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A Formula for Disaster in School Contingency Budgets?

Current State Law Does Not Account for Today’s Economy 


The actual math might bore you, but what comes after the equal sign could shock you and spell disaster for many school systems across this state. As the law stands today, when school budgets are voted down, New York State has a standard formula that dictates what the school budget then must be for the year.


As you have read many times in this paper, this “contingency formula” is based on the consumer price index or CPI. Because this CPI is at zero or negative as a result of 2009’s horrible economic environment, the formula would not allow for any increase in a school’s budget for 2010-11. Each year there are mandated costs coming from the state education department, state legislature, federal government and other areas which automatically increase each school’s costs beyond the previous year.

School boards and administrators across the state are warning that a zero percent increase or a decrease in a school budget would decimate the education they provide.  

One local school board trustee, Dr. Igor Webb of North Shore, voiced frustration this week to his voters and board at a meeting in Sea Cliff saying that while this is such an urgent issue that should require emergency action, no state representatives he approached was aware of any such action being proposed. 

“Every single legislator I spoke to, including the head of the Senate Education Committee, were unaware of the implications. This is not on the radar at all,” he submitted.

 Webb urged people to understand that it is essential to “find relief,” whether in the form of a suspension of the formula or the creation of a different formula.

“In good times and bad times some budgets fail. In this year, voters are justly angry about the state of the economy and justly angry about taxes. The school budget is one thing they get to vote on and even in strong districts we are all uncertain about what the outcome will be. Therefore, if this isn’t attended, there will be educational disasters across the state,” he warned.

The normal way this issue would be addressed in Albany is for Governor David A. Paterson to propose something to address this in his budget for the next year. He has. In what is called his Executive Budget, which he brings to the Senate and Assembly for debate and ultimately a vote, he has spelled out a provision:

“Contingency Budget Calculation: This proposal would prevent mandatory negative spending growth for school districts that are operating under a contingency budget by limiting the spending cap calculation to no less than the previous year’s spending levels. The current statutory provisions for the calculation of the contingency budget cap does not account for a period of deflation, which may apply to the 2009 calendar year.”

This means that at least schools would be able to spend no less than last year and not decrease their budgets. But, as mentioned at the start of this article, the concern is really that even to stay flat will cause major issues for all districts and force drastic cuts.

North Shore has stated at the same meeting in which it was brought up that a zero percent increase would result in 50 positions being cut.

“This would completely gut the entire North Shore program,” Webb told the Record Pilot.

The New York State Association of School Boards (NYSSBA), a lobbying group which helps bring education issues like this to the state, shares the view that the governor’s proposal is inadequate.

The NYSSBA testified at the Joint Legislative Budget Hearing on Education held by the Senate Finance Committee and the Assembly Ways and Means Committee.

David A. Little of the NYSSBA reiterated the fear that the public’s frustration with taxes and the economy will be “expressed at the one opportunity they have to vote against higher taxes; the local school district budget vote.”

He also echoed the fact that the “defeat of local school budgets this year or next will be catastrophic.”

Little submitted that current laws determining the school district contingency budget cap will force schools to “actually spend less than the previous year. To ask this in the face of double digit, uncontrollable costs like health insurance and retirement system contributions is unconscionable. When the only option available to school districts is to eliminate the jobs of those who prepare our state for the information age, that result is irresponsible.”

 Little and the NYSSBA propose a solution in the form of a five-year rolling average of the CPI, instead of just using one year’s figure, to determine contingency budgets for school districts. “…a degree of rationality must be restored to the dire conditions imposed by a contingency school budget,” he said.

Little told the Record Pilot that the danger in not addressing this issue is that in a time when New York State needs to churn out highly skilled, well educated graduates who can compete in the information age, the kind of destruction that will come to education here will not aid this goal.

Seventy percent of school costs are wrapped up in personnel,” he said. “All you can do is start eliminating the programs that are the very reason kids want to go to school. You end up with large classes and a dry curriculum and it becomes difficult to encourage learning and academic achievement when kids are hammered with the same dry stuff.”

The final threat, which Little, an Albany insider acknowledges: New York State does not generally pass its budget on time.

“I certainly have no information to predict when they’ll pass their budget,” he said. “There have been years that this happens after locals budgets are already passed.”

What does that mean? Even if these new provisions are debated and tweaked and finally end up in the state budget, they could be made official after schools have already had their budgets fail and have been forced to use the current formula.

As of this printing, no Senate or Assembly leader responded with a comment on whether or not an emergency provision will be made on this issue, or how the senate and assembly will weigh in on Paterson’s provision.