Pandemic likely to have ‘significant impacts’ on school budget

Warwick. In the face of the novel Coronavirus pandemic and impending nationwide financial crisis, the Warwick Valley School Administration is revising assumptions and reworking its proposed budget for the 2020-21 school year.

26 Mar 2020 | 10:20

    As the community and the wider world grapple with the COVID-19 pandemic, the Warwick Valley School District board held its monthly meeting by teleconference Monday evening, in the interest of social distancing to protect the public.

    What was originally intended to be an update on the current iteration of the proposed budget became instead a caution of difficulties on the horizon. Superintendent of Schools Dr. David Leach offered a bleak assessment of the current situation: The district was already moving into a “challenging” budget season; now it looks like “We’re heading into another budget crisis.”

    In an emailed statement, Leach said, “The reality is New York State was not in a healthy financial condition before this crisis. Governor (Andrew) Cuomo’s initial budget proposal called for Warwick Valley CSD to be about flat with NYS aid.”

    Where the funds come from

    More than two-thirds – 66 percent – of WV schools derive their revenue from the property tax levy; the next largest source comes from New York state aid, at 27 percent; the remainder comes from non-tax sources, such as tuition-paying students from out-of-district and rental of former district school buildings, at a little over 4 percent; appropriated fund balance of just over 2 percent; and a library bond tax, at 0.44 percent.

    The school tax levy for the current (2019-20) school year is $62,506,673.

    “Because our state tax dollars are not fairly returned to us like other districts in our region, “ Leach continued, “rollover budgets result in structural imbalances. Assuming our state aid would be flat – as it is – for the 2020-21 budget year, the projected deficit is $1,086,746.”

    District ‘shortchanged’ by Albany

    N.Y. State aid constitutes about 27 percent of the WV district’s revenue. From Leach’s email statement: “(It has) increased by an average of less than just 1 percent annually over the past three years – well below inflation. NYS foundation aid has been shortchanging the district by $2.4 million a year.

    "Before the Coronavirus pandemic, the district was likely to see an increase of just $47,430 for a total of $16,011,371. The 0.3 percent increase – which fails to keep up with inflation – is the lowest percentage among all school districts in the area.”

    The superintendent said that, while spending per pupil is “similar to other school districts in our region,” New York State uses a formula to calculate aid based on the relative wealth of a given district: “New York State assumes that due to Warwick’s higher combined wealth index, we should receive considerably less NYS aid, and the local taxpayer picks up the difference.”

    Leach, along with members of the BOE, met with New York State Senator Jennifer Metzger two weeks ago to advocate on the district’s behalf.

    At Monday’s teleconference, Leach suggested that the Gap Elimination Adjustment (GEA), Albany’s way of closing its own budgetary gap by taking back a certain amount of school aid – which had only been repealed in the past few years – could be reinstated by Cuomo.

    NYS budget prospects: ‘Grim’

    The current state budget outlook, Leach continued, is “increasingly grim,” necessitating additional cuts to the district’s proposed budget for the coming school year.

    Leach said that New York State has a “significant budget gap” of some $6 billion, according to the Comptroller, Thomas DiNapoli – a gap likely to widen to $10 billion, or perhaps up to $13 billion. “This is an extraordinary time that we are going through,” Leach quoted DiNapoli, “and it makes estimating the revenue impact of the pandemic very, very difficult.”

    From Leach’s statement: “...a $7 billion-plus deficit equates to about 7 percent of projected state spending, excluding federal aid. School Aid accounts for about 30 percent of state spending. It is hard to envision the state closing so large a gap without impact on School Aid.”

    He added that the Trump administration’s decision to push back the tax filing deadline from April 15 to July 15 – and the subsequent decision by Albany to do likewise – will affect New York’s cash flow, making delays to school aid payments scheduled for April, May and June inevitable.

    Given the realities of both the pandemic and the NYS budget deficit, combined with likely cuts to the WV school district’s school aid, Leach said that he, along with Assistant Superintendent for Business Tim Holmes, will be scouring the budget for additional areas to realize savings.

    Employee salaries for the current school year total $45,802,911; for the 2020-21 school year, they are expected to total $46,506,911, or an increase of 1.54 percent.

    Pandemic’s collateral damage: Standardized tests

    As schools in New York State have been closed since mid-March and are unlikely to open before the middle- to end of April, the New State Department of Education announced that all standardized tests for elementary and middle schools, such as the ELAs, and grades 3 and 8 assessments would be cancelled this year; SATs/ACTs have been postponed until May. Currently, NYSED expects Regents exams for high school to take place as scheduled. The College Board said students can still get credit for AP courses, and that those exams will be shortened.

    Closing the gap: likely cuts
    As the Warwick Valley School Administration strives to fill the budget shortfall, it has identified these prospective targets:
    Reduction in communication services $150,000
    Teacher retirement savings $605,715
    Employee retirement savings $126,485
    Administrative staff reduction $189,686
    Reduction in Workers Comp costs $ 14,860
    Total $1,086,746