Rising costs and state aid cuts
      lead to tough budget decisions for Mayfield

February 4, 2011

Mayfield Central School District, like most districts across the state, is grappling with difficult decisions as it begins to develop its 2011-12 budget. District officials are looking for ways to close a projected $1.6 million dollar funding shortfall without jeopardizing the district’s strong academic tradition.

“This is the most dire budget situation I’ve experienced during my 11 years as a school superintendent,” said Superintendent Paul G. Williamsen. “Between large state aid cuts, rising costs, the outstanding issue with Hudson River Black River (Regulating District) and the proposed two percent tax levy cap, we find ourselves in a very difficult situation.”

The nation's economic downturn leaves New York State with fewer funds. Governor Cuomo’s proposed budget includes cuts of $1.5 billion in state aid to schools during 2011-12. Under the proposed budget, Mayfield would lose $1.36 million in state aid or 13.89 percent from what it received this year.

Like most households, school districts must balance their revenue (income) with their expenditures (expenses). By law, school districts cannot simply borrow to meet needs; it must present a balanced budget where projected expenditures are offset by projected revenue. Mayfield raises revenue from two sources: school aid and local property taxes.
With declining state aid, the only way to increase revenue is to increase property taxes.

Shifting the entire burden of the funding gap to taxpayers would mean a double-digit tax levy increase — a move that would be unacceptable to the Board of Education and the community.

The revenue situation is further complicated by the Hudson River-Black River Regulating District’s (the district’s largest taxpayer) inability to pay its $354,000 in 2009-10 school taxes. At the end of this year, the regulating district will owe the Mayfield school district two years of property taxes plus penalties totaling more than $700,000. Fulton County has taken the lead to have the Regulating District pay its taxes.

Adding to the dilemma is Governor Cuomo’s proposed property tax cap — a move that would limit any increase in the tax levy (the total monies raised by property taxes) to no more than 120 percent the rate of inflation or two percent, whichever is less. Under the proposed law, that two percent increase would yield Mayfield only $168,000 in additional revenue unless a 60-percent supermajority of voters approved a budget exceeding the cap. Residents will vote on the proposed budget on May 17.

At the same time, teacher and staff salaries, healthcare, and state-mandated retirement costs will rise. The district must also budget for uncertain energy and fuel prices.

As the case in most school districts, approximately 70 percent of Mayfield’s budget is comprised of employee salaries and benefits. The district could realize the most savings by making cuts in that area, but eliminating positions – be it teachers or support staff – could have potentially long-term negative effects on the district’s academic programs.

 Last year, the board considered cutting many areas including college-level courses, athletics, expanded art and music courses, field trips and extracurricular activities. Given the current economic picture, even eliminating those programs would not save enough money to fill the current gap.

Williamsen – who will freeze his salary for the second year – has also asked the leaders from Mayfield’s three unions to ask their members to take a salary freeze. Because of the nature of public employee contracts, Mayfield cannot freeze salaries or reduce employee benefits without reopening their contracts — something both the district and the unions must agree to do.

So, where do we go from here?

There are no easy solutions this year, Williamsen said.

“We are all in this together. There is no one to blame and no one is at fault,” he said. “There is no way to sugarcoat it: we know there are very difficult decisions ahead. There will be cuts and some of them are going to be painful.”

If community members would like to give their opinion on anything budget related, the Board of Education invites residents to participate in the budget planning process by attending audit committee and board meetings leading up to the adoption of the 2011-12 budget proposal. All board meetings begin at 7 p.m., on the second floor of the high school library. The audit committee will meet at 6 p.m. on February 9th in the high school library.

Highlights of Governor's proposed budget

• Total aid is decreasing as a result of a Gap Elimination Adjustment assessed to all districts on a progressive basis, according to the state Division of Budget. The Gap Elimination Adjustment, a mechanism for the state to close its budget deficit, is larger than the total year-to-year funding cut of 1.5 billion. This is because it is based on the amount of aid the state is reducing from a funding increase scheduled to take effect, rather than current year levels. The GEA for Mayfield CSD is about $1.87 million, according to the state aid breakdown provided by the Division of the Budget.

• Categorical aids, such as transportation, building (construction), and BOCES reimbursements, to name a few, would increase under the Governor's proposal. Across the categories, Mayfield would see moderate declines in most except for transportation.

• A report from the Governor's Mandate Relief Redesign Team is expected by March 1. In appointing this panel last month, he charged it with conducting a rigorous and comprehensive review of mandates imposed on school districts and other local taxing districts in order to look for the best and most cost-effective ways to deliver mandated programs and services and identify those that are ineffective, unnecessary, outdated and duplicative.

• The Governor's budget proposal includes two, $250 million grant funding pools for school districts: One for districts that demonstrate significant improvements in student performance, and another for those that undertake long-term structural changes to reduce costs and improve efficiency.

• The Governor's budget proposal continues the STAR property tax relief program. It introduces a mechanism to prevent benefit increases when property values decline, and also limits the growth in exemption benefits to two percent annually. The reimbursement rate for districts providing required special education services to students in the summer would be adjusted, resulting in a potential cost shift from the state to individual districts.