North Syracuse Central School District Budget Update 2020-21 - PowerPoint PPT Presentation

North Syracuse Central School District Budget Update 2020-21 January 27, 2020 1

Agenda  Governor’s Budget Proposal – School Aid  Preliminary Tax Cap Calculation  Fund Balance & Reserves Projection  Budget Process Timeline 2

Governor’s Budget Proposal School Aid Highlights  The governor’s proposal increases education funding by $826 million, or 3%, for the 2020-21 fiscal year, bringing the total education budget up to $28.5 billion. Of that total, a $504 million boost in Foundation Aid, plus a $200 million allocation dedicated for "targeted high-need district Foundation Aid .“ (NSCSD is not a targeted high-need district)  The proposal is short of the $2 billion increase in funding state education officials requested in December.  Apparently the governor has proposed some changes to special education funding and the consolidation of a number of the reimbursements (transportation, construction, and other expenses). These were not reflected in the aid runs. We need to learn more about these so we can understand the potential impact on NSCSD.  The aid runs received did reflect the Governor's proposal to consolidate certain expense- based aids, including BOCES Aid and instructional material aids (hardware, software, library and textbooks aids into Foundation Aid.  The governor’s proposal also increases charter-school tuition in alignment with public-school spending, and provide New York City charter schools with a total per-pupil funding increase of 5.3%. 3

Projected 2019-20 vs. Proposed 2020-21 Gen Rpt Executive Difference Aid Projection Budget $ % 2019-20 2020-21 Foundation Aid 46,734,982 54,409,522 7,674,540 16.4% Excess Cost - Private 397,437 406,037 8,600 2.2% Excess Cost - Public 4,684,912 4,383,843 -301,069 -6.4% Subtotal 51,817,331 59,199,402 7,382,071 14.2% Hardware & Technology 143,741 0 -143,741 -100.0% Software, Library, Textbook, 707,686 0 -707,686 -100.0% Transportation 8,501,629 8,753,081 251,452 3.0% BOCES 5,204,155 0 -5,204,155 -100.0% Subtotal 14,557,211 8,753,081 -5,804,130 -39.9% Total (Without Building Aid) 66,374,542 67,952,483 1,577,941 2.4% Building Aid 3,769,063 3,649,402 -119,661 -3.2% TOTAL STATE AID 70,143,605 71,601,885 1,458,280 2.1% Universal Pre-K 606,120 606,120 0 0.0% TOTAL STATE AID w/ Pre-K 70,749,725 72,208,005 1,458,280 2.1% 4

Approved 2019-20 vs. Proposed 2020-21 Approved Executive Difference Budget Budget $ % 2019-20 2020-21 Foundation Aid 46,735,862 54,409,522 7,673,660 16.4% Excess Cost - Private 490,053 406,037 -84,016 -17.1% Excess Cost - Public 2,975,653 4,383,843 1,408,190 47.3% Subtotal 50,201,568 59,199,402 8,997,834 17.9% Hardware & Technology 158,087 - -158,087 -100.0% Software, Library, Textbook, 706,892 - -706,892 -100.0% Transportation 8,272,152 8,753,081 480,929 5.8% BOCES 5,307,077 - -5,307,077 -100.0% Subtotal 14,444,208 8,753,081 -5,691,127 -39.4% Total (Without Building Aid) 64,645,776 67,952,483 3,306,707 5.1% Building Aid 3,934,238 3,649,402 -284,836 -7.2% TOTAL STATE AID 68,580,014 71,601,885 3,021,871 4.4% Universal Pre-K 606,120 606,120 0 0.0% TOTAL STATE AID w/ Pre-K 69,186,134 72,208,005 3,021,871 4.4% 5

Approved 2019-20 vs. Projected 2019-20 Approved Gen Rpt Difference Budget Aid Projection $ % 2019-20 2019-20 Foundation Aid 46,735,862 46,734,982 -880 0.0% Excess Cost - Private 490,053 397,437 -92,616 -18.9% Excess Cost - Public 2,975,653 4,684,912 1,709,259 57.4% Subtotal 50,201,568 51,817,331 1,615,763 3.2% Hardware & Technology 158,087 143,741 -14,346 -9.1% Software, Library, Textbook, 706,892 707,686 794 0.1% Transportation 8,272,152 8,501,629 229,477 2.8% BOCES 5,307,077 5,204,155 -102,922 -1.9% Subtotal 14,444,208 14,557,211 113,003 0.8% Total (Without Building Aid) 64,645,776 66,374,542 1,728,766 2.7% Building Aid 3,934,238 3,769,063 -165,175 -4.2% TOTAL STATE AID 68,580,014 70,143,605 1,563,591 2.3% Universal Pre-K 606,120 606,120 0 0.0% TOTAL STATE AID w/ Pre-K 69,186,134 70,749,725 1,563,591 2.3% 6

Foundation Aid Funding Shortfall  The Laws of 2007 reformed the State’s method of allocating resources to school districts by consolidating some thirty existing aid programs into a Foundation Aid formula. This formula distributes funds to school districts based on the cost of providing a sound basic education and adjusted to reflect regional costs.  Albany committed to phasing in the Foundation Aid formula over time. The promised phase in has not happened.  The Governor now wants to replace Foundation Aid with a new funding formula called the Education Equity Formula . 7

Foundation Aid Shortfall Campaign for Fiscal Equity Law Suit ($165 Million Short) Enacted State Budget/School Year Current Year Aid Full Phase-in Level Shortfall 2007-08 $38,127,395 $51,905,964 ($13,778,569) 2008-09 $42,285,090 $54,710,908 ($12,425,818) 2009-10 $42,317,268 $59,749,290 ($17,432,022) 2010-11 $42,317,268 $59,606,170 ($17,288,902) 2011-12 $42,317,268 $56,889,215 ($14,571,947) 2012-13 $42,579,693 $57,754,076 ($15,174,383) 2013-14 $42,699,660 $59,296,055 ($16,596,395) 2014-15 $43,178,688 $53,814,000 ($10,635,312) 2015-16 $43,324,523 $52,716,600 ($9,392,077) 2016-17 $43,747,558 $53,135,617 ($9,388,059) 2017-18 $44,998,315 $53,278,729 ($8,280,414) 2018-19 $45,948,242 $56,522,084 ($10,573,769) 8 2019-20 $46,735,862 $57,224,582 ($10,488,720)

Implications for NSCSD  Foundation Aid continues to be an issue. The governor’s proposal to consolidate other aids into foundation aid only confuses the issue further.  We anticipated the drop off in building aid consistent with final debt payments made on older capital project debt. This timing is perfect as we begin the renovation of KWS Bear and complete roof projects over the next few years that will result in new debt.  Our total projected state aid increase under the governor’s proposal is 2.1% or $1.5 million. This will not be adequate to balance the 2020-21 budget.  Consider the following which may result in a possible “Budget Gap”: Know Expenditure Increases Compensation 3.65%Recent Contract Negotiations Health & Related Benefits 6.00% Healthcare Research Institute projected 2020’s medical cost trend. Teacher's Retirement 15.69%Published projection by TRS Employee Retirement 1.911%Published rate by ERS Compensation and Benefits represents 78.46% of the Budget 9

Tax Cap Calculation Preliminary Estimate Tax Levy 2019-2020: $90,209,332 Tax Base Growth Factor: x 1.0073 90,867,860 PILOT Revenue for 2019-2020: 379,161 Tax Levy for Capital for 2019-2020: (2,311,997) 88,935,024 Allowable Levy Growth Factor: x 1.0180 90,544,748 Estimated PILOT Revenue for 2020-2021: (379,161) Tax Levy for Capital for 2020-2021: 2,393,520 Other Exclusions (ERS & TRS > 2%): 0 Available Carryover: 0 Tax Levy Limit Plus Exclusions: $92,559,107 Tax Levy Limit Increase: $ 2,349,775 (2.60%) Estimated tax levy increase on a home of $100,000 BEFORE STAR is $61 10

UNASSIGNED FUND BALANCE Projected June 30, 2020 Unassigned Fund Balance at 6/30/19 (5.34% of Budget) $ 8,904,768 Refund from NYS for Final Cost Report Penalties $(2,235,295)(1) Estimated Revenue in Excess Budget 2019-20 $ 1,563,000 (2) Estimated Expenditures in Excess of Budget 2019-20 $(1,650,000)(3) Projected Unassigned Fund Balance – 6/30/20 $ 6,582,473 Estimated Budget for 2020-2021 (plus 3.5%): $ 172,600,000 Estimated Percentage of Budget: 3.8% (1) Voters approved the appropriation of $2.3 million of Fund Balance to the KWS Bear renovation project in a referendum on December 17, 2019. (2) This amount represents additional state aid due primarily to higher than planned Excess Cost Aid (special education). (3) This amount represents additional special education costs of $2.4 million, which generated the additional state aid revenue, plus additional compensation costs due to recent contract negotiations, partially offset by favorable expense variances in medical, retirement and utilities. 11

Projected RESERVES June 30, 2020 July 1, 2019 June 30, 2020 Tax Certiorari $2,023,592 $2,051,922 Worker’s Compensation $2,131,529 $2,161,370 General Liability $1,011,727 $1,025,891 Debt Service $1,939,084 $1,966,231 Capital (a) $2,506,211 $ 523,438 Total $9,612,143 $7,728,852 (a) Voters authorized the establishment and funding of $2.5 million in September 2015. Approximately $2 million of these funds will be used in connection with roof projects approved by the voters in September of 2017. 12