next year’s budget planning.)4. Districts that had enough reserve funds to cover the shortfall would haveneeded to use more than one-third (38%) of their reserves. That wouldplace districts at risk in the event of an unexpected event—such as flooding,emergency damage to school facilities, slow tax collections or delayed NYS Aid.Without sufficient reserves to cover these scenarios, schools might resort toshort-term borrowing, thereby incurring interest and passing that cost along totaxpayers. (Because the Marcellus CSD used $1,463,812 in reserves for this current2011-12 year to balance the budget, the Board of Education must commit at leastthat much out of the remaining $2.5 million in total reserves for next year or riskhaving to make many more cuts to educational programming.)Although the new law has been referred to as a “2 percent tax cap,” itdoes not restrict any proposed tax levy increase to 2 percent. The law doeslimit how much the district can raise in property taxes and still have onlya simple majority approve the budget. If a district surpasses its tax levylimit, which varies from district to district based upon a complex, multi-stepformula, then 60 percent voter approval is required to pass the budget. Thelaw takes effect in 2012-13. If voters reject the budget twice, districts mustadopt a budget with the same tax levy as the year prior – a zero percent cap.EXTRACURRICULARPROGRAMSJUNIORVARSITYATHLETICSUTEROLOGYCLASS SIZES5
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Community Budget Forum II - Marcellus Central School District

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