BC News

Aid cuts proposed by Governor set stage for BC's own budget process
Release Date: January 20, 2010

Under the proposed budget released by Governor David Paterson on Tuesday, BC would see $3.4 million less in state aid next year, leading to another round of budget cuts across the district it crafts a 2010-11 spending plan of its own.

The $3.4 million figure represents a roughly 12.2 percent reduction in the district’s total state aid package from the current year. State legislators will now take up the Governor’s proposal, with a final state budget is due by April 1.

“While we are still reviewing the details of the Governor’s proposal and it is early yet in the state’s budget process, it is a pretty clear signal that we have some difficult decisions ahead of us,” Bethlehem Central Superintendent Michael Tebbano said. “Every dollar not derived from state aid is often made up for either through program cuts or property taxes. Our community has been hard hit by this deep and sustained recession, so it is incumbent upon us to review a series of potential budget cuts.”

State aid accounts for about a third of the district’s revenue. Prior to the recession, state aid had generally increased every year to help district’s keep pace with the rising costs of running school system. A cut in state aid, combined with continued rising costs, can result in a significant gap between expenses and revenues.

For example, this year the district’s budget is about $87.56 million. To run the same exact program next year would require a budget of about $91 million — or about $4 million more than projected revenue, including the governor’s state aid proposal.

“The governor’s proposal, while not final, sets the stage for our work over the coming months,” Dr. Tebbano said. “We know that we will need to bridge a gap between expenses and revenues — what we need to spend and what we take in. Our challenge, and our goal, is to develop a budget that, while containing cuts, preserves the academic program to the greatest extent possible and our community can afford to support.”

District administrators have been working on potential budget scenarios over the past few months in preparation for the ongoing community budget forum series and the Board of Education’s budget workshops in March.

Last year, when state aid was roughly kept flat, the Board of Education identified more than $2 million in budget reductions to limit the spending increase in the budget, approved by voters in May, to the lowest level in more than 25 years.

Dr. Tebbano noted that last year’s reductions represent just about all of the savings and efficiencies the district could enact without jeopardizing the core of its academic program, services and operations. The reductions under consideration this year, which will be discussed at the community forum on January 26, include teaching, support, administrative and supervisory staff positions; cuts to athletics, extracurricular activities and clubs, enrichment funding and late buses and closing a pool.

Both the superintendent and Chief Business and Financial Officer Judith Kehoe said that while some use of fund balance may play a role in helping bridge the budget gap, they disagree with those who argue that this is the year to deplete a fund balance to stave off difficult decisions.”

“That simply is not prudent or responsible fiscal policy,” Mrs. Kehoe said. “When you use up all of your reserves, you hurt yourself in two ways: They are not there to help you in future years, which are also expected to be difficult, and you perpetuate structural deficits, or budget expenses for which there is no recurring revenue.”

For the second and final year, the Governor’s proposal includes some federal aid contained in the federal economic stimulus package. This aid, which passes through the state budget, was used to offset what could have been a more significant cut to school districts, according to the Governor’s budget materials. Because the cut to BC aid proposed by the Governor already reflects this second year federal aid, the $3.4 million state aid reduction will not improve based on federal stimulus education funding.

At this point, Dr. Tebbano said the district will continue to refine its own budget projections and list of potential reductions, which will be shaped ultimately by community input, state budget developments, and the Board of Education’s budget workshops in March.

The community budget forum series continues on January 26 at 7 p.m. in the Bethlehem Central Middle School Library.

 

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