New year, new budget challenges

Happy 2010 to everyone. In terms of the school district, January is the time when activity on the new budget heats up. Work began before the holidays, with principals and other department heads currently putting together their estimates and wish lists. Last year’s tough budget cuts will be followed by more hard choices again this year. The state-imposed cap on our budget increase is good for property taxes, but problematic for the district, as we are once again a situation where our “non-negotiable” expenses are going up more than the budget cap allows us to increase revenue. (I put “non-negotiable” in quotes because someone will surely point out that our contracts with teachers, administrators and secretaries are negotiated. This is true, but right now we’re beginning the third year of 3-year contracts for teachers and secretaries. We are obligated to pay according to the terms of those contracts.) So, when combined expenses for salaries, benefits, out-of-district tuitions and transportation go up more than 4% (the state’s cap on the tax levy increase), we are forced to make cuts elsewhere in order to balance the budget. Everything else gets squeezed.

In addition to the cuts we already know we’re going to have to make – currently estimated at about $2.5 million -- the state has thrown us another curve. Governor Corzine recently introduced legislation that would require districts to take any surplus funds – that would have been used for the 10-11 budget – and put them into this year’s current budget. How can they force us to do this? Because they’re going to withhold the state funding they were supposed to give us this year, in an amount equal to our surplus. If I can try to explain: every year the district has some sort of surplus. Last year’s (08-09) was about $1.3 million. We have surplus because there are so many things that must be estimated at the beginning of a year, but then the actual expenses can differ. For example, we have no way of knowing exactly how many staff will retire in the coming year, and exactly what will be the salaries of the new replacement hires. We make an estimate, but then the reality usually results in $$ savings – and that becomes a surplus. In addition, if we are efficient with our spending, or find ways to save money throughout the year, that also gives us a surplus. We are already required to take the surplus from last year and apply it to the budget for next year, as tax relief. What Governor Corzine’s plan will do is take that money away from next year – thus impacting next year’s budget even more and forcing us to make even more cuts.

The really unfair part of this is that we are being penalized for being efficient and saving money. The state is going to take way the money (our taxes) that they’ve already promised us – and which we’ve already budgeted -- for this year. In some other district, where they were not as efficient, spent all their money and thus don’t have a surplus, the state will still give them their funding. How is that fair? It’s not. Dr. Fishbein has already been in touch with legislators and Governor-elect Christie’s transition team to try and explain how this isn’t right. In the meantime, it means we’ll be looking for even more cuts for 10-11. It is going to be difficult. These cuts will be painful and they will be felt.

I had hoped that since the community approved the Referendum last month, there might be a way to keep our budget increase below the 4% cap. But that’s looking less and less likely. I don’t yet know where the proposed cuts will be, but we’ll be discussing them at upcoming BOE public meetings. This year the administration has proposed a schedule for budget discussions – focusing on a section of the budget at a time. The complete budget calendar is on the district website (click here), but some of the key dates are:
1/23 Discussion of Revenue
2/1 Discussion of Instruction & Administration costs
2/22 Discussion of Special Ed and Tuition costs
3/1 Discussion of Transportation and Capital and Maintenance costs
3/8 Discussion of New Initiatives
3/16 Governor's Budget Address
3/18 Announcement of state aid $$ to Ridgewood*

(*Notice that the governor has delayed his budget address even further, so our administration will be creating, and the BOE will be discussing -- a budget based on assumptions for state aid.)

Let’s just remember we’re all in this together and try to keep a calm and reasoned approach. I encourage everyone to please pay attention and get involved with feedback, questions, etc.

Happy new year!