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Canton may face $2 million budget gap

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By SUSAN MENDE

CANTON - Unless more state revenue comes through, Canton Central School District officials are predicting a roughly $2 million budget shortfall next school year.

School Superintendent William A. Gregory said the $778,858 in extra state aid allocated to the district in the governor’s proposed budget is more than offset by the $1.8 million gap elimination adjustment (GEA) the district faces in the 2013 state spending plan.

Board President Barbara B. Beekman said the state aid figures released last week are misleading in some cases.

“You get more state aid, but then they deduct $2 million,” Mrs. Beekman said.

She said the state government has a “rainy day” fund that it could use to help struggling school districts.

“Schools and municipalities have wiped out their rainy day funds, but the state hasn’t spent one nickel,” Mrs. Beekman said. “How much harder does it have to rain?”

Two years ago, the GEA cost the district $2.4 million followed by $2.1 million this school year. About 50 faculty and staff jobs were cut during that time period.

The 9.8 percent state aid increase for Canton reported in 2013 state budget runs last week is misleading because all of the district’s “excess costs” were not included in the calculations, Mr. Gregory said.

As a result, the year-to-year budget increase appears higher than it should.

Also, more than half of the $778,858 aid increase is allocated specifically for building aid, rather than operational aid meaning it can’t be used to fund jobs or programs next school year.

“About $400,000 of the increase can only be used for building aid,” Mr. Gregory said. “In my view, that artificially inflates the budget. The operational aid is the major culprit.”

Despite a strong lobbying campaign from the north country, Gov. Andrew M. Cuomo refused to revise the state aid formula so that more funds would be earmarked for low-wealth school districts.

Also, efforts to reclassify Canton as an average-needs district to a high-needs district have so far been unsuccessful. The category switch would have generated an estimated $1 million more for the district. School advocates also lost their plea to have the GEA removed from the state budget.

With state building aid excluded, Canton Central is slated to receive 2.76 percent more for operational expenses. Adding building aid jumps the increase to 5.8 percent.

Overall, the governor’s budget would provide $14,277,567 to the district, compared to this year’s $13,498,709.

Although the news is grim, Mr. Gregory said two scenarios could improve the district’s financial situation before the final state budget is adopted April 1.

“There are a couple wild cards out there,” Mr. Gregory said. “There is still an opportunity to influence this situation.”

In addition to the governor’s $611 million school aid increase, he has proposed $203 million in “fiscal stabilization” funding.

That pool of money is supposed to be a one-time financial relief to districts facing extraordinary increases in fixed costs such as pension contributions. The funding is supposed to be distributed through negotiations with the state Legislature.

The governor has also introduced a “stable pension contribution rate proposal.”

It allows school districts to lock-in for 25 years a 12.5 percent contribution rate for Teacher Retirement System contributions. The lock-in rate is 12 percent for the Employee Retirement System.

Rising expenses, including $845,700 increase in employee benefit expenses and $215,900 in salary hikes were the major cost drivers in this year’s $23.3 million Canton school budget. Debt service payments increased by $97,500 and payment to St. Lawrence-Lewis Board of Cooperative Educational Services increased by $88,800.

The preliminary $24,4420,123 million budget for next year calls for increasing the budget by 4.76 percent, which amounts to $1,153,770.

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