Enrollment James P. Dexter District Superintendent Sole - - PowerPoint PPT Presentation

Impact of State Fiscal Policy and Shrinking Enrollment

James P. Dexter District Superintendent Sole Supervisory District Washington-Saratoga-Warren-Hamilton & Essex Counties

State-Wide Fiscal Trends

BUT THE ECONOMY IS STALLED

$15 billion deficit in 5 years Even though “education pays”, caps on state and local revenue will mean schools have fewer resources and cannot sustain current levels of investment.

Where school spending goes…

Hard to make cuts without affecting instruction or personnel

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Source: Council analysis of 2008-09 NYSED School District Fiscal Profiles Source: Council analysis of 2007-08 U.S. Census Bureau data

Salaries & wages, 54.7% Employee benefits, 20.4% Everything else, 24.9%

Where school spending goes -- by commodity

Instruction, 73.8% Operations & maintenance, 6.6% Debt Service, 6.3% Other, 5.8% Transportatio n, 5.2% Central office, 2.3%

Where school spending goes -- by purpose

Not the first tough year…

% change in school pending, tax levy, and state aid – 2003-04—2011-12

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SOURCE: Council analysis of NYSED School Aid and Property Tax Report Card data; federal Education Jobs Fund allocations

• excluded. Data for Big 5 Cities not included.

NOTE: 2010-11 Federal Education Jobs Fund allocations are not included as part of state aid. With Jobs Fund allocations, School Aid changes would be -1.7% for 2010-11, and -7.3% for 2011-12.

Estimated/projected changes in school district revenues & expenditures

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(Governor’s proposal

– known at time of budget votes)

SOURCE: Council analysis of NYSED School Aid and Property Tax Report Card data, Office of the State Comptroller local government data; and benefit cost factors reported by the NYS Division of the Budget and NYS Teachers Retirement System (previous slide).

Pension costs matched

• verall spending

increases Combined projected increase: $829 million Would cause 2.6% spending increase if all else were frozen

Pension & health cost increases ˃ overall increases

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SOURCE: Council analysis of NYSED School Aid and Property Tax Report Card data, Office of the State Comptroller local government data; and benefit cost factors reported by the NYS Division of the Budget and NYS Teachers Retirement System.

Implication: districts cut other costs (on balance) to hold down overall spending and tax increases while absorbing surging benefit cost increases

Analyzing the Gap Elimination Adjustment

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$(648) $(831) $(901) $(920) $(1,025) $(497) $(782) $(1,200) $(1,000) $(800) $(600) $(400) $(200) $-

New York City Big 4 High Need Small Cities & Suburbs High Need Rural Average Need Low Need TOTAL STATE

Proposed Gap Elimination Adjustment per Pupil

SOURCE: Council analysis of NYSED School Aid data

Analyzing the overall cut

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SOURCE: Council analysis of NYSED School Aid data

• 2.7%
• 2.4%
• 3.2%
• 3.2%
• 3.9%
• 1.4%
• 2.9%

4.9% 10.3% 7.9% 12.9% 6.9% 1.7% 5.1%

• 5%

0% 5% 10% 15%

New York City Big 4 High Need Small Cities & Suburbs High Need Rural Average Need Low Need TOTAL STATE

Total Cut as % of Total General Fund Exp. Total Cut as % of Local Tax Levy

Examples of what districts have done

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State Implications NYS expenses-growing much faster than Revenues

• State does not have the means to increase aid

School District Expenses are for Instruction In the Past, pressure would bring more State Aid Rural and City Schools are Adversely Affected by School Aid Reductions

Financial data confirms: districts are relying heavily

• n reserves…

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Without fund balance, districts would have needed to raise taxes by almost 7% more, or make equivalent cuts (4.1%) If districts use all reserves this year, they would need bigger tax increases

• r spending cuts next

year.

SOURCE: Council analysis of NYSED School Aid and Property Tax Report Card data.

• 24.8%
• 19.8%
• 21.1%
• 20.3%
• 7.5%
• 18.5%

16.7% 11.4% 8.9% 6.2% 3.1% 6.8%

• 25%
• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% 20%

Poorest 20% Next 20% Middle 20% Next 20% Wealthiest 20% Total State

Reduction in Undesignated Fund Balance Additional Tax Increase Avoided by Use of Fund Balance

Comparing the regions 2008 income and property wealth per pupil

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Ratio of region to state average (1.000 = average wealth)

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Measures of Wealth and Needs: Essex, Hamilton, Saratoga, Warren, and Washington Counties

Property Wealth per Pupil Ratio Income per Pupil Ratio Free/ Reduced Price Lunch %

• ------ 1.000= average --------

Essex 2.179 0.638 46.5% Hamilton 6.385 0.725 36.0% Saratoga 0.892 0.829 18.1% Warren 1.595 0.681 30.0% Washington 0.635 0.504 39.8% Capital Region 0.871 0.761 31.0% North Country 0.686 0.494 46.3% State 1.000 1.000 49.4%

SOURCE: Council analysis of NYSED School Aid data

Steep enrollment declines common in poorer regions

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Most upstate regions losing enrollment at more than 1% per year

0.0%

• 0.2%

0.2%

• 0.5%
• 0.3%
• 1.0%
• 1.2%
• 1.1%
• 1.4%
• 1.3%
• 1.2%
• 0.5%
• 1.5%
• 1.0%
• 0.5%

0.0% 0.5% Long Island New York City Lower Hudson Valley Mid-Hudson Valley Capital Region Mohawk Valley Central New York North Country Southern Tier Finger Lakes Western New York Total State

Average annual % change in enrollment, 2001-02 to 2010-11 Average annual enrollment change by Need/Resource Category,* 2001-02 to 2008-09 New York City -0.2% Big 4 Cities -1.1% High Need Small Cities/Suburbs -0.6% High Need Rural -1.5% Average Need -0.9% Low Need +0.2%

2001-02 Enrollment 2010-11 Enrollment Average Annual % Change Essex 5,060 4,110

• 2.1%

Hamilton 625 472

• 2.7%

Saratoga 35,437 35,313 0.0% Warren 11,371 9,987

• 1.4%

Washington 10,878 9,289

• 1.6%

Capital Region 156,669 152,997

• 0.3%

North Country 69,938 62,708

• 1.1%

State 2,859,688 2,733,796

• 0.5%

SOURCE: Council analysis of NYSED School Aid data

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Enrollment : Essex, Hamilton, Saratoga, Warren, and Washington Counties

Ten Year Trend ERS and TRS District Cost (% on Salary)

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0.36% 8.60% 11.11% 11.84% 0.83% 10.00% 15.00% 17.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 2001-2002 2006-2007 2011-2012 2012-2013

TRS ERS

Ten Year Trend Health Insurance Annual Cost – Family Matrix Vs. PPO Total Premium

7/1/2003 BOCES began offering the PPO plan 7/1/2010 Consortium Plan Consolidation 2012-2013 Projected Rate

$0.00 $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 2001-2002 2006-2007 2011-2012 2012-2013

$8,317.32 $16,365.84 $21,615.00 $23,992.66 $0.00 $14,852.52 $18,310.08 $20,324.18

Matrix Family PPO Family

Matrix has increased 160%

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Regions defined (Adapted from NYS Labor Department Labor Market Regions) Long Island: Nassau, Suffolk New York City Lower Hudson Valley: Putnam, Rockland, Westchester Mid-Hudson Valley: Dutchess, Orange, Sullivan, Ulster Capital Region: Albany, Columbia, Greene, Rensselaer, Saratoga, Schenectady, Warren, Washington Mohawk Valley: Fulton, Herkimer, Montgomery, Oneida, Schoharie Central New York: Cayuga, Cortland, Madison, Onondaga, Oswego, Tompkins North Country: Clinton, Essex, Franklin, Hamilton, Jefferson, Lewis, St. Lawrence Southern Tier: Broome, Chemung, Chenango, Delaware, Otsego, Schuyler, Steuben, Tioga Finger Lakes: Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Wayne, Wyoming, Yates Western New York: Allegany, Cattaraugus, Chautauqua, Erie, Niagara

Regions used in this presentation:

Review of Future Trends

State Implications

• New York State expenses - growing much faster

than revenues

• State does not have the means to increase aid at

the same rate

• Tax Cap limits ability to raise local revenue (0% if

budget does not pass)

• Most school district expenses are for instruction
• In the past, pressure would bring more State Aid

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State Aid-Going Forward

• Loss of “Jobs’ monies
• Education Spending: 4.1% for total increase

($250,000,000 for competitive grants) Facts about the “Tax Cap”

• Calculation of Maximum Allowable Levy
• Exemptions
• Override
• Failed Budgets

Future Trends Loss of Fund Balance In Some Cases, Academic and Fiscal Insolvency

• Communities need to begin to review their status “what

do you want for your children and school(s)”

• Look at the Potential Solutions
• Put together plan(s) B, C, D

A Few Thoughts:

• In the past, schools were bailed out with either additional

state aid, higher levies. Will that happen again??

• Fiscal Issues will not go away soon
• Fiscal Predictions based on current set of data
• How long until a deficit situation?
• How much room do you have cut?

Reorganization Tuition Students to another district (in whole or in part) Some Solutions (many are partial) Continue to cut program each year, only teach the basic requirements Increased Sharing

• What is possible, what are the cost

savings? Wait it out, see what happens Increase Levy Reduce Growth in Spending

Options for Sharing

• One Professional Shared Between two or more

districts

• Individual employed by the BOCES
• Time split between participating districts (logical

distribution .5 FTE per district)

• Costs for employee split by participating districts
• Shared Business Official works from each district’s

central office

• Expenditure eligible for BOCES aid
• Districts guide service and program

Shared Business Official Itinerant Model

Advantages

• Reduced Cost for both

districts

• Eligible for Aid
• Employee works from

Districts

• Able to attract “high

level” candidates

• Back-up if service

expands

• District does not assume

post-retirement legacy costs

Shared Business Official Itinerant Model Dis-Advantages

• Reduced FTE
• Less access at

meetings

• Some duties may

need to be spread “to

• thers”

• Districts share a “business office” at an off site

location

• All costs associated with the office tabulated, billed

to participating districts (methodology is agreed upon in advance)

• Costs are eligible for BOCES aid
• Staff are employees of the BOCES

Shared Business Office Central Service Model

Advantages

• Likely reduction of costs

(study needed to make determination)

• Eligible for BOCES Aid
• More specialization
• Ability to look at new

“business model”

• Back-up for job

functions

• District does not assume

post-retirement legacy costs

Shared Business Office Central Service Model Dis-Advantages

• Access to business
• ffice staff is more

limited

• Some duties may

need to be spread “to

• thers”
• Standardization of

software and procedures

• If Interest Exists
• Each District should indicate such
• Tim Place will work with Superintendents to

develop cost and aid estimates

• Study for CBO more intricate and time

consuming

• Upon Final Commitment
• Both districts work with the BOCES to

develop job description and qualifications

• Position(s) posted, districts involved in hiring

process

• Service starts at a mutually agreeable date

Next Steps

Questions or Thoughts???