MASSENA - The chairman of the Massena Central School Districts Finance Committee painted a bleak financial picture Thursday night, saying that if state aid remained at a projected 2 percent annual increase and if the district maintained its current programs, local property taxes would need to increase 101 percent over the next five years to bridge the budget gaps.
The only way to get around that, Michael J. LeBire told board of education members, is to cut academic and extracurricular programs or seek a super majority to approve a tax increase above the districts tax levy limit.
Neither option is acceptable, Mr. Lebire said.
The districts Finance Committee met prior to Thursday nights school board meeting, and the discussions centered around projections that show, if current levels were maintained, the districts reserve fund would run out before the 2015-16 school year and taxes could rise dramatically for district residents.
Mr. LeBire said the committee estimated a 4.5 percent annual increase in salaries, an 8.5 percent increase in benefit expenses and a 2 percent increase in other costs.
That would push salaries from $18.2 million in 2012-13 to a projected $19 million in 2013-14 and, by 2017-18, a projected $22.7 million.
Benefits would also rise, from $13.6 million in 2012-13 to a projected $14.8 in 2013-14 and a projected $20.4 million by 2017-18.
Other expenses, which sit at $14.2 million in 2012-13, would rise to a projected $14.5 million in 2013-14, up to $15.7 million by 2017-18.
Total expenses, Mr. LeBire said, are currently $46 million, but would jump to $58.8 million by 2017-18.
Revenue will be hard-pressed to keep up with that pace, according to the committee chairman.
In future years, the difference between projected expenses versus projected revenues is significant and equates to approximately a $1.5 million shortfall - a shortfall that continues year after year on top of the $4 million shortfall that currently exists, Mr. LeBire said.
For 2012-13, the district had $26.4 million in state aid, $13.7 million in tax items, $2.9 million in other revenue, and used $4 million of the reserve fund to make up the balance.
If district officials kept everything static, they would use $5.4 million of their reserve funds in 2013-14 with 2 percent tax increase and $5.6 million in 2014-15 with a 12 percent tax increase. That would exhaust the reserve fund, requiring a 48 percent tax increase in 2015-16.
The entire burden falls on the taxpayers (in 2015-16), Mr. LeBire said.
That would be followed by 9 percent tax increases in 2016-17 and 2017-18.
The increases are only partially offset by an estimated 2 percent increase in both state aid and local property taxes. If state aid stays at the projected 2 percent annual increase and the district maintains its current programs, then local property taxes would need to increase 101 percent over the next five years to bridge the budget gaps, Mr. LeBire said.
With costs exceeding revenue, the district faces large budget gaps. Every year we sink a million and a half (dollars) deeper into the hole (by maintaining current programs), he said.
Mr. LeBire emphasized that their figures on Thursdays were just a planning document.
No one is saying the sky is falling, but we do see tough times ahead, he said. This conversation tonight forces us to look into the future and start charting a course that best protects our students, our employees and our community.
Building principals and administrators had been invited to Thursday nights Finance Committee meeting, according to Mr. LeBire, and he said they would be reaching out to union leaders in the district to invite them to become part of the process. At some point, he said, they would be opening the meetings to community members.
Well try to get as many stakeholders as we can in the process, he said.