SCHOOL TAX LEVY TO RISE BY LESS THAN HALF A PERCENT NEXT YEAR; ESTABLISHMENT OF CAPITAL RESERVE FUND TO ALSO BE ON BALLOT THIS MAY
January 16, 2016 -- Schools Superintendent Dr. Edward Melnick offered a brief presentation of his initial budget outline at the North Shore Board of Education meeting on Thursday, January 14. The $99,494,105 proposal represents an increase of 1.96% over the current budget, and a tax levy increase of $381,333 or 0.4%, over this year - within the tax cap established by New York State. The "growth factor" that is determined by the State to calculate each district's individual tax levy limit, Dr. Melnick said, will be near 0% because of the past year's very low inflation rate. Additionally the Board will put before voters in May at the time of the budget vote a proposition asking voters to approve the establishment of a capital reserve fund.
The mild increase in spending over last year is in part a result of the continuing decline in required employer contributions to the Teachers Retirement System, which will help offset increases in other budget categories. After having decreased by $1.4 million this year over last year, the District will see a further decline in the percentage of payroll it will have to put towards teachers' retirements from 13.26% of total payroll to 11.5%. According to the budget draft posted on the District Website on Friday, teacher pension costs for the district will decline by about $250,000, while District contributions for those employees in the New York State Employee Retirement system (ERS) will decline by more than $300,000. Health insurance costs, however, according to the budget draft are expected to increase by about $440,000 negating much of the pension savings. Overall the amount that is being budgeted for employee benefits is remaining more or less flat from this year into next.
In addition to the precise figure of the tax levy limit, there are other unknowns going into the budget season including the precise amount of state aid the district will receive, and the total payroll.
In response to questions from Northwordnews at Thursday's meeting, Assistant Superintendent for Business Olivia Buatsi said that she estimated an increase of $400,000 in aid from Albany, with $135,000 of that resulting from the phasing out of the Gap Elimination Adjustment that was passed in 2010 that greatly cut state aid to districts at the height of the "Great Recession."
The biggest uncertainty is the amount that will be expended on instructional salaries with the teacher's contract expiring at the end of June. Asked by Northwordnews at the meeting what the district was anticipating for the percentage change overall in instructional salaries. Dr. Melnick replied that making that information public would undermine the district's position as it enters negotiations with teachers.
All staffing, programs and services, the Superintendent said, would remain at the same level as during the 2015-16 school year.
The gap between the total proposed budget of $99,494,105 and the $89,962,098 raised by the tax levy would be closed with state aid and approximately 1.5 million allocated from reserves, which according to information given by district officials at board meetings last year, are flush. Any further change in State Aid or in the tax levy limit, would lead to an adjustment in the amount taken from reserves, Ms. Buatsi said.
According to an analysis by Northwordnews, a 0.4% increase in the tax levy, with all other things being equal, would result in the average homeowner's taxes rising by about three dollars a month.
In addition to the budget, Dr. Melnick said that a second proposition would appear on this May's ballot asking voters to grant the district permission to establish a Capital Reserve that can be funded up to $8,361,000. If approved, under New York State law, the district can over the next ten years decide how much to put in the reserve each year from unexpended funds or by transfering funds from other reserves, with the total amount deposited not to exceed that which voters approved. Money held in the Capital reserve fund can only be expended with voter approval.
Dr. Melnick said that the funds held in the capital reserve would go towards projects at each of the district's five schools - and would include among other projects installing air conditioning in the high school gymnasium, as well as in the Middle School Cafetorium, the Sea Cliff School Cafeteria, Glen Head Schools Cafeteria and Library, and Glenwood Landing Schools' Cafeteria and Library. (Click here for Dr. Melnick's Power Point Presentation that lists projects.)
The line by line discussion of the first budget draft will begin at the School Board’s next meeting on January 28. The first budget draft is now available on the District Website - Click Here for link.
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