NORWICH – Most local districts don’t tackle the budget until after the first of the year, but in light of Governor David Paterson’s recent decision to freeze aid payments and the increasing uncertainty about future aid, some area schools aren’t wasting any time in taking a closer look at their fiscal positions.
“We’re not in Kansas anymore,” said Deputy Superintendent Margaret Boice, as she provided members of the Norwich City School District’s board of education with an overview of the district’s fiscal outlook on Wednesday.
“This coming year is going to be challenging,” she reported, as she reviewed a number of factors which play a role in the district’s financial position, including Paterson’s deficit reduction proposals, federal stimulus through the American Recovery and Reinvestment Act and the impact of the increasing demands of un-funded mandates. And then there is the matter of the governor’s decision to hold December aid payments.
According to Boice, Norwich did receive an aid check in December, but it was short by approximately $157,000. There is still hope that the district will receive those remaining funds at some point, she said, if only because of the number of lawsuits filed by a number of different professional organizations.
“We’re in flux, there is no question. It hasn’t been this crazy in quite some time,” said Boice, who has been a school business professional for more than two decades, the last 15 of which has been spent at Norwich.
The deputy superintendent used historical data to project the potential impact on the district based on a number of different aid scenarios.
“That’s not pretty,” she commented, referring to a graph which depicting what would happen if the district experienced a 5 percent decrease in aid over each of the next 5 years.
The best Norwich can hope for is state aid to stay the same, she said, but even that will be a challenge as district expenses will continue to rise due to contractual wage increases and the rising cost of health and retirement benefits.
“We’re a people organization,” she said, explaining that between 60 and 70 percent of the district’s annual budget is allocated toward salaries, benefits and other personnel-related expenses.
The district will also face a $1.2 million “funding cliff” after federal stimulus funds are exhausted next year, Boice reported, an amount roughly equivalent to a 12 percent tax levy increase.
But there are a few rays of hope on the horizon, according to the deputy superintendent. One of which is natural gas exploration.
“I believe it’s going to have a positive impact,” she explained, through either growing the local tax base or creating jobs. There is also a chance that, with the acreage the school system owns on West Hill, the district may see a more direct benefit as well. While the district has no intention of leasing its own mineral rights, it could still face compulsory integration if drilling occurs on neighboring properties.
There may also be an opportunity to secure grant funding through Race to the Top, a competitive grant program for which President Barack Obama has set aside $4.35 billion in federal funds to spur education reform.
“It’s a huge pot of money to fund education,” said Superintendent Gerard O’Sullivan, explaining that New York State could qualify for upwards of $700 million through the program, which would then be allocated to individual districts across the state based on the existing formula for Title 1 aid.
While the proposition had been previously held up at the state level, New York’s new education commissioner, David Steiner, is pushing for all schools to complete a memorandum of understanding affirming their participation. The documents, which must be filed by Jan. 8, are to be signed by the superintendent, board of education president and president of the local teachers union, in this case the Norwich Educators Organization.
“Either you get in on it now (or not at all),” said O’Sullivan, who stated he had already contacted NEO President Erika Kwasnik regarding the matter and planned to meet with the union’s leadership prior to the deadline.
Whether or not New York secures this federal funding, schools across the state will continue to face fiscal challenges as long as Wall Street, which makes up roughly 60 percent of the state’s revenues, founders, the superintendent reported.
“We have to pray the national economy recovers in the next year and a half,” he said.