State’s fiscal uncertainty clouds BKW 2020-21 budget development process

Faced with a great deal of uncertainty over the fiscal impact the Coronavirus pandemic is placing on New York state, the BKW Central School District continues the process of preparing a budget for the 2020-21 school year.

Gov. Andrew Cuomo says the state now faces a $10-$15 billion deficit due to the virus’ impact and other economic factors, and as such, school districts will receive less state aid than was originally projected in his executive budget released in January. He also told school leaders that if state revenues are not meeting projections at quarterly benchmarks during the new fiscal year, additional state aid cuts may be coming as the school year progresses.

“We have to address this revenue loss so we’re going to adjust the budget through the new fiscal year to reflect our actual revenue,” Cuomo said. “This means on day 1 we intended to give you $100 but we don’t have $100 so we are going to give you $95. But I can only give you $95 if I get $95. And I’ll let you know quarterly how much money I’m getting and how much I can give you so you can plan accordingly.”

That first benchmark will be April 30 so school districts are being advised to hold off on finalizing their budgets for next school year until May. The BKW Board of Education had originally planned on adopting a 2020-21 proposed budget on March 30. It is also still unclear on what date districts will be expected to put budgets up for a public vote. The original May 19 state voting date has been pushed back until sometime in June due to COVID-19.

So where are we at now in the budget process?

BKW has been involved in the budget development process since January and has made several public presentations to the Board of Education thus far. The district is preparing a budget with two major goals in mind:

  • Providing an educational program that the community has come to expect, and that students deserve
  • Recognizing the current economic situation for the community and limiting the tax impact

The latest BKW budget update was presented to the Board of Education on April 21. School districts were told to expect a “flat” state aid increase (same aid as this school year) in the 2020-21 approved state budget but BKW schools actually received about $320,000 less state aid than in 2019-20.

To make up for that loss, the district has been considering a variety of cost saving measures for 2020-21 totaling, at this time, $321,844 in reductions. Those reductions under discussion include:

  • Bulldog club/STEAM camp (includes transportation)
  • 1 FTE- Secondary English
  • Pre-K TA’s/Aide
  • School Clubs
  • Transportation Equipment
  • Administration
  • Social Security/TRS/ERS

“We never like to make cuts, but based on the state’s grim fiscal outlook and the governor’s call for ‘look back’ periods to possibly cut state aid to schools even further, we have to make hard decisions now, not later,” said BKW Superintendent Dr. Timothy Mundell. “We have to be prepared to absorb those cuts in revenue while preserving our educational program.”

Meanwhile, all 50 governors have asked Congress for a targeted stimulus bill that would give states a total of $500 billion to share to offset COVID-19 costs, thus generating more aid for schools next year and going forward. There have been discussions in Washington, D.C. but no such stimulus bill has surfaced so far.

If the state budget fails to reach revenue projections at the “look back” periods due to the current economic situation and no federal assistance is forthcoming to help states, the governor has forecast further state aid cuts in 2020-21 of up to 20 percent.

“So our school budget planning has to take this into account,” Dr. Mundell said. “We will hope for the best but prepare for the worst.”

BKW’s latest draft budget totals $23,683,267 which is an overall decrease from the 2019-20 district budget of $199,368 or 0.83 percent. Under this proposal, the district tax levy would decrease next school year by about 1 percent.

The Board of Education will meet again when it has new budget information following the first “look back” period and release of financial revenue updates from the governor’s office.