99% of school districts tap reserves

On Board Online • May 7, 2012

By Paul Heiser
Senior Research Analyst

School boards throughout New York State made tough choices this budget season, according to the results of a survey by NYSSBA and the New York State Association of School Business Officials (NYSASBO). Nearly two-thirds of districts plan on cutting teaching positions, more than half of school districts are set to increase class sizes, and a third will reduce extracurricular activities, including sports.

Meanwhile, the State Education Department (SED) reported that nearly all districts (98.7 percent) plan to use reserve funds to minimize their 2012-13 tax levies. Districts plan to use $1.3 billion in 2012-13 – an average of nearly $2 million per district. (In the current school year, school districts used $1.45 billion in reserves– an average of nearly $2.2 million per district.)

Districts are proposing spending increases of just 1.5 percent, on average, according to state Property Tax Report Card data.

About 92 percent of school districts are proposing tax levy increases at or below their maximum allowable tax levy that can be approved by a simple majority of voters. The remaining 8 percent are seeking supermajority approval of 60 percent or more.

Although spending increases are modest, the average school district property tax levy will rise by about 2.3 percent statewide. That is still more than one percentage point below the average 3.5 percent that boards could raise property tax levies in 2012-13 without exceeding their collective tax caps.

NYSASBO and NYSSBA conducted a survey of school business officials from April 20 to April 27 and received responses from 403 school districts – about 58 percent of the districts in the state.

Nearly two-thirds of districts (64 percent) reported plans to reduce teaching positions in the 2012-13 school year. Of those, 20 percent plan on cutting more than 10 teacher positions, and about 10 percent of districts plan on cutting more than 20 teacher positions. About one-quarter of districts said they had already cut more than 20 teaching positions in the previous two budget years, with some saying they cut more than 100 teaching positions.

Two-thirds of districts (66 percent) also plan on cutting non-teaching positions in the 2012-13 school year. Of those, more than 17 percent of them will cut more than 10 positions. About 14 percent of districts said they had already cut more than 20 non-teaching positions in the previous two budget years.

School districts said they would also take a number of actions that affect programs and services. More than half of school districts (53 percent) said they will increase class sizes in 2012-13 because of staffing cuts. Electives and extracurricular activities – including sports – are on the chopping block; four in 10 districts plan to reduce or eliminate them. Nearly a quarter of districts will need to slash extra help for students.

In addition, much-needed maintenance will be put on hold in 30 percent of districts. Three in 10 districts plan to curtail pupil transportation, leading to longer bus rides for students.

In constructing budget proposals, districts had to cope with the lasting effects of state aid cuts of $1.3 billion in 2011-12 and $1.4 billion the year before that. Although schools will receive an $805 million total aid increase in 2012-13, they are losing $608 million in federal Education Jobs Bill funding. Meanwhile, pension and health care costs continue to escalate.

“The survey results of our members clearly indicate that school districts have overwhelmingly complied with  the spirit of the tax cap, unfortunately to the detriment of their educational mission and financial stability,” said NYSASBO Executive Director Michael J. Borges. 

This has left a number of districts perilously close to facing what State Education Commissioner John King has called “educational insolvency,” in which districts lose the ability to provide a quality education. King has bemoaned the fact that some schools are cutting academics, including advanced placement courses, which help students become more competitive for college placements and the workplace. Early education has also taken a hit in many districts.

“If school districts are going to cope with the property tax levy cap on a long-term basis without gutting educational programs, they need more help from state government,” said NYSSBA Executive Director Timothy G. Kremer. “State lawmakers must grant relief from costly state mandates, such as the law requiring districts to pay annual ‘step’ salary increases to employees after a contract has expired. We urge them to tackle mandate relief before the end of this legislative session.”