Board of Ed Gives Budget Direction: Tax Rate Increase of 3.5%

After pondering several financial scenarios and the effect those would have on the instructional program in Huntington schools, the Board of Education directed administrators to proceed with a budget reflecting a 3.5 percent tax-rate increase over the 2009-2010 school year for the 2010-2011 budget at its Monday, March 1 meeting.

Voters approved a $104,814,259 budget for the 2009-2010 school year, which reflected a spending increase of 1.6 percent.

Assistant Superintendent for Finance David H. Grackin noted that, although the board had said at its Feb. 8 meeting that it wanted a budget a tax rate increase not exceeding 2.8 percent, he felt trustees and the public needed to see "a broader range."

"A tax-rate increase of 2.8 percent results in $4.3 million in cuts to the budget that administrators have crafted since last year. That's spread out over 26 categories that the board has in front of them," Grackin said. The audience was not given a copy of the proposed cuts, in part because they involve cuts to personnel that would be obvious and the district prefers to inform the staff if there is a chance their job might be eliminated before placing it in a public document.

The other scenarios Grackin provided were: a 3 percent increase resulting in a $3.4 million reduction; a 3.5 percent increase resulting in a $2.895 million reduction and a 3.95 percent increase resulting in a $2.55 million reduction.

He noted that the district is grappling with trying to craft a budget with many unknown factors. Governor David Paterson's budget proposed sharp aid reductions. Another unknown factor is what the district's total assessed property value will be. A decline in assessed value effectively shrinks the tax base, putting upward pressure on the tax rate.

If that weren't enough, in mid-February, a new challenge emerged. Buried deep in Paterson's budget is a change that would significantly shift responsibility for summer school special education expenses from the state to local school districts. In Huntington's case, it would mean an additional $600,000 burden on the backs of local taxpayers, according to Grackin.

"Currently, the school district is responsible for approximately 20 percent of the cost associated with the summer special education program," he said. "The governor's proposal would make us responsible for 82.9 percent of these costs."  Grackin said that instead of budgeting $200,000 in the 2010/11 budget "as a transfer to the special aid fund, we would need to budget $800,000."

Superintendent of Schools John Finello told the board that with any of the budget scenarios "it's important to keep in mind that you are talking about a reduction in programs as you currently have it today." Meaning that, because the district has kept the tax rate increases to 1.84 percent and 3.52 percent in the past two years, many items have already been taken out of the budget.

"During those two budget cycles we were taking reductions," he said. "But we were doing everything in our power to stay away from cutting instruction." They may have no other choice this year he said.

School Board President Bill Dwyer said the trustees clearly have some difficult decisions to make and are seeking the public's input. "I guess what we, as a board, should discuss, then invite public in to discuss with us, the various things the administrators have put up as proposed cuts to areas from little things to big things, such as conferences, equipment class sizes."

Trustee John Paci said that, due to contractual obligations, the board does not have a lot of leeway to keep the budget down unless teachers are cut. "Fifty percent of our budget are salaries," he said. "With benefits that percentage increases 23 percent. Busing and transportation account for 7.9 percent of the budget. Right there is 81 percent of our budget. Those are contractual items that we have no control over, so we are talking about cutting from 19 percent of our budget to get a two percent tax-rate increase. So where do we go? Right to cutting staff and increasing class size? No matter how you cut it, that's where we're going."

Superintendent Finello said the district didn't have to cut one teacher in the 2009-2010 school year budget. "But only because we were bailed out by the federal government," he said. "This year it's impossible not to unless we're willing to accept a six percent increase. This is where the board is in such a bind. No one is willing to put up a hand and take a pay cut."

The Huntington School District received nearly $2 million in funding from the federal government last year. The monies, which filter down to the district through the state, come from the American Recovery and Reinvestment Act, the federal government's economic stimulus program.

The grants helped offset general fund, remedial reading and math, special education and teacher center expenses.

Trustee Rich McGrath said it didn't really matter what the board was able to accept. "To be clear, even if we are willing to accept six percent, the voters could say no."

Board Vice President Emily Rogan agreed and noted that the contingency budget stipulations if the budget fails on May 18 would be particularly bad next year.

Grackin said that the contingency budget, put in place if the budget put up for vote by the board is voted down by the public, would be $280,000 less than the current year's budget.  Finello noted that transportation cannot be reduced in a contingency budget, an item that several in the audience had proposed reducing.

District resident Nick Wieland, an accountant, told the board it "is going to have to bite the bullet." He noted that New York's budget deficit is second only to California's. "And it's only going to get worse. You're going to have to cut sports and extracurricular things that everyone wants or you're going to have get those contractual items to give some concessions."

Wieland is correct about the future being worse, according to State Comptroller Thomas DiNapoli, in a December press release. "ARRA funding has helped ease some of the budget pain for school districts and taxpayers," DiNapoli said.  "But that money stops in 2011-12, and when it does, New York's schools face a $2 billion funding gap. That's a big hole to fill.  The time to start thinking about how to fill that hole is now, not when the money is already gone.  It won't be easy; schools are already facing financial problems.  But this won't just go away."

Trustee Kimberley Brown said that even the highest tax-rate increase scenario illustrated by administrators would be brutal for students. "There is no high-school experience if these programs are cut," she said. Trustee "I'm not anti-bargaining units or against people who want to work hard for their money and have a decent living, but there comes a point where you can't squeeze more out of the taxpayer. The reality is people are losing jobs, homes, benefits and to expect constant increases in salary is unrealistic."

Trustee Elizabeth Black agreed. "If you look at the past four decades, there have been four percent salary increases ever year. The bubble has to burst sooner or later."

Trustee Paci said that is why the board has to be tough negotiators with the collective bargaining units and said that the board had failed in that area. "Let's 'fess up," he said.

His father, John Paci, Sr., a former Huntington teacher disagreed. "We have to stop continually attacking one part of the population. Why don't you say to the government, 'you have to fund education differently.'? When I came here my goal wasn't to teach in Huntington. It was to live here. It's a little hard to live here on a teacher's salary. I know we have short-range problems but we have to think long range. When you cut a teacher's salary it's forever. But in business, when things bounce back, so do salaries."

Dwyer said that even if all agree cuts have to be made, it would be hard to agree on where. "No one will feel like there are any special interest groups when you talk about making class sizes larger because it's touching everyone."

He urged the board to decide on a specific tax rate increase for the budget.

Paci said he advocated the 3.5 percent tax rate increase. "It's a disaster but anything lower is just worse." The other trustees agreed and gave the board its direction.

School administrators plan to release the draft budget to the public in mid-March. Trustees will then begin a series of public meetings where they will review each line of the spending plan before making final decisions and adopting a budget at the board meeting scheduled for Monday, April 19 at 7:30 p.m. in the Jack Abrams Intermediate School auditorium. Residents will have the final say in a vote scheduled for Tuesday, May 18.

Until the board approves a proposed budget, administrators will continue meeting in an effort to prioritize spending and zero in on areas that can be reduced further, according to Finello. "Every budget code is being scrutinized as officials seek to develop a list of possible cuts. Trustees have expressed a desire to see what the budget would look like if the tax increase is kept to a minimum," he said.

Huntington School Board members approved a timeline for the budget vote and trustee election last year. Residents will go to the polls on Tuesday, May 18, 2010. The three-year terms of current trustees John P. Paci III and Richard McGrath are expiring.

• March 15, 2010: Last day for voter propositions to be placed on the ballot.
• April 19, 2010: Budget adoption by trustees; nominating petitions due for trustee candidates.
• May 10, 2010: Budget hearing.
• May 11, 2010: Receipt of absentee ballot applications due if ballot is to be mailed to the voter.
• May 12, 2010: Last voter registration day.
• May 13, 2010: Voter register available for public inspection; List of voters receiving absentee ballots available.
• May 17, 2010: Receipt of absentee ballot application if ballot is to be personally delivered to the voter.
• May 18, 2010: Annual meeting – budget vote and election; Board of Registration meets to register voters for the 2011 budget vote and election and all special district meetings.