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Initial budget projections for 2019-20 call for another year below the tax cap

on March 1, 2019

Earlier this week, Superintendent of Schools Dr. David Leach pulled back the curtain on the makings of a budget for 2019-20 that enhances student support systems while staying within the tax cap threshold.

During the Feb. 25 Warwick Valley Board of Education work session, Dr. Leach presented on a preliminary budget that calls for a 2.69 percent tax levy increase, which is below the district’s tax levy limit. (Although this is commonly referred to as a “2 percent” cap, the law requires each district to use a multi-part formula to calculate its limit; for Warwick Valley next year, the limit will be 2.85 percent.)

This would make it the third year in four years that the district has stayed below its tax cap.

Developing the budget

The district’s revenue projections for next year’s budget began in February, shortly after New York Governor Andrew Cuomo presented the state budget proposal for next year.

The state’s budget shows Warwick Valley receiving a total state aid allocation of $26,548,743 next year, which represents an increase of $206,866 or 0.8 percent over this year. Most of that increase would come in the form of expense-driven aids, which are reimbursements for money the district already spent on BOCES services, tuition for special education students who attend schools outside of Warwick Valley, transportation and building projects. The governor proposes to increase Warwick’s foundation aid to pay for everyday school operations by only $127,405 – also 0.8 percent.

Filling the gap

Because less than one percent bump in aid for everyday school operations will not cover the increased costs of providing an education in Warwick Valley, the district faced an initial budget gap of nearly $600,000. However, the district anticipates being able to close this gap through a number of reductions such as decreases in costs related to retirement benefits, health insurance and transportation.

Reducing the cap

The low tax cap reflects the district and board of education’s continuing efforts to keep its school tax levy as low as possible while delivering a quality education program. Over the past ten years, the tax cap average has been 2.36 percent. Over the past five years, the tax cap average has been a mere 1.58 percent.

Utilizing reserves

Reserve utilization is an important tool in the funding of Warwick Valley’s budget. In his presentation, Dr. Leach also outlined steps the district continues to take to operate efficiently and maintain a quality academic program for the students while minimizing the impact on district taxpayers. These efforts include strategic use of the district’s Employees Retirement System (ERS), Employees Benefit Accrued Liability (EBALR) Reserves, Workers Compensation Reserve and Debt Service Reserve.

Allocating revenue

Non-tax district revenues, such as tuition paid for high school students who reside in the Greenwood Lake Central School District as well as the rental of the Kings and Pine Island Elementary Schools, also helps relieve the burden to local taxpayers. In all, non-tax revenues will account for $3.7 million of the district’s annual school budget for 2019-20.

Dr. Leach went on to say that the district also anticipates that $1.4 million from its appropriated fund balance – monies left over from the previous fiscal year – will be applied to the 2019-20 budget, further reducing the amount of money that will need to be raised by taxes.

Keeping the community informed

Budget development at Warwick will continue until the district adopts its budget on April 25. Dr. Leach will present additional information on the budget during the board’s April 8 work session meeting. Regular budget updates will continue to be posted to the district’s website for those who are unable to attend board meetings.

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