Penn Yan looks at $1.3M budget gap
PENN YAN–During the Penn Yan Central School District (PYCSD) board meeting on Wednesday, Feb. 1, Interim Assistant Superintendent for Business Rodger Lewis presented the current projections for the 2012-13 budget. The presentation indicated that the budget for next year would be 4.32 percent greater than this year.
The budget for the current school year is $31,305,639. Lewis explained during the presentation the 2012-13 budget is currently expected to reach $32,661,066. He emphasized the gap amount would be $1,355,427.
During the PYCSD meeting last December, former Assistant Superintendent for Business Doug Tomandl gave a presentation projecting the 2012-13 budget would reach $34,073,712. Lewis said projections from last December were an estimate and the school board now has better information regarding various expenses. However, he also noted it will still be some time before the budget for next year is finalized.
Lewis explained the most recent projections are solely based on expenditures. He said the board still needs to look at revenue factors like state aid the new two percent tax cap waiver law which N.Y. State put in effect for this year to see how the budget will end up balancing out. “We have a lot of work to do over the next few months before we can present to the public what we call our final budget,” said Lewis.
Lewis explained appropriations to the school board are divided into nine categories: Central administration, operations and maintenance, insurance and Board of Cooperative Educational Services (BOCES) fees, instruction, special education, clubs and athletics, transportation, benefits and debt service. He also went into detail about areas within those categories where a major cost increase is expected. He explained these areas are having the biggest impact on the expected increase of the overall budget.
Lewis said one area that “took a big hit” financially is benefits. He explained the money allocated towards benefits for the current school year is $6,308,578. However, that cost is expected to be $7,261,756 (15 percent increase) for 2012-13. Lewis gave detail on some key factors leading to the high increase. He explained that health insurance costs are expected to increase by $410,000, negotiated salary will probably rise by $389,000, retirement system costs are expected to increase by $375,000 and workers compensation and unemployment benefits will most likely see a $40,000 increase. Lewis explained with more people out of work due to the tight economy, there is a higher demand for unemployment benefits which is why those costs rose significantly.
Along with benefits, Lewis said another area that will see a major increase in cost for 2012-13 is BOCES administrative and facility fees where the projection is a $27,000 (15 percent) increase from this year. He also added that transportation fuel costs are expected to rise by $60,000. Lewis noted that the PYCSD buses put in close to 3,000 miles a day between picking and dropping off students at home and traveling to sporting events.
While the current projections only showed the expenditure side of the 2012-13 budget, Lewis did also spend some time discussing revenue factors the district will need to look out to help balance out the final budget. He explained key parts in determining the revenue are state aid, federal aid, and local revenue.
Lewis also outlined some of the issues regarding revenue which the district will need to deal with. He said one problem is the freeze the state has put on educational financial aid over the past four years. Lewis explained the state ceasing to increase the money allocated to schools leads to schools being forced to cut down on staff and programs. Lewis added that Governor Andrew Cuomo did promise to raise the amount of aid allocated to education by 4 percent this year. However, Lewis also noted that of the $805 million in aid that came out of the governor’s budget, only one-third went towards unrestricted aid. The rest of the money, he explained, went to competitive grants and the GAP elimination adjustment (aid the state takes away from school districts to fulfill other financial needs). With only a portion of that budget going towards foundation aid, Lewis said state aid for PYCSD would only increase by $93,600 for 2012-13 from $13.2 million this year (.7 percent).
Another revenue issue Lewis touched on was the AES-owned Greenidge coal-fired plant in Dresden. Lewis said AES has paid PYCSD roughly $500,000 in Payment in Lieu of Taxes (PILOT) payments. However, since AES closed the plant down, they have cut down their annual PILOT payments. Lewis said PYSCD only expects to receive half of what AES normally pays them annually this year.
With regards to the two percent tax cap waiver law, Lewis decided not to go into detail about its potential effect on the 2012-13 budget. He said it is a complex matter which has “too many uncertainties” surrounding it at the moment. Lewis explained it is something they have to examine carefully over the next few months, along with revenue, to determine how the final 2012-13 budget will balance out.