JOHNSTOWN — The Greater Johnstown School District plans to exceed the state’s tax levy limit cap for the district’s 2018-19 budget, which is negative 2.5 percent.
District Assistant Superintendent Ruthie Cook Thursday night gave the Board of Education a presentation on the proposed budget, and officials scrambled to present good news.
“We would like from you some marching orders,” Cook told the board.
She said the district next school year faces $36.7 million in expenses and $33 in revenues — a $3.7 million budget gap.
“We’re going to ask you to take this in and just give some of this consideration,” Superintendent Patricia Kilburn told the board.
She said the district is going to have to be “creative” and “conservative” in its development of the next school year budget.
“We’ve always been a fiduciarily responsible district,” said board President Kathy Dougherty.
A further discussion on the budget, including about fund balance, is set for the board’s next meeting at 6:30 p.m. March 22 at Johnstown High School.
“We’re spending more than we’re taking in,” Cook said.
She said the district’s “shrinking” fund balance is expected to come in at about $1.4 million by the end of this school year.
The state’s annual tax cap varies for individual government entities and school districts, although it is often referred to as a 2 percent cap. Entities try to stay within that limit. But Cook said the Johnstown school district’s current tax cap calculation for the next school budget came in at negative 2.5 percent. To even meet the cap levy of $8 million, the district would be required to decrease its tax levy by $207,000.
Released at Thursday’s board’s meeting at JHS was a flier stating the tax cap situation and “why Greater Johnstown must exceed it.”
“A decrease in our tax levy would be detrimental to our school district, and would prevent us from providing quality education to our students,” the flier indicated.
Cook said the reason the state has lowered Johnstown’s “complex formula” cap so much for next year is related to the district’s ongoing $39.6 million capital project. The district is receiving about 95 percent aid from the state for the project. Cook said the issue relates to reimbursement, which isn’t in the state’s calculation for Johnstown’s tax cap, which caused the negative cap.
The flier explained the situation this way:
“This year, we will start receiving state aid that must be used to make payments on our capital project. This aid is going to start flowing in before the capital project payments start flowing out later in the year. While we need to use this reimbursement aid for capital project payments in the near future, the tax cap formula does not take this into consideration. The formula simply sees that we have increased revenue and assumes we can use it to cover any expanses.”
Because the district plans to exceed its negative 2.5 percent tax cap, Cook said the district now needs a 60 percent “super majority” positive vote to pass its 2018-19 budget. District voters take to the polls from 11 a.m. to 8 p.m. May 15 at JHS.
District voters on May 16, 2017, approved a $33.9 million 2017-18 budget, which contained a 3.5 percent tax levy increase for a total levy of $8.3 million. The levy was below the state’s 6.2 percent tax cap for this year’s budget.
Cook said Thursday night that a “big chunk” of the budget goes to personnel costs and some to BOCES. She said health insurance is a “large cost.”
Kilburn said the district must now look at areas it can cut costs, while maintaining basic services.
“You just can’t stop offering stuff,” the superintendent said.
She said the district can set parameters for BOCES, review collective bargaining, and save energy costs where possible.
“We’re going to look where we can,” Kilburn said.
Cook mentioned several widespread areas the district can review expenses for: cost of operations, staffing, athletics, extracurricular, course offerings and services. She said the district has to look at expenses.
“We want to look sensibly,” Kilburn said.
She said reductions are needed without cutting too much out of fund balance.
“None of these decisions will be easy,” Kilburn said.
Board member Ronald Beck wanted to know how much the district has spent on field trips the last couple years, although Cook said there might not be much savings in that category.
Cook said the district does have about $5 million in reserves, which are dedicated to expenses “we know we’ll have.” Those reserves might be earmarked for such items as bus purchases.”
“We can’t just spend them,” Cook said of reserves.
Cook said the district now also has a budget committee made up of various stakeholders in the community. She said the group has met twice.
Michael Anich covers Johnstown and Fulton County news. He can be reached at [email protected]