WPCNR Quill & Eyeshade. Commentary By John F. Bailey. February 9, 2006: The Annual Budget Committee which works with the School District on developing the 2005-2006 budget met for the first time Wednesday evening and got sobering news that the school budget is escalating on a pace to reach $200 Million in two years based on current trends.
The Annual Budget Committee Being Welcomed by Superintendent of Schools Timothy Connors (right) Wednesday evening at 5 Homeside Lane. The Committee met with disturbingnews of a deteriorating school budget conditions. Photo, WPCNR News.
Donna McLaughlin, President of the White Plains Board of Education opened the meeting saying this was going to be a difficult year.
Let me assure you, it’s going to be a difficult 15 years, Mr. and Mrs. and Ms. White Plains.
As the evening progressed a palpable creeping dread began to descend on the room as spectres of a financial apocalypse were reported by Superintendent of Schools Timothy Connors and Assistant Superintendent for Business, Terrance Schruers.
Some members of the Annual Budget Committee caviled at the salary portion of the budget, ( salaries comprise over a third, $4.4 Million) of the 8% year to year budget increase presented for 2006-2007 of $12.7 Million). They complained the school district policy of keeping elementary classes to about 20 youngsters should be reexamined by expanding class size, and trimming teachers. Mr. Connors noted one of the goals the district has always been committed to was to keep classes no more than 20, because that was, in educational practices, the best learning environment (small classes).
Third Certiorari Borrowing in 12 months Announced.
The ABC Committee was dismayed to learn from Assistant Superintendent of Business, Terrance Schruers the district plans authorization of another $8 Million 5 year bond. The Board of Education will authorize it in June as expectation of paying additional certioraris for the 2006-07 year now being budgeted. This third certiorari bond issue if authorized and activated, would bring the amount borrowed for certiorari repayments to $24 million in 12 months.
Timothy Connors, the Superintendent of Schools assured the audience that White Plains was not the only district the certiorari ghost was haunting. Connors said it was happening upstate with more devastating impact than in White Plains. Terrance Schruers, the financial mastermind of the district, explained the problem as being one of having the same equalization rate for commerical properties ad residential. He said there is an effort in Albany to correct that. However, as first reported in WPCNR weeks ago, Assemblyman Adam Bradley reported that his bill to do this has been sent back and is currently being rethought because the Senate would not pass it.
Assessments a Mystery.
Schruers said the assessment figure on which the school tax levy is resourced, is not due from the city until March 1 by law and the Assessor’s office is still working on the total assessment roll.
Schruers said the Assessor has not given the district even an estimate of the total assessment roll as it looks today.
Terrance Schruers, Assistant Superintendent for Business addressing the ABC Committee. Photo, WPCNR News.
The assessment roll could be up, the business office reported Thursday because, more assessments,( it has been told to the district by the Assessor) have been added to the rolls. How much has been added to the roll is key, since millions have been taken off the roll. It could be down considering the drop in assessments due to the certiorari refunds in 2005-2006.
The Secret Tax Rate
Schruers said the tax rate the district will have to charge cannot be determined. If the assessments are down from the 2005-2006 $304 Million, a tax rate increase will be in order. WPCNR has learned from the business office some “PILOTS” have ended and gone back on the tax rolls so the district is hopeful the tax roll will hold. Cross your fingers.
Union contracts expire June 2007.
The Committee also learned Wednesday night that for 2007-2008, the school budget will be impacted by having to pay new contracts with the White Plains Teachers Union, the Civil Service Employees Association and the Administrators and Supervisors Association. All three contracts expire at the end of 2006-07, and will be renegotiated for 2007-2008.
In addition, Schruers noted that the Transportation contract also expires the end of 2007, which he also expects to increase dramatically.
The 4% Target. Negotiations With Unions Open next year.
The three school district unions will strive to match the 4% hikes the City of White Plains granted the police, the fire, and the Civil Service Employees during election year 2005 in their most recent contract settlements.
In the last round of contract negotiations with the teachers, civil service and administrators, the school district granted 3.5% raises across all “steps.” The teachers union gave back some health benefits, but they cannot be expected to be as forgiving again.
However a 4% increase, as Mr. Schruers pointed out Wednesday evening, actually works out to about a 5.5% increase in salaries due to the automatic step raises built into the contracts. For example this year’s 3.5% increase translates, according to the preliminary budget, translates to a 4.92% year-to-year increase due to the 3.5% impact on the step levels of the contracts. WPCNR points out Mr. Schruers did not talk at all about the possible teacher, CSEA and Administrators contract demand possibilities, and only referred to the 2006-2007 salary impacts.
Adding it Up.
But let us look into the very clear crystal ball and use the much maligned algorithmic formulas.
Should the District give all the unions a 4% raise next year, this will increase total salaries 5.62% in the district in 2007-2008. The Preliminary Budget Salary figure for 2006-07 of $93,601,445, (the budget now being hammered out) will rise 5.62%. This will mean salaries alone in 2007-08 will close in on $100 Million ($98,601,445).
The certioraris of 2006-2007 waiting in the wings, (if the district draws down the expected $8 Million bond will including the payments on certiorari bonds already borrowed for this year), will raise the 2007-2008 debt service to $7,874,63 (up 26%)
Take into account the additional $1.5 million in debt servce that the School Capital Project plan will add in 2007-2008.
Assume that Transportation will go up at this year’s rate (7%) translating into a $537,100 increase.
Add to this the Fringe Benefit increase at this year’s rate and that adds another $4,110,000 in 2007-2008, and if Utilities move forward at this year’s rate (31%) you have a total rough budget increase in 2007-2008 of $21 Million.
Add that figure to the 2006-2007 budget of $167.4 Million and you come up with a 2007-2008 school budget of $188 Million
Three Years From Now: $200,000,000
If the district holds at the 8% increase in 2008-2009, and WPCNR is being very optimistic here by assuming bare bones budgets the next two years, the budget for 2008-2009 will be roughly $202 Million dollars. It may be more likely to hit $210 Million in two years because of the capital project bond ( the cap project bond adds $1.5 Million in additional debt service in 2008-2009) steps in salaries, possible more certioraris, utility increases, transportation increases and more.
Kvetching was made about transportation costs, special education and tuition costs escalation but those are minor increases compared to the big four of Salaries, Fringe Benefits, Certioraris and Utilities. Minor. I remember when Mr. Connors suggested creating White Plains own Special Education school for approximately $5 Million three years ago, on the reasoning it could be a revenue center for the district as well as a money saver, rather than paying for outside services like BOCES and private schools to handle Special Education students. The ABC rejected that plan. It looks like Mr. Connors was prescient. If White Plains had that program today, we would have other revenue coming in. We do not.
The unknown and really scary factor in the mix is whether assessment erosion will stop this year and begin to go up. If it does not, that rough figure of $210 Million in 2008-2009 using the simple 8% algorithum is going to be higher. The tax levy is likely to hit double digits consistently. That is what the trends reinforced and introduced Wednesday evening indicate to this reporter.
How the 2008-2009 School Budget Reaches $200 Million.
(Projection by WPCNR which is solely responsible for its content:)
2007-2008 Budget
Salary Increases (5.62%): $5,260,401
Certiorari Debt Service: $7,874,634
Capital Project Bond: $1,526,500
Transportation (7% ): $537,100
Fringe Benefits: (12%) $4,110,000
Utilities: (31% increase) $1,257,114
Total Projected Increase over 2006-07 Budget: $20,565,749
Layer onto 2006-07 Budget: $167,417,488
Projected 2007-2008 Budget $187,983,237
Assumed present rate of 8% increase: $15,038,659
Projected 2008-2009 School Budget $203,021,896.
The evening ended with comments from all the ABC members in the room and interested guests. Perhaps the best comment was summed up by Bill Pollak saying we are all committed to the best education for all our children. The audience was clearly somber and thoughtful as they trudged out into cold reality.
