Adcock: Pension Costs Going Up

Written by Ronald Scaglia Friday, 30 November 2012 00:00

Increase could impact budget in 2013-14

There is still a long way to go before the Massapequa School Board adopts a budget for the 2013-14 school year. Many of the factors that will impact the final budget presented to voters in the spring have yet to be determined. However, the news coming in on one of those factors is not good. At a recent school board meeting, Massapequa Deputy Superintendent Alan Adcock said the percentage that school districts will have to contribute to retirement costs is going to be between 15.5 and 16.5 percent. Adcock said this is up from the current level of 11.84 percent. He further stated that this represents a 30 to 40 percent increase for the Massapequa School District and will result in an increase in costs of about $4.85 million.

“I was extremely disheartened,” remarked Adcock about the increase. “The last time it was this high was 1987.”

Adcock further elaborated that the percentage that districts must contribute to pensions is based on how the stock market is performing. With the stock market having recently dipped, Adcock said he is fearful that further increases could be coming in future years.

“I’m really concerned that this has not reached a ceiling yet,” said Adcock as he alluded to a recent 1,000 point decline in the Dow Jones Industrial Average.

As for how this will impact the 2013-14 budget, Adcock said that there are too many uncertainties to determine as of now. The district is appealing a decision to try and transfer reimbursement of tax certiorari payments back to the county. The actual tax percentage of the tax cap for next school year is yet to be established and the district was just informed that it will no longer be allowed to offer health insurance declinations for employees who have dual coverage in the Empire Plan. This would add to district expenses, although more information will be forthcoming on how much of an impact this will have. If everything breaks badly, it is possible that the district could be required to make significant reductions in order to comply with the tax cap.

Adcock presented some of the numbers at the meeting. In addition to the pension costs, health insurance costs are increasing 14 percent, which will result in an increase of around $2 million for the district, according to Adcock. The deputy superintendent added that contractual obligations for salaries would increase $1.9 million based on the last teachers’ contract with a zero percent increase. Even without an increase, teachers would still get increases for an added year of service plus any educational credits earned, hence the increase. Adcock also estimated that not being able to offer health insurance declinations to the approximately 300 employees who are dually covered under the Empire Plan could add $3 million in expenses to next year’s budget, although the district is waiting direction from the Empire Plan for further information. The cost of tax certiorari payments refunds would add about $1.5 million in expenses, if the appeal does not go in the district’s favor. Even though, the district expects to save about $1.7 million next year due to a reduction in debt services, the possibility of a shortfall looms in order to meet the tax cap regulations.

Adcock was quick to caution that a shortfall is far from a certainty. He said that a lot can change between now and the spring. However, Trustee Gary Bennett still expressed concern.

“It’s a contract year and our teachers haven’t even asked for anything,” Bennett remarked. “Teachers themselves are not driving up salaries. This is mandated. It’s just part of doing business in public education in New York State.”

Adcock also addressed the issue of tax increases that are not consistent with the 2.2 percent increase that the district adopted last spring. He said his office has received many calls from residents asking why their taxes have increased well beyond 2.2 percent.

The deputy superintendent explained that the district’s total tax collection is an increase of only 2.2 percent. However, he further elaborated how that is divided among the tax base is a function of the assessment system. He explained that if the assessed value of a home remains constant from year to year, while the overall assessment values of all the homes in the district decline, that home would then be responsible for a higher portion of the taxes assessed and would see an increase greater than 2.2 percent. Conversely, a home with a significant decline in assessed value, a steeper decline than the rest of the tax base, would actually see a decline in taxes, even though the budget had called for a 2.2 percent increase.

Adcock advised the audience that those who successfully grieve the assessment value of their homes are more likely to see a tax decrease or less of a tax increase than those who do not. He also added that this issue of inconsistent tax increases is happening “on every block in Massapequa.”

The board also approved teacher professional development for health teachers to attend a workshop focused on awareness and sensitivity for students experiencing difficulty in social settings because of sexual orientation. The measure came up at the October board meetingand failed when three trustees did not vote in favor. Trustee Tim Taylor voted against it, Trustee Joseph LaBella abstained, and Board President Maryanne Fisher was absent at the October meeting. This time it passed as Fisher voted in favor as did trustees Gary Bennett and Jane Ryan. Taylor and LaBella voted against.