Board Adoption of Proposed 2012-13 Budget

HALF HOLLOW HILLS SCHOOL DISTRICT of Huntington and Babylon

Board of Education Meeting April 19, 2012 Adoption of the 2012‐13 Proposed Budget

The 2012‐13 Budget Journey Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Property Tax Levy “Cap”

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

• Governor Cuomo imposed a formula for districts to use in an effort to “cap” the growth of property taxes • The “cap” is not a cap; it’s a voter threshold • Formula is flawed since the result of it will be further separating the “haves” and “have‐nots” amongst Long Island school districts • The Governor’s “2% cap” isn’t 2%!

• A “cap” on the tax levy does not mean a cap on an individual homeowner’s property taxes – these are two very different concepts!

Prioritizing budget reductions

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Presenting the proposed 2012‐13 budget

Property Tax Levy “Cap”

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

• HHH Board of Education made a decision to present a 2012‐13 budget which requires a “simple majority” • The District’s calculated Property Tax Levy “Cap” as a result is 2.33% Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

 Put differently: the 2011‐12 total property tax levy of $178 million can increase by 2.33% for the 2012‐13 school year

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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The 2012‐13 Budget Journey Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Expenses

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

• Tonight marks the completion of the budget development process which began in November 2011 to calculate the cost of providing the same level of programs and support services for 2012‐13 as we do in 2011‐12 Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

 Person‐by‐person  Budget code‐by‐budget code

• Approximately 80% of budget represents salary and contractually required benefits:  41% for New York State certified staff (teachers/administrators)  14% for Civil Service staff (clerical, custodians, etc)  25% for employee benefits including healthcare, Social Security, Workers’ Compensation, and pension April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Expenses

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

• Remaining 20% of budget represents equipment, textbooks, supplies, BOCES, transfers to other funds (capital, debt service, special aid) and borrowing costs for cash flow • Providing the same level of programs and support services next year (2012‐13) as we have this year (2011‐12) would cost us approximately 7% more (over $15 million) than it does today Prioritizing budget reductions

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Presenting the proposed 2012‐13 budget

The 2012‐13 Budget Journey Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Revenues • Total expenses must equal total revenue • Revenue comes from three sources:  Property taxes  State aid  “Other”, including use of reserved and unreserved fund balance

State Aid 11.34%

April 19, 2012 Board Meeting – Adoption of Proposed Budget

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

"Other" 6.51%

Property Taxes 82.15%

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Revenues • Property Taxes

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

 Total property tax levy is now a fixed amount based on the Property Tax Levy formula  For HHH, the 2012‐13 total property tax levy is 2.33% more than prior year $178,147,658

$182,306,191

2011‐12 total property tax levy

2012‐13 estimated total property tax levy

Increase of 2.33% or $4,158,533 April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Revenues • State Aid

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

 New York State passed an on‐time budget  HHH State Aid rose by approximately $900,000 from State Aid budgeted in 2011‐12  Aid in many individual categories changed slightly  To interpret State Aid, must also understand:  Deduct for Local Share of Education for Certain Students  Universal Pre‐Kindergarten Aid is NOT general fund money  Gap Elimination Adjustment (GEA)

STATE BUDGET April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Revenues • State Aid

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

18,000,000 2011‐12

16,000,000

4,790,769

4,554,254

3,259,002

2,882,289

848,574

851,493

946,635

920,989

2,000,000

1,220,310

4,000,000

1,089,746

6,000,000

1,355,779

8,000,000

Expense Driven Aids

1,355,779

10,000,000

17,695,337

12,000,000

17,887,040

2012‐13

14,000,000

‐ Foundation

High Tax

BOCES

Special Ed

April 19, 2012 Board Meeting – Adoption of Proposed Budget

Categorical

Transportation

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Building

Revenues • Total “other” revenue expected to increase as a direct result of:

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

 PILOTs  Incremental use of appropriated unreserved fund balance  Incremental use of reserved fund balance 6,000,000

2011‐12

5,000,000

2012‐13

4,000,000 3,000,000 2,000,000 1,000,000 ‐ PILOTs

Use of Reserves

Appropriated Fund Balance

April 19, 2012 Board Meeting – Adoption of Proposed Budget

"All Other"

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• Interest earnings • Adult Ed • Medicare Part D reimbursement • Foster tuition from other districts • Use of facility charges • Health Services from other districts

The 2012‐13 Budget Journey Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Fiscal and Educational Balance • Property Tax Levy “Cap” mandate has shifted the District’s attention from building a budget focused on programs/services first to one which puts expenses and revenues first.

April 19, 2012 Board Meeting – Adoption of Proposed Budget

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

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Fiscal and Educational Balance • 2012‐13 budget must maintain: • • • • • • • • • • • •

Universal Pre‐K Full‐Day Kindergarten Elementary Class Size Middle School Teaming 27 Advanced Placement Courses 9‐Period MS / HS School Day 6th Grade Foreign Language Special Education / ESL AHAP / Enrichment Research Program Elementary Summer School Elementary Academic Intervention Services in reading and math

April 19, 2012 Board Meeting – Adoption of Proposed Budget

• • • • • • • • • • • •

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

Discovery Center / Planetarium Universal Busing Field Trips 131 Athletic Teams Extracurricular Clubs K‐12 Band, Orchestra & Chorus in Grades 4‐12 MS / HS Musicals Hills on Stage LIHSPA for Seniors Participation in SCMEA, NYSSMA and LISFA Technology replacements Drivers’ Education 16

The 2012‐13 Budget Journey Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Prioritizing Budget Reductions

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

• Address budget reductions resulting from enrollment declines first • Equitably distribute reductions across all buildings/areas • Maintain as much of the blending of “AAA” (Academics, Arts and Athletics) as possible • Over $9 million in reductions were required to be made across all areas • “Reductions Made to Arrive at the 2012‐13 Adopted Budget” handout describes each of these reductions Prioritizing budget reductions

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Presenting the proposed 2012‐13 budget

The 2012‐13 Budget Journey Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Proposed 2012‐13 Budget • $221,918,299

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

 2.75% increase from 2011‐12 budget  Lowest budget‐to‐budget increase in 15 years  Stays within the Property Tax Levy “Cap”

• Public presentations of the proposed budget will continue between now and the budget vote

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Proposed 2012‐13 Budget General Support • Expenses supportive of the entire district management effort • Includes legal, BOE, elections, auditors, facilities, BOCES admin charges, and insurance • Includes expenses within the Superintendent, Human Resources, and Business Offices Instruction • K‐12 instructional programs of regular and special ed students • Principals, assistant principals, teachers, guidance counselors, psychologists, attendance, librarians, health services, etc • Also included is summer school, the interscholastic sports program, co‐ curricular activities (clubs) as well as textbooks

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

Transportation • All costs for transporting pupils to and from public, private and parochial schools Undistributed • Employee benefits (including retirement, Medicare, Social Security, Workers' Compensation, unemployment insurance, health insurance, life insurance, etc.)

• Debt service (principal and interest payments on outstanding bonds and tax anticipation notes) • Local share for the cost of offering a summer school special education program Community Services • Costs related to community use of District pool

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Proposed 2012‐13 Budget

Property Tax Levy “Cap”

Expenses

Balancing fiscal responsibility and excellence in education

Revenues

Prioritizing budget reductions

Presenting the proposed 2012‐13 budget

General Support 19,978,960 9% Community Service 77,751 0%

Undistributed 65,732,992 30%

Instruction 122,013,160 55%

Transportation 14,115,436 6% April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Budget Failure • Scenarios:  Budget is defeated after two presentations to the voters OR  After one defeat where the Board decides not to resubmit a budget to voters

• Requirements: 1. District must adopt a budget with a tax levy less than or equal to the prior year (i.e. 0% growth) 2. Maintain the administrative cap 3. Eliminate all non‐contingent expenses

• Statewide uniform revote date: third Tuesday in June

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Budget Failure 1. District must adopt a budget with a tax levy less than or equal to the prior year  Overall contingent budget calculation stricken from law  

No longer is the contingent budget an increase of the prior year’s budget which represents the lesser of 120% of CPI or 4% No longer does the contingent budget calculation include provisions for exceptions and allowances

 0% growth in tax levy  For HHH, a contingent budget means an additional over $4 million in cuts $182,306,191

$178,147,658

2012‐13 Proposed Tax Levy

2011‐12 Tax Levy

April 19, 2012 Board Meeting – Adoption of Proposed Budget

$4,158,533 Additional Budget Cuts Required under a Contingent Budget

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Budget Failure • Scenarios:  Budget is defeated after two presentations to the voters OR  After one defeat where the District decides not to resubmit a budget to voters

• Requirements: 1. District must adopt a budget with a tax levy less than or equal to the prior year (i.e. 0% growth) 2. Maintain the administrative cap 3. Eliminate all non‐contingent expenses

• Statewide uniform revote date: third Tuesday in June

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Budget Failure 2. Maintain the administrative cap  

Stay at or below the same proportion of “Admin” to “Program” as existed in prior year Districts are required to report their budget in three parts…

PROGRAM

ADMINISTRATIVE

CAPITAL

78.3% of budget

8.9% of budget

12.8% of budget

• Special Ed and Regular Ed Teacher salaries & benefits • Instructional Technology • Clubs & Sports • Student busing

• The “people and stuff” working to put all the pieces together • Board of Education • Auditors & Attorney fees • Property & Liability insurances • Administrators & Support Staff districtwide • Curriculum Development • BOCES admin charges

April 19, 2012 Board Meeting – Adoption of Proposed Budget

• Custodians, Maintenance and Grounds salaries & benefits • Debt Service • Transfer to Capital

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Budget Failure • Scenarios:  Budget is defeated after two presentations to the voters OR  After one defeat where the District decides not to resubmit a budget to voters

• Requirements: 1. District must adopt a budget with a tax levy less than or equal to the prior year (i.e. 0% growth) 2. Maintain the administrative cap 3. Eliminate all non‐contingent expenses

• Statewide uniform revote date: third Tuesday in June

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Budget Failure 3. Eliminate all non‐contingent expenses  Equipment  Student supplies  Community use of buildings and grounds  Board can elect one of the following two options 1. Eliminate ALL community use of buildings and grounds for the entire year 2. Allow community use of buildings and grounds but charge every single group a fee for such use so that all direct and indirect expenses are 100% covered: » Field use: painting fields, irrigation system fees, water fees, grounds staff salaries/benefits, etc. » Building use: heat/AC, toilet paper, paper towels, maintenance of septic systems, custodial staff salaries/benefits, etc.

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Budget Failure • What would a contingent budget look like?

Reduction Item

Approximate $

Eliminate all equipment

$ 1,000,000

Eliminate all community use of buildings and grounds Eliminate Planetarium and Discovery Science Center Eliminate Elementary Enrichment program and AHAP Eliminate regular education elementary summer school Eliminate 7th and 8th grade interscholastic teams

$ 100,000 $ 200,000 $ 400,000 $ 200,000

Reduction Item Reduce to half‐day kindergarten Eliminate all extracurricular activity clubs Eliminate remainder of intramurals Elminate 4th and 5th grade orchestra/band Eliminate 8th grade teaming

Approximate $ $ 1,200,000 $ 600,000 $ 75,000 $ 200,000 $ 125,000

$ 100,000

$4,158,533 Additional Budget Cuts Required under a Contingent Budget

April 19, 2012 Board Meeting – Adoption of Proposed Budget

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Important Dates • TONIGHT: 2012‐13 Proposed Budget adopted

by Board of Education • April 20th through May 11th: Various public presentations regarding the budget  PTA Budget Committee – April 20th  PTA Council – April 25th  Remainder of dates/locations to be posted on the website

• Tuesday, May 15th: Budget Vote and Board of Education elections April 19, 2012 Board Meeting – Adoption of Proposed Budget

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