South Orangetown Central School District

Tax Gaps, Mandates, and School Funding

We have recently begun developing the budget for the 2012-13 school year and studying its potential impact on the educational program in our community.  Because of a “perfect storm” of three significant fiscal factors: loss of state and federal funding due to the economic crisis, the new tax cap law, and an abundance of unfunded state mandates, school districts across New York State face an unprecedented budget gap.  Difficult decisions will have to be made.

What does this mean for South Orangetown?

Without other revenue, the school-funding formula that was based on local property taxes was unsustainable.  In response the state has imposed a property tax cap that goes into effect for the 2012-13 budget – a Q&A is on the district website.  With a restriction on raising revenue through taxation and a reduction in state aid, the district will need to close a major budget gap of $2.4 million dollars.

What has the district already done to reduce expenses?

Over the past few years, the district has found efficiencies in operations, facilities, energy and transportation.  Last year we began to seek reductions in some non-mandated programs, such as pre-school education, freshman sports, and the enforcement of voter-approved mileage limits for school buses.  These initial changes combined with a multi-year fiscal management plan have kept district budget increases and residential tax rate increases at an average of 1.8% over the past three years.

Since 2008 SOCSD has cut slightly under $5.5 million dollars from its budget.  (Rockland districts have cut approximately $65 million)  At the same time we have experienced a loss in state and federal aid of over $5 million dollars. 

District teachers stepped up in their last contract by agreeing to 0% increases for a portion of the contract.  In spite of this effort, SOCSD excessed 53 positions over the past three years.

What does the future hold?

Someone recently told me, “The students are more important than money.”  I wholeheartedly agree; however, the educational services that we provide for students come at a cost.   It is exactly for that reason – the importance of each student’s education – that we need to skillfully manage our limited funding, judiciously determine priorities, and advocate for mandate relief.  Without these, SOCSD and all NY districts are going to see drastic reductions in services.  Nothing comes without a price.

Essentially, the district has self-imposed a cap during this difficult economic period. The district has made numerous cuts that equal approximately $5.5 million dollars over the past three years – an average of $1.83 million dollars each year. One can easily infer that we face a daunting challenge of reducing $2.4 million in a single year, especially in light of the cuts that have been made away from student programs and staffing.  There are fewer places to find savings. 

What about unfunded mandates?

There are over 150 state and federal public school mandates in New York that are either unfunded or underfunded.  Some were legislated for good reasons, such as health and safety, others are the result of special interest advocacy that have provided entitlements and were enacted when fiscal times were good.  Times have changed. 

Legislators and school leaders need to come together to either repeal or modify unfunded mandates, since it is unlikely that they will be able to find new funding.   A 2008-09 study of Westchester school districts illustrated that almost 20% of a district’s total budget is the result of unfunded or underfunded mandates.  In 2010-11 South Orangetown estimated that we were spending close to $22 million dollars towards such mandates.  While this does not mean that we can cut that amount, even a small percentage of mandate relief would allow districts to close the budget gap without having to cut into programs.

What is SOCSD’s plan to reduce its budget to close the budget gap of $2.4 million dollars?

We are in the beginning phase of this work.  As always, we will start with an effort to keep cuts away from the classroom; however, as noted this will become more difficult. Over the next few months we will present updates and seek community support on initiatives that may help us to find savings without affecting learning.  We will need parents as partners and other community members to help us to accomplish this goal.  Stay tuned for more information.