The Fiscal Landscape for Canton and Potsdam Central Schools entering the Budget Process

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1 The Fiscal Landscape for Canton and Potsdam Central Schools entering the Budget Process Presented to Board of Education Canton Central School District February 6,

2 Canton and Potsdam Central Schools Each serving over 1300 students with full-time professional staffs of 200, the Canton and Potsdam Central Schools are top-performing North Country schools, continually striving to improve our capacities to ensure students meet or exceed state standards and to prepare graduates to be college- and career-ready. But we won t continue to be, because Canton will not have the financial resources needed to remain fiscally and educationally solvent beyond this school year and Potsdam is not far behind. The implications are huge not only for Canton and Potsdam schools, but for the North Country writ large given the importance of the Canton-Potsdam community to the educational and economic vitality of the region.

3 The Realities Canton and Potsdam schools have lost over $21 million in state aid since the advent of Gap Elimination Adjustments, resulting in perpupil cuts that are among the highest in the state: GAP/Deficit Reduction Assessment School Year Canton Potsdam $1,189,411 $919, $1,865,571 $1,927, $2,462,276 $2,562, $2,104,325 $2,264, $1,548,828 $1,584, $1,381,788 $1,451,669 Total $10,552,199 $10,710,360 Per-Pupil Cut $7,910 $8,023 Statewide Average Per-Pupil Cut: $2,895 The impacts have been direct and significant

4 Change in Canton School Aid since (excluding Building Aids) $14,500,000 $14,000,000 $13,500,000 $13,000,000 $12,500,000 $12,000,000 $11,500,000 $11,000,000 $10,500,000 $14,101,574 $13,397, (proposed) Change in School Aid to : (-$704,215) or (-4.99%) (excluding Building Aids) Source: New York State Council of Superintendents

5 Change in Potsdam School Aid since (excluding Building Aids) $13,000,000 $12,500,000 $12,000,000 $11,500,000 $11,000,000 $10,500,000 $10,000,000 $9,500,000 $9,000,000 $12,527,869 $11,443, (proposed) Change in School Aid to :(-$1,084,857) or (-8.7%) (excluding Building Aids) Source: New York State Council of Superintendents

6 Impacts on Canton CSD Elimination of 55 faculty and staff positions 25% of workforce Elimination of 37 curricular offerings, such as: > Entire business program > Alternative Education Program > Library services: reduction from 3 librarians to 1 serving 3 schools > Fish Farm (Aquaculture and Aquascience courses) > Project Lead the Way pre-engineering program courses > Elective offerings in music, art, information and technology sciences, and family and consumer sciences > Lower and upper level Spanish and French courses Reduced extracurricular theater and music productions Reduced level of counseling and academic intervention services Elimination of selected athletics including the majority of junior varsity teams

7 Impacts on Potsdam CSD Elimination of 48 faculty and staff positions Elimination of 37 curricular offerings, including: > Entire business, agriculture and Latin programs > Electives in art, music, and family and consumer science > Drivers education > Learn to swim program > Middle School enrichment programs > After school library program > CHOICES and Wings at-risk student programs > Middle level summer school > Technology mini-grants Reduced level of counseling and Academic Intervention Services Reduced interscholastic athletics and extracurricular programs, including golf, cheerleading, and performances

8 Excelling in the Face of Adversity Despite facing these six consecutive years of monumental fiscal challenges and enduring massive staff and program cuts, our schools have continued to perform well: Business First ranks Potsdam and Canton schools #1 and #3 respectively among 33 North Country Schools for overall academic achievement. U.S. News and World Report ranks Canton and Potsdam High Schools among the best in nation for 2013, earning Gold and Silver medals respectively.

9 At a Crossroads Going forward, neither district will be able to sustain its current level of academic achievement, because we will simply not have the resources needed to do so. Succinctly stated, the Governor s budget proposals for the Canton and Potsdam school districts falls woefully short of our needs for sustaining quality educational programs for our students.

10 Type Aid State Aid Summary Canton Governor s Proposal Canton Planning Figures Potsdam Governor s Proposal Potsdam Planning Figures Base Foundation Aid 11,100,413 11,100,413 9,270,732 9,270,732 Universal Pre-K 244,845 Separate Accounting 175,250 Separate Accounting BOCES 1,057,135 1,057,135 1,351,139 1,351,139 High Cost Excess Cost 503, , , ,209 Private Excess Cost 66,088 66, ,394 75,245 Hardware and Technology 26,091 26,091 23,011 23,011 Software, library, textbooks 109, , , ,351 Transportation 1,645,980 1,645,980 1,090,595 1,090,595 Supplemental Public Excess 26,193 26, Building Aid (*adjusted ICW Fiscal Advisors) 2,176,497 *1,160,022 2,040,964 2,040,964 Total Gross Aid 16,955,634 14,312,536 14,935,645 14,680,246 Gap Elimination Adjustment 1,381,778 1,381,778 1,451,669 1,451,669 TOTAL NET AID 15,573,856 14,312,536 13,483,976 13,228,577

11 Preliminary Budget Gap Analysis REVENUES CANTON POTSDAM Estimated State Aid 14,312,536 13,228,577 Estimated Other Revenue 375, ,000 Current Tax Levy 8,432,390 11,844,369 $23,119,926 $25,595,946 EXPENDITURES CANTON POTSDAM Current budget 24,303,124 27,324,782 Salary increases 151, ,410 Increase (Decrease) in Debt Service payments 143, ,635 Estimated increase in BOCES costs 402, ,004 Estimated increase in employee benefits 687, ,375 (TRS, ERS, WC, FICA, Health Insurance) Miscellaneous projected increases 21,274 53,681 PRELIMINARY Budget $25,708,768 $28,097,617 Year-to-Year increase 1,405, ,835 PRELIMINARY budget net % increase 5.78% 2.83%

12 Projected Budget Gaps Canton Potsdam PRELIMINARY Budget $25,708,768 $28,097,617 Total Projected Revenues -23,119,926-25,595,946 Projected Budget Gaps $2,588,842 $2,501,671 This illustrates that projected revenues for fall significantly short of funding our expected minimum needs This type of gap has occurred for the past several years, forcing both Districts to dramatically: > cut programs and staff > propose maximum to-the-cap tax increases > commit significant fund balance and reserve funds to bridge these gaps. We do not have these options going forward. Here s why

13 Going Forward: The Local Property Tax Picture A 1% increase in Canton Central School s property tax generates about $84,000 in additional revenue, in Potsdam, about $118,000. To erase each of these gaps, a tax increase of 30.8% would be needed in Canton, and 21.2% in Potsdam. This obviously won t work, even if there were not a tax cap. Given a tax cap of 1.46%, Canton may raise a maximum of $122,640 in additional property taxes, and Potsdam $172,280. Let s see where that leaves us.

14 Projected Budget Gaps Canton Potsdam Projected Budget Gaps $2,588,842 $2,501,671 Less additional projected tax revenue -122, ,280 Adjusted Budget Gap #1 $2,466,202 $2,329,291 The next option is to commit reserve funds to bridge the gap. As of June 30, 2013, Canton s unreserved fund balance was $782,104; Potsdam s was $1,366,239. Let s consider these in the equation.

15 Projected Budget Gaps (cont) Canton Potsdam Adjusted Budget Gap #1 $2,466,202 $2,329,291 Apply Fund balance -782,104-1,366,239 Adjusted Budget Gap #2 $1,684,098 $963,052 As indicated above, despite the assumed use of the entire fund balances, there would still be huge deficits to address. As noted by the Comptroller, such use of fund balances as shown here places the districts at significant risk. That said, we have one remaining option at our disposal: eliminating program and staff. Let s examine the impacts.

16 Non-Mandated Programs/Services At Risk The conversation to eviscerate our schools would most likely begin with non-mandated programs and services Elimination of entire athletic and extracurricular programs PreKindergarten (elimination/reduction of 72-student program) Kindergarten (elimination or reduction from full-day to half-day) Art (elementary art and secondary electives) Music (elementary music and secondary electives) Guidance services (no elementary counselor mandated) Information and Technology Sciences (all non-mandated instruction) Languages Other Than English (French or Spanish?) Family Consumer Science (all non-mandated instruction) (Canton) Agriculture program (Canton) School pool (curricular, extracurricular, community programs) (Canton) Transportation (no busing within specified distance from school-canton)

17 Implications Going Forward If our state aid picture does not change, we will Be forced to decimate our curricular and extracurricular programs, beginning with our entire athletic programs following closely by our Kindergarten and Pre-Kindergarten programs Be facing class sizes in the 30s and 40s in all schools Experience an increasing population of at-risk students and likely much higher drop-out rates Be out of compliance in providing Special Education, Title I, Academic Intervention and other mandatory services Impact our local economy dramatically as a result of jobs lost Impact university, public and private sectors recruitment of quality people In short, we will be unable to perform our educational mission, negatively impacting not only Canton and Potsdam, but the greater North Country region