Working Budget for School Year. Community Budget Forum & Online Meeting March 3, 2015

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1 Working Budget for School Year Community Budget Forum & Online Meeting March 3, 2015

2 Tonight s Agenda Welcome & explanation of tonight s meeting Board President James Maughan Budget Overview Superintendent Patrick McGrath Goals when building our budget, how we build our budget, budget challenges Investing in BH-BL Education Assistant Superintendent for Curriculum & Instruction Maryellen Symer Highlights of continued commitment to instruction (Chromebook deployment, RTI expansion, academic program maintenance & expansion) Working Budget Assistant Superintendent for Business Chris Abdoo Expenses & Revenues Impact of GEA Tax Levy Cap Question & Answer session

3 Every educational decision has a dollar impact. Every dollar decision has an educational impact.

4 Meeting Process We are using online meeting software so people can participate via their computers. Please bear with us as we try accommodate both audiences: those in the middle school cafetorium and those participating online. Goals tonight are to share information and answer budget-related questions. To pose a question, you can: Go to the provided microphone at the panel table. Write your question on the provided index cards. We will collect them. Online viewers can type questions in their Q&A box on their computer screen. (As is customary with privilege of the floor at board meetings, we kindly request that residents who wish to pose a question please also say, write or type their full name before asking questions.)

5 Budget Development Budget Goals We want to maintain and improve upon our existing programs. We want to be sensitive to what our community can afford. We want to balance the budget without using reserves for the operating budget. Budget Context High level of uncertainty this year. State aid levels will affect overall expenditure plan. Financing of 2013 Renovations Referendum becomes part of the budget. 5-Year Financial Plan Board of Education has developed a 5-year financial plan. Models impact of current budgetary decisions based on a series of assumptions. These assumptions account for over 95% of our revenue and expenditure items that we regularly monitor and adjust.

6 BH-BL Budget Development Important statewide issues that affect BH-BL Governor s approach to this year s budget. Reductions in State Aid over past several years. Foundation Aid Gap Elimination Adjustment (GEA) Allocation of State Aid.

7 Governor s approach to this year s budget Opportunity Agenda Statewide Teacher Evaluation System Merit-based Performance Pay Increase Charter School Cap Expedite removal of Ineffective Teachers Increase publically supported preschool (3 & 4) Transform Failing Schools Executive Budget Model gives Governor significant leverage in budget process

8 1. Advocate separating APPR issues from budget process The last APPR plan that this Governor put together is what got us to the point he complains about now. We have heard repeatedly that the Reform Agenda of the past five years was filled with good ideas, but was poorly rolled out. Are we making the same mistake again? This is too important to write in 30 days. What is the process for crafting an effective APPR plan? Are practitioners being consulted?

9 1. Advocate separating APPR issues from budget process, con t 50% based on a New York State test scores. Only about 25% of our teachers teach courses that end in a growth score. Finding a score for the other 75% could be very cumbersome and subjective. Growth scores and Value Added scores are new and untested. Tests being used to serve multiple (sometimes contrary) purposes. 50% is a large proportion to be based on a test score. Will the focus be too heavily driven by student test performance?

10 2. Advocate for the elimination of the Gap Elimination Adjustment (GEA) Foundation Aid Formulas Based on Campaign for Fiscal Equity v. State of NY (2003), the state was ordered to increase the funding to education based on need. State has not fully complied. Gap Elimination Adjustment (GEA) Deductions from overall operating aid to help the state balance its budget. Different districts are advocating for restoration to come in different ways.

11 Total State Aid to BHBL (in millions)

12 3. Ask NYS to look at how districts are designated for School Aid purposes When the state was assessing the GEA in 2008, they used a designation that was historically used by the NYS Education Department to describe demographics of the various districts in the state. Each district s designation as High Need, Average Need, or Low Need affected the GEA assessed to each district. Problematic for two reasons: 1. Uses demographic information from 2000 census. Outdated in Uses a designation designed to describe demographics as a measure of the local taxpayers ability to pay. Results in significant inequities for a district like BH-BL.

13 BH-BL: Low Need Designation

14 BH-BL: Low Need Designation Comparison

15 District Income Wealth per student Property Wealth per student Combined Wealth Ratio State Need Designation Saratoga $219,600 $807, Average Need North Colonie $214,735 $694, Low Need Voorheesville $209,949 $628, Low Need Source: NYSASBO NYS Factbook & Questar III State Aid Planning Workshop Archives State Aid Factors Bethlehem $200,964 $506, Low Need Guilderland $196,506 $562, Low Need Niskayuna $189,774 $525, Low Need Shenendehowa $180,585 $521, Average Need South Colonie $167,085 $631, Average Need East Greenbush $165,355 $531, Average Need Schalmont $163,912 $647, Average Need Burnt Hills $150,811 $462, Low Need Mohonasen $120,498 $402, Average Need

16 District Income Wealth per student Property Wealth per student Combined Wealth Ratio State Need Designation Scarsdale $944,495 $1,454, Low Need Chappaqua $711,300 $1,066, Low Need Southampton $579,792 $11,530, Low Need Great Neck $486,666 $2,141, Low Need Jericho $456,430 $1,453, Low Need Pittsford $347,864 $533, Low Need Fayetteville $246,956 $428, Low Need New Hartford $182,912 $450, Low Need Burnt Hills $150,811 $462, Low Need Source: NYSASBO NYS Factbook & Questar III State Aid Planning Workshop Archives State Aid Factors

17 Budget Development How we build the school budget Budget

18 Investing in Education Investment in instructional technology: Grades 3-6 Chromebook deployment Full-Day Kindergarten Primary Enrichment Response to Intervention (RTI) expansion: ELA and math Academic program maintenance & expansion: First Tech Challenge in Robotics; Science Research; New CHS courses (Enriched Physics, Fashion & Textiles, Advanced Ceramics) Continue academic excellence: 96% Regents Diploma or higher; 91% to higher education (57% to 4-year colleges and 34% to 2-year colleges)

19 Revenues: GEA State Aid & Governor s Budget Proposal The Gap Elimination Adjustment, or GEA, was introduced in 2010 by former Gov. Patterson as a way for the state government to close its budget deficit. It did so by spreading the funding shortfall around to all school districts through a GEA reduction to the overall Foundation Aid due to schools. BH-BL has lost nearly $14 million in aid due to the GEA. BH-BL is estimated to lose an additional $1.4 million in Several efforts statewide to restore all or part of this reduction are underway. What you can do! Advocate for the elimination of the GEA. Visit our website, to learn how.

20 Revenues Tax Levy Cap Limits a district s overall tax LEVY (total amount it can collect), not tax rates or individual tax bills. Sets a higher threshold for voter approval IF districts exceed their levy limit--60 vs. 50 percent voter approval. Levy limit is specific to each school district, based on a state formula. Tax levy cap changed contingent budget rules: A twice failed budget = 0% levy increase.

21 Revenues: Tax Levy Cap estimates Prior year ( ) BH-BL tax levy $36,652,136 Tax base growth factor (if any,comes from ORPS) x $36,989,336 Add - PILOTS (Payment in Lieu of Taxes) $6,745 Subtract - Capital Tax Levy FYE 6/30/2015 -$671,238 $36,324,843 Allowable Growth Factor (lesser of CPI or 2%) x $36,913,305 Subtract - PILOTS (Payment in Lieu of Taxes) $38,900 Total Tax Levy Limit before Exclusions $36,874,405 Add - Capital Tax Levy FYE 6//30/2016 exclusion +$767,383 Total BH-BL Tax Levy Limit plus Exclusions $37,641,788 (2.7%)

22 Impact of New Construction Tax base growth factor (if any, comes from ORPS) x Represents growth in the property tax base from new construction. Estimated to result in a tax rate increase that is significantly less than the tax levy increase. Example: A 2.7% tax levy increase might result in a 1.78% tax rate increase depending on this and other factors such as the equalization rate. Year Tax Levy Increase Average Tax Rate Increase % 1.96% % 2.00% % 1.13%

23 Government Efficiency Plan In , in addition to complying with the property tax cap, the property tax rebate residents received will also be dependent upon a school district having a state-approved Government Efficiency Plan. Efficiency Plans must be submitted to the Director of the New York State Budget by June 1, Division of the Budget will notify the Department of Tax & Finance (they issue rebate checks) of approval of Government Efficiency Plans by July 31, BH-BL will be submitting a Government Efficiency Plan and expects to receive approval from the Director of the Budget.

24 Capital Portion Estimates for school year $800,000 transfer from Insurance Recovery Reserve (Hostetter flood) to Capital Project as promised in the 2013 Renovations Referendum. Results in a 1.32% budget-to-budget increase with no impact on tax levy. Increase of Debt Service by $261,486 with corresponding building aid of $202,880 (estimated based on current law, notwithstanding Governor s proposals). Represents 0.16% increase in the tax levy, which is the first part of the estimated overall 1% increase described in the 2013 Renovations Referendum.

25 Working Budget Expected increases & decreases Employer contribution to ERS and TRS (Employee and Teacher Retirement Systems) should be significantly lower mostly due to favorable returns in the investment performance of these systems. Health insurance costs will increase significantly due to mandates associated with the Affordable Care Act and other factors. Staff salaries will increase but will also be offset by retirements. (Total number of retirements will be determined at a later date.) BH-BL s contract with the NYS Municipal Energy Consortium will be renewed in at a new rate. The overall renewal rate is still unknown but could result in a significant change in the budget.

26 Long-term Financial View 5-year plan Board has developed long-term spending and revenue trends and forecasts. Forecast based on past history and best projections for: contractual salary increases, healthcare costs, pension contributions, staffing levels, debt service, special education enrollment, state aid, tax levy caps, and other factors.

27 Long-term Financial View Spending Annual Spending

28 Long-term Financial View Revenue Annual Revenue

29 Long-term Financial View - Fund Balance Current baseline predicts future spending will be greater than revenue. Board has planned in short term for difference to be drawn from fund balance. But without mitigation of long-term reductions in spending and cost structure, or increases in state aid and taxes, the fund will be depleted. The district is healthy. Long-term planning and careful controls will be needed to sustain our financial strength.

30 District Quarterly Financial Dashboard

31 Advocacy: Your voice counts! The trend of reductions to education funding cannot continue without threatening the quality and equality of the education available to all students. The time for change is now. The voices of school leaders and lobbyists for state-level education groups simply are not enough, as recent legislative sessions have shown. Elected officials need to hear from the people who are most directly impacted by their decisions year after year the students, parents, employees, residents, community groups and business owners in BH-BL.

32 How to advocate for your schools Becoming an advocate for education is not as hard as you might think. Anyone can become involved, at any level they choose. The only prerequisite necessary is a desire to fight for our students and our schools. Empower yourself. Learn about the issues affecting BH-BL. (GEA, unfunded mandates, inequitable state aid) Reach out to your legislators. Send letters, s, make phone calls, meet face-to-face, and invite legislators to school or community events. Advocate through the media. Write a letter to a newspaper editor and share with local legislators. Share editorials and news articles with local legislators. Advocate in the community. Organize a letter-writing campaign, speak to local groups, use social media to spread the word. Advocacy Tips & Toolkit available on our website: (Copies available on side table)

33 Budget Process What happens next? March 17: Finance Committee Meeting, 7 p.m., HS Library March 31: Finance Committee Meeting, 7 p.m., HS Library April 14: Public Forum on the Nearly Completed Budget, 7:30 p.m., Middle School cafetorium & streaming online April 15: Finance Committee Meeting, 7 p.m., HS Library April 20: Board of Education candidates filing deadline April 21: Board votes on proposed budget proposal, 7:30 p.m., HS Library May 5: Budget Hearing, 7:30 p.m., MS Library May 13: Meet-the-Candidates Night, 7:30 p.m., MS Cafetorium May 19: Budget Vote, 7 a.m. to 9 p.m., HS Gym Thank you!