Schools

District Offers Early Glimpse of Budget Challenge Ahead

Meeting the tax cap mandate could mean $1 million in budget cuts.

Drafting a budget this year will present a formidable challenge for the Babylon School District as meeting the state-mandated tax cap could require cutting nearly $1 million in spend.

And slicing and dicing supplies budget lines and other operational costs won’t do the trick, say school administrators. It’ll be a matter of reducing programs and positions, and potentially boosting class size, district leaders said at Monday night's board of education meeting.

“The tax cap is going to have a monumental effect on New York school districts, even those like Babylon with good sound financials. It’s going to impact districts in ways we’ve never seen,” said Interim Superintendent Peter Daly, noting that in the past the focus had always been on giving voters a reasonable budget figure. Now, he says, it’s all about sticking to a maximum 2 percent tax levy increase.

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Board members on the finance committee said, “everything is on the table” in terms of the budget development, and emphasized “everything.”

In a short slide show presentation Interim Assistant Superintendent for Stephen Bilyk explained the state’s proposed formula for determining tax levy figure and how exemptions, such as debt service and capital project spend, will help certain districts avoid massive budget reductions. The problem for Babylon, Bilyk said, is the district is actually retiring debt service and doesn’t have capital expenditures as a budget factor.

Find out what's happening in Babylon Villagewith free, real-time updates from Patch.

As one resident noted, “Babylon is getting penalized for sound financial management.”

An initial assessment using the state’s proposed formula, which administrators said they hope is changed before final approval, shows that Babylon’s tax levy will actually be held to 1.59 percent. That figure is based on using the current state aid amount, which board members noted could change, as well as applying the same $2.7 million in fund balance to the budget.

An increase in fund balance is not a sustainable strategy, noted Bilyk. The proposed budget figure doesn’t yet factor in special education costs as those are constantly changing and haven’t been yet evaluated for the next year. Another unknown element, which will impact the actual tax rate for homeowners, will be town assessment figures.

Other unknowns include the impact of a new teacher’s contract that is under negotiation, as well as increases in retirement and healthcare costs.

The predicament that districts are facing, said board member Tom Melito, will “seriously open the dialogue about how communities finance public education.”

“Everyone in the state legislature, and the lawmakers, know what the impact of this will be, they approved it,” he added, noting that most of the public is not aware and urged residents to attend budget meetings.

The tax cap mandate can be overridden if 60 percent or more of the voters approve a budget that presents a 2.1 percent or higher tax levy. If that fails the district can resubmit the budget, reduce the budget or adopt, without a public vote, a budget with a 0 percent tax levy.

For the past three years Babylon’s budgets have kept the tax levy increase to an average of 2.08 percent, said Daly.

“We were able to do that without decimating areas due to timely retirements and a good fund balance strategy,” he said, adding that isn't the current scenario. He put up a slide visual of a locomotive heading straight toward the viewing audience.

“This is what’s coming,” he said.


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