Lindenhurst Superintendent Sends 'SOS' in Face of New Tax Cap

The new tax cap signed into law by Governor Andrew Cuomo back in June will prove to be difficult on Lindenhurst Schools this upcoming budget season.

That’s according to Superintendent Richard Nathan, who addressed the crowd of Lindenhurst parents and students, civic leaders and other residents, plus a handful of teachers and other faculty, at the high school Wednesday.

The new tax cap, he said, is something that’s causing the district to start the budget season now.

In fact, Nathan, at the start of his presentation at the special Board of Education community forum, sent out what he called an “S.O.S. (Save Our Schools)” in order to get the community to understand the impact a tax cap is going to have on the district.

“We wanted you to have this information,” Nathan told the crowd in the modestly filled auditorium.

He then outlined some significant cuts to program and staff the district is now facing as a result of the tax cap - which requires any budget increase to limit the property tax levy to less than two percent or CPI (Consumer Price Index, whichever is less).

State Aid Outlook
For starters Nathan painted a pessimistic picture of state aid for the next school year’s budget.

“For 2012-13 Governor Cuomo indicated that districts will receive an increase of four percent in state aid, but he recalculated the formula, and experts believe that it’ll be more like two percent - and we‘ll be lucky if we get that,” he explained, noting that in the past two years’ budgets saw a total loss of $6.7 million in state aid.

The Cuts and Costs
That loss caused the district to make a variety of cuts such as changing transportation guidelines to save $750,000 annually (2009-10); cutting 37 teaching positions (2010-11); and closing Bower elementary school to save $1.5 million annually (2011-12).

The upcoming 2012-13 budget could see many more cuts, such as full-day kindergarten, JROTC, Orion (gifted and talented program), Alternative Learning Center (ALC), dance, media, elementary music, fine arts and technology electives, introductory world languages and home economics.

Many of these were on the chopping block for 2011-12, but were saved. Nathan said that now they’re all back on the block.

The district’s also considering reducing high school and middle school student schedules from nine periods to eight.

“Do we want to cut these things? No, they’re important, but we might have to,” he said.

Also of concern are increased energy costs, increased transportation costs and increased special education costs.

“We’re looking at bringing back students from BOCES that could produce some savings (maybe $80,000 to $100,000),” Nathan said of the special education costs. “We’re looking at some changes, and some might take place in the middle of this year.”

Contract Negotiations
Adding to the pressure are the district’s contractual obligations to its bargaining units - five of six with which the district and BOE are currently still negotiating contracts: TAL, aides, clericals, administrative and nurses (the custodians’ contract is up in June 2012).

Under the terms of the Triborough Amendment, when a contract expires without a new contract agreed upon, the previous contract remains in place.

So the current salaries, steps and raises in the previous contract must be met along with yearly increases in retirement costs (TRS and ERS) and benefits, all while federal money from the Education Jobs Fund has been cut off.

“The Feds have said no more money even though President Obama made an effort restore some of that funding,” Nathan said. That translates to a loss of $1.6 million.

All of these contractual factors boil down to this:

• Projected Increase for Rollover Budget: $4.5 million
• Tax Cap Allowance (Two Percent Tax Cap): $1.7 million
• Budget Deficit for 2012-13: $2.8 million

“This assumes that state aid will be flat,” Nathan said, who was disappointed at the meeting's small turn-out and lack of teachers (only a handful showed). “It translates to eliminating approximately 30 to 35 instructional positions.”

Tax Cap Reality
Now under the new tax cap a district could put out to vote a budget that features a tax levy that’s higher than two percent or CPI twice, Nathan explained.

But if it fails both times - which could happen since a district would need a 60 percent supermajority to pass such a budget - then the alternative is contingency, which would now mean a zero percent tax levy increase instead of pre-tax cap contingency parameters (CPI times approved expenditures of previous year equaling a maximum allowable increase in expenditures).

It’s a risk that some wealthier districts might take next May, Nathan said.

“For some districts who don’t rely as much on state aid as we do, I’ve been told that they might go out with a higher budget,” Nathan said.

However, more likely in Lindenhurst Nathan believes the new tax cap will cause more cuts to the budget to meet the two-percent tax cap before sending it out to a vote because, looking at the voting numbers during the last 16 years he’s been in the district, the budget’s only received a supermajority twice.

“Of about 25,000 eligible and registered to vote in Lindenhurst, only 4,180 voters (2,154 yes, 2,026 no) turned out in May this year for the 2011-12 budget, which included a 6.89 percent ($86.9 million) tax levy,” he noted.

For that to pass under the new tax cap law, the current budget and associated tax levy would’ve needed 60 percent to pass, or 2,508 yes and 1,672 no.

“Let’s be honest. If we went out with that, then we probably wouldn’t get a supermajority,” he said of next May‘s vote based on the 2011-12 school budget numbers.

With what the district believes to be a dismal outlook under the new tax cap - which is in place for the next five years - Nathan and the BOE thought it was important to begin informing the public now.

And Nathan hopes that together - the BOE, administration, educators, unions and taxpayers - they could find cost-saving solutions that would allow the district to deliver instruction and manage operations without completely running through its fund balance and reserves while the tax cap is in effect.

For those who missed the November 16 presentation, a copy of the superintendent’s PowerPoint presentation, along with an explanation of the tax cap, is available on the district website. A video of the presentation will also be posted.