Where Does the Budget Gap Come From? (03.04.11)

Posted by Catherine Wilson on 3/17/2011 1:00:00 PM

John Scanlan, Deputy Superintendent for Administration
As has been reported repeatedly in recent days, the District is facing a significant budget shortfall for the 2012 fiscal year. It is estimated that between revenue decreases and projected expense increases, the shortfall will be around $80 million dollars. I'd like to explain how that number was calculated.
The district's final amended budget for fiscal year 2011 was $705 million. Using that as the baseline for projections for fiscal year 2012 , we then reviewed projected revenues. As of February 8, 2011 when the Governor's State budget was released, the following revenue reductions were anticipated for 2012:
  • Reduction in State Aid: $4 million
  • Decrease in Fund Balance Reserves: $24 million
  • Net Decrease in Other Revenue: $1 million
The largest chunk of revenue reduction is the fund balance reserves. We have little cushion for emergencies because we used reserve funds last year to prevent layoffs and balance the budget.
The district is also facing obligations that will increase overall expenditures. These include:
  • Projected contractual increase in Salaries: $11 million
  • Projected increase in the cost of Employee Benefits: $26 million
  • Increases in the cost of Fixed Obligations: $9 million
    • Includes obligated costs for Charter Schools, Transportation, Special Education Tuition, Health and Non-Employee Insurance, among other things
  • Increase in Facilities costs: $2 million
  • Increase in other known expenses: $3 million
    • Examples include BOCES and Agency Clerical
To summarize:
  • $705 million minus $29 million (revenue reduction) = $676 million in projected Revenue
  • $705 million plus $51 million (expense increase) = $756 million in projected Expenses
  • $756 million minus $676 million = $80 MILLION DEFICIT
$80 million represents approximately 11% of the current amended budget.
We are hopeful that the State Legislature will restore some of the funding cuts proposed by the Governor. We have lobbied for relief from State mandates to allow greater flexibility in spending. We are leaving no stone unturned to find opportunities to trim projected cost increases so we can drive more resources to our schools, who are making difficult choices and investing strategically to support students.


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