The Bedford Central School District faces a major shortfall for its 2013-14 budget.
Superintendent Jere Hochman told Patch that the gap is more than $5.2 million. The scenario was presented at a Wednesday night school board meeting by Assisstant Superintendent for Business Mark Betz.
The situation that Betz described is not a proposed budget, but instead it is an outline of what Bedford Central's new costs could be if added to its existing ones. The presentation did not present any cost cutting figures, which Betz indicated, would be needed. A formal budget proposal, which itself will be a preliminary version, will not be presented until the school board's March 6 meeting.
The biggest drivers of the escalated cost projections, Betz said, include salaries, at $2 million, and pension contributions, at $2,870,000. In the case of pension funds, Betz explained in the presentation that the district is facing a contribution jump of 35 percent for the teacher retirement system (TRS) and a 13 percent hike for the employee retirement system (ERS)
School districts and local governments are forced by the state to make pension contributions, an obligation that is detested by many officials in the region because of its costs. Betz explained that the contribution rates are tied to the performance of investment markets, meaning that hikes occur to compensate for poor performance and vice versa.
Other projected costs, Betz said, include health benefits, at $400,000, tranportation at $500,000 because of a contractual payment increase with Towne Bus Corp – it took over busing in the district last year – and a $1 million decrease for capital projects. The total rising costs are estimated to be $5,120,000, Betz explained in the video.
The assistant superintendent also said in the recorded presentation that the intent is to stay under the tax cap, which limits tax levy increases to the lesser of two percent or the rate of inflation. However, Bedford Central's estimated cap could come in at a 3.25-percent levy hike because of an exemption that allows for it go pay for pension increases above a certain rate; the law for the limit contains several exemptions, including changes to the value of the local tax base.
If there are no cost cuts, Betz's full budget estimate, is a rollover budget scenario of $127,818,040. The vast majority of that ($111,476,225) would be funded with a possible tax cap of 3.25 percent, although the budget could be placed under it. Betz's figures included $9,100,000 for non-property tax revenue, such as state aid, and assumes that $2 million in surplus could be used. The result, it was explained in the video, is a net shortfall of $5,241,815.
Not surprisingly, board members were dissappointed with the fiscal forecast.
School board President Susan Wollin described the situation as “grim.”
“It feels like déjà vu,” board member Andrew Bracco said, referring to recent years in which high costs have plagued the district in its budgets.
To watch a video of the entire meeting click here.