North Syracuse CentralSchool District

Budget Update 2020-21

January 27, 2020

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Agenda

Governor’s Budget Proposal – School Aid

Preliminary Tax Cap Calculation

Fund Balance & Reserves Projection

Budget Process Timeline

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Governor’s Budget ProposalSchool 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%.

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Projected 2019-20 vs. Proposed 2020-21

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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%

Approved 2019-20 vs. Proposed 2020-21

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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%

Approved 2019-20 vs. Projected 2019-20

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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%

Foundation AidFunding 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.

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Foundation Aid ShortfallCampaign for Fiscal Equity Law Suit ($165 Million Short)

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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)

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”:

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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

Tax Cap CalculationPreliminary Estimate

Tax Levy 2019-2020: $90,209,332Tax Base Growth Factor: x 1.0073

90,867,860PILOT Revenue for 2019-2020: 379,161Tax Levy for Capital for 2019-2020: (2,311,997)

88,935,024Allowable Levy Growth Factor: x 1.0180

90,544,748Estimated PILOT Revenue for 2020-2021: (379,161)Tax Levy for Capital for 2020-2021: 2,393,520Other Exclusions (ERS & TRS > 2%): 0Available Carryover: 0 Tax Levy Limit Plus Exclusions: $92,559,107Tax Levy Limit Increase: $ 2,349,775 (2.60%)

Estimated tax levy increase on a home of $100,000 BEFORE STAR is $61

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UNASSIGNED FUND BALANCEProjected 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.

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Projected RESERVES June 30, 2020

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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.

2020-2021 BUDGET PROCESS TIMELINE

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October 7th

BOE Approval of Budget Calendar

December 16th - Board of Education

Budget Assumptions

December 18th – February 21st

Principals, Directors & Cabinet and BOE subcommittee develop initial budget

January 27th – Board of Education

Governor’s Budget proposal

Preliminary Tax Cap Calculation

Fund Balance & Reserve Projections

February 24th – Board of Education

Initial Budget

March 16th – Board of Education

Budget Update

Final Tax Cap

Approve Bus Bond Proposition

Approve Notice of Budget Hearing/Election

April 6th

Proposed Budget Presentation

Budget Discussion & Deliberation

BOE Adoption of Budget

April 20th

BOCES Election and Budget Vote

May 5th

Budget Hearing

May 19th

Budget Vote