new york state council of school superintendents school finance survey
TRANSCRIPT
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Cant Get There From Here
Budgeting challenges call for newdirections in state policy to helpschools raise student achievement
2nd Annual Survey of New York State School
Superintendents on Financial Matters
November 2012
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Table of Contents
PageHighlights 2
Introduction... 3
Overall Fiscal Condition..... 7
Budgeting Choices.... 13Personnel.... 14Instruction... 15Other direct student services..... 16Operations, maintenance and construction... 16Other actions.. 16
Impact of 2012-13 Budget Decisions... 17
Adapting to the Tax Levy Cap 21
Assessing the impact....... 21Tax levy cap impact on collective bargaining..... 22
Implementing Evaluation Reforms...... 24Anticipated cost impact.... 24Demands on administration........ 25
Looking Ahead.. 28Anticipated cost pressures..... 28Tax cap or state aid which is the greater concern?...................... 29Priorities for mandate relief.... 30Priorities for new funding.... 33
About the Survey:Between August 16 and September 3, 2012, the New York State Council of School Superintendents conducted anonline survey of its members who are superintendents on budgeting concerns for their districts. The survey wasconducted using the services of K12 Insight, a strategic partner of the Council.
A total of 249 superintendents submitted complete responses, a response rate of 40.4%. Incomplete submissionsfrom 47 superintendents were also included in the results.
Superintendents serving the Big 5 Cities (New York, Buffalo, Rochester, Yonkers, and Syracuse) and Boards ofCooperative Educational Services were not included in the survey because their systems budgets are not subject
to voter approval and consequently do not report some of the financial data available for small city, rural and
suburban districts.The Council conducted a similar survey in 2011, with a similar response rate. In some instances, we compareresults between the two years. However, the samples are different, since some of the superintendents respondedin one year and not the other.
Finally, K12 Insights survey tools permit extensive cross-tabulations and we do report some findings broken downby region or district character (i.e., urban, suburban, or rural). Particularly when examining regional results, it ispossible that the districts whose superintendents responded are not fully representative of their region. We dofind some regional results to be more positive than anecdotal exchanges with district officials would have causedus to antici ate.
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HIGHLIGHTS
The survey: The Council of School Superintendents conducted an online survey of its members on school fiscalmatters; 249 superintendents (40.4%) submitted complete responses. Partial responses from 47 superintendentswere also counted. Because their school budgets are not subject to voter approval, superintendents serving theBig 5 Cities and BOCES were not included in the survey. The Council conducted a similar survey in 2011.
Overall condition: 52% of superintendents say their districts financial condition is worse or significantly worsethan a year ago. In 2011, 75% of superintendents said their districts condition had worsened. The share of citysuperintendents reporting their districts financial condition is poor or very poor rose sharply, from 24% to 43%.
Reliance on reserves: 83% of superintendents are concerned or very concerned by their districts reliance on one-time resources (reserves) to fund recurring costs. Without the use of fund balance this year, districts would haveneeded to raise taxes by 7 percent more than they actually did, or make cuts of corresponding magnitude.
Financial insolvency: 9% of superintendents say that within two years, given current trends, their districts maybecome unable to ensure some financial obligations will ever be paid. This share would equate to roughly 60districts. Altogether 41% foresee reaching that condition within 4 years. North Country superintendents foreseethe most immediate threats.
Educational insolvency: 18% of superintendents say that within two years, given current trends, their districts maybecome unable to fund all state and federal mandates for instruction and student services. 77% foresee reachingthat condition, either within 4 years or beyond. Again, concern is most immediate in the North Country.
Job cuts: Districts reduced their workforce by an average of 3.9% this year, on top of 4.9% in 2011-12. Reductionswere generally steepest among city and rural districts and in non-teaching student support positions.
Salary and benefit concessions: 35% of superintendents report a cost saving agreement with their teacher unionthis year, the highest percentage in 3 years. 45% percent report agreeing to freeze their own salary or makeanother cost saving adjustment as in 2011, this is a higher share than for any other employee category.
Instructional cuts: 59% of districts increased class sizes this year, compared to 48% in 2011-12. 31% reducedsummer school. 31% reduced or deferred purchases of instructional technology at a time when technology isseen as a key to improving outcomes and reducing costs.
2012-13 budget impact: More than 40% of superintendents said their districts budget this year had a negativeimpact on core elementary school instruction, extra help for students who need it, operations and maintenance,extracurricular activities, athletics, and administration
Tax levy cap: 67% of superintendents said that the new property tax levy cap led their district to adopt a spendinglevel below what would have been done otherwise. 60% said the cap caused their adopted budget to have a morenegative impact on programs than would have otherwise occurred. 59% said the cap makes it more likely thatthey will be able to negotiate cost savings with their teacher union or that it had already had that impact.
Teacher/Principal Evaluations: 70% of superintendents said new requirements for teacher and principalevaluations will require their districts to spend significantly more than under prior practices. Professionaldevelopment (training) needs are seen as the biggest cost-driver followed by new student assessment costs. 40%of superintendents say teacher evaluations will now consume more than 40% of a typical principals time, raisingconcerns about how to balance other responsibilities.
Tax cap or state aid which is a greater concern?: Asked which is the greater financial concern for their districts the tax levy cap or possible future state aid levels 44% picked state aid (up from 23% in 2011), 13% chose the taxcap (down from 25%), and 43% said they are of equal concern. In poorer upstate regions away from the HudsonRiver, only 5% of superintendents now pick the tax levy cap as the greater concern.
Priorities for mandate relief: Superintendents top mandate relief priority is to amend the Triborough lawsguarantee ofstep increases after a collective bargaining agreement has expired. Actions to reduce health carecosts and stop unfunded mandates were other leading priorities.
Priorities for new spending: As in 2011, providing more extra help for students who need it emerged as the toppriority should new funding become available.
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Introduction
This is a report chiefly about the financing of
education. But the real business of schools is
learning, preparing young people to thrive in life
beyond school.
The surveys we summarize in this report explain
the financial obstacles that school leaders foresee in
their efforts to deliver that result for all the children
and young people they serve.
The challenge and the mission
New York is a hugely diverse state, in ways that
can inspire or discourage. Those disparities appear in
schools, as well as other aspects of our state.
We are home to some of the nations absolute best
public schools. Perennially, we dominate the Intel
Science Talent Search. We rank second among thestates in percentage of high school graduates earning
a three or better on Advanced Placement exams.
At the same time, by one measure, we rank 44th in
high school completion rate for African-American
students, and 45th for Hispanic students.
We usually lead the nation in per pupil spending,
along with our neighbors in the northeast. Yet we
also have among the widest gaps in spending between
high and low poverty school districts, exceeding all
our neighbors.1
Now the long quest to lift all students to high
school completion by has been joined by a new goal
not just in our state, but across all states: to
guarantee every graduate finishes school prepared to
succeed in college, a career, or both.
That goal ought to be a common sense propo-
sition: if a son or daughter meets the expectations
schools and the State of New York have set for
earning a high school diploma, that achievement
should attest he or she is prepared to succeed in the
next steps toward adult life.
The goal also matches the promise of the state
constitution a system of free common schools,
wherein all the children of this state may be
1 Education Law Center, Is School Funding Fair? ANational Report Card. June 2012.
educated. Courts have interpreted the promise to
mean schooling that prepares students for the adult
responsibilities of competitive employment and civic
participation, voting and jury service.
High rates of remedial class-taking in college
provide one piece of evidence that we have work to doto guarantee real readiness for adult challenges.2 It is
true that if this shortfall could be fixed in an instant,
colleges would strain to adapt. Also,Americas
generosity with second chances is a national strength.
But the demands that an aging population will pose
on public resources in years to come require all our
public enterprises to become more efficient.
There is another practical imperative. Middle skill
jobs have been disappearing, consigning workers to a
choice of extremes and contributing to a widening in
income inequality.3 More than ever, a future worthaspiring to demands educating for higher skills.
Our surveys illustrate one set of obstacles in our
path to that destination.
Two surveys, a common theme: alarm for the future
A year ago, the New York State Council of School
Superintendents published results from our first-ever
comprehensive survey of our members about their
districts budgeting choices and financial prospects.
Stressing that districts had already been through two
difficult years before the survey, the report noted,Concern over the accumulating impact of past
budget choices is compounded by what lies on the
horizon for schools rising expectations combined
with diminished revenues. The report found near
universal alarm about future prospects.
THE COUNCIL conducted a second finance survey
just before the start of this school year. We conclude
that the level of alarm over the future has not
diminished, although the pace of deterioration in
school finances may have slowed.
2 For example, see Testimony of Drew Matonak,president of Hudson Valley Community College, New NYEducation Reform Commission, July 10, 2012.
3 Federal Reserve Bank of New York, Regional EconomicPress Briefing on Job Polarization and Rising Inequality(May 30, 2012).
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Last year vs. this year
Comparing results on questions posed in both
years, a reader might conclude that, since smaller
percentages of superintendents gave negative
responses this year, conditions are improving. A key
point, however, is that negative impacts accumulate,
making future budgeting challenges greater.
For example, for 2011-12, superintendents
reported eliminating an average of 4.9 percent of
school positions. For 2012-13, that figure declined to
3.9 percent. But the implication is that districts have
eliminated an average of 9 percent of their positions
over the past two years, and would face more painful
personnel choices if future budgets demand more
cuts.
Insolvency
New questions asked in the 2012 survey draw into
focus the financial threats school leaders anticipate.
In recent years, warnings that school districts and
municipalities are threatened by insolvency have
swelled. We asked superintendents, Do you foresee
a point at which your district would be unable to
ensure that some of its financial obligations will ever
be paid?
Statewide, 9 percent of superintendents anticipate
their districts could reach that position within two
years. That share would equate to roughly 60districts. Altogether, 41 percent of superintendents
foresee facing that definition of insolvency within
four years.
Retaining the capacity to give all students a
meaningful education is an even wider concern than
just preserving financial solvency.
Statewide, 18 percent of superintendents foresee
their districts reaching a point within two years
where funding all state and federal instructional and
student service mandates will no longer be possible.Half of all superintendents anticipate their districts
will fall into that state within four years.
Insolvency fears are especially acute in the North
Country, for example. Within two years, 25 percent
of North Country superintendents see their districts
facing financial insolvency, and 50 percent anticipate
educational insolvency.
Why?
Why do school district leaders look to the future
with such alarm? We see at least five reasons.
First, schools have already been through a
prolonged stretch of difficult budgeting. The low-
hanging fruit easier budget balancing options have already been implemented.
Most state aid was capped in 2009-10, then cut in
both 2010-11 and 2011-12. Districts typically did not
turn to local tax increases to offset the austerity in
state aid to the extent they did in prior periods.
Proposed tax increases during the recent span
averaged 2.9 percent more than five points below
the 8.2 percent average increases proposed in 2003,
the last time aid was cut.
Second, some large and hard to control costs
have been surging.
We estimated that pension and health insurance
costs alone would have driven up total school
spending an average of 2.5 percent in both 2010-11
and 2011-12, even if all other costs could have been
frozen. These are hard to control costs: schools
cannot reduce pension obligations except by cutting
jobs and, like all employers, they struggle with health
care costs. Actual overall school spending increases
proposed by districts averaged under 1.4 percent bothyears, indicating that districts cut other expenses to
absorb those costs.
Growth in pension costs slowed some for the
current year, but last month the State Teachers
Retirement System projected that employer
contribution rates will need to increase from 11.84
percent to between 15.5 and 16.5 percent in 2013-14.
8.2%8.7%
7.5%
6.1%
4.3%3.7%
2.1%
3.2% 3.4%
2.2%
4.8%
6.9% 6.6% 6.3%6.1%
5.3%
2.3%
1.4% 1.3%
1.7%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Percentchangeoverprioryear
Schools were holding down taxes and spendingbefore the tax cap
% Change in proposed tax levy % Change in p roposed school spending
SOURCE: Council analysis ofNYSED Property Tax Report Card
data ; Big 5 Cities not included
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The contribution rate is applied against the payroll
for employees in TRS, so the rate increase is equiva-
lent to mandating districts to absorb a cost equal to
giving all those employees 3.6 to 4.6 percent raises,
on top of any actual raises. Had the size of this
increase been known at the time of our survey,
results might have been even more pessimistic.
There are other costs to absorb. A rule of thumb is
that step increases in collective bargaining agree-
ments additional pay for an additional year of ser-
vice are commonly around 2 percent. With payroll
typically accounting for half of school spending, a 2
percent increase in salaries alone would translate into
a 1 percent increase in overall spending. The states
Triborough law guarantees payment of these
increases even after a collective bargaining agreement
expires. Superintendents see Triborough as anobstacle to negotiating both restraint on salary
growth and actions that could save on health
insurance. In the survey, superintendents identify
amending Triborough and prescribing minimum
employee contributions for health insurance as their
two top priorities for mandate relief.
Third, at least from a district-level perspective,
state governments appetite for mandates on schools
has not been satisfied.
The Board of Regents and State Legislature have
approved limited changes in special education man-
dates. District sharing opportunities through Boards
of Cooperative Educational Services and joint pur-
chasing have been expanded. But these are small
steps. Governor Cuomos Tier VI pension reform
proposal was enacted and will significantly shift the
balance of costs from districts toward employees, but
its near-term savings impact is limited.
At the same time, THE COUNCILs surveys find
schools straining under new mandates arising from
the Regents Reform Agenda and the states commit-ments under its federal Race to the Top grant.
In our 2011 survey, 77 percent of superintendents
said the cost of implementing Race to the Top items
would significantly exceed their funding from that
grant. This year, 70 percent said that new teacher
and principal evaluation requirements will require
significantly greater expenditures than past practices.
Beyond the monetary costs, the demands new
mandates create for school administration are
causing alarm too. Statewide, 73 percent of superin-
tendents predict that conducting teacher evaluations
will now require more than 30 percent of a typical
principals work week, raising concerns about their
availability to handle everyday student and family
issues. At the same time, our surveys indicate that
districts have cut their administrative staffs by an
average of 12 percent over the past two years.
Fourth, schools have been drawing from reserves
to avert actions that would have had even greater
negative impacts on students, local taxpayers, or
both. Barring a reversal in other financial trends,
that option will be exhausted.
The State Education Department has reported
that school district rainy day reserves shrank from$2.76 billion in 2009-10, to $1.21 billion in 2012-13.4
Without use of appropriated fund balance in their
budgets this year, districts would have needed to
raise taxes by 7 percent more than they proposed (by
9.2 percent, instead of 2.2 percent), or make cuts of
corresponding scale. Among the poorest 10 percent
of districts, tax increases averaging 21 percent would
be needed to replace these temporary resources. In
open-ended comments, several superintendents
warned that their districts financial condition will
deteriorate rapidly as reserves are eliminated.
Fifth, approximately 92 percent of school district
revenues local taxes and School Aid are now
subject to state imposed growth limits.5
The property tax levy cap makes it harder for
school districts to gain voter approval for local tax
increases, and imposes harsher consequences if voter
approval is not obtained districts are foreclosed
from any increase in tax levy.
As the chart on page 4 showed, school leaders
were holding down tax and spending increases evenbefore the cap became law. The cap has caused
4New York State Education Department, 2012 RegentsSchool Finance Symposium: Improving StudentLearning in Fiscally Challenging Times, September 11,2012.
5 New York State Education Department, ibid.
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further restraint, however. Responding to our survey,
67 percent of superintendents said the cap had led
their districts to adopt a lower budgeted spending
level than would have otherwise occurred.
The test of a budget is not only whether it attains a
numerical balance, but whether it advances largerpurposes as well. Statewide, 60 percent of
superintendents believe the tax levy cap caused their
districts to adopt budgets with a more negative
impact on programs and services than would have
happened without it.
Supporters have characterized the tax levy cap as
a blunt instrument that will ultimately force tighter
budgeting at the local level and action on mandate
relief at the state level. Fifty-nine percent of
superintendents do foresee the cap providing
leverage to negotiate savings agreements in collectivebargaining with their teacher unions.
Less known is that the other major school revenue
source state aid is also subject to a cap now. Tied
to yearly changes in the total personal income of state
taxpayers, the cap provided for a 4.1 percent ($805
million) increase in School Aid this year and is
expected to allow for a lesser increase in 2013-14.
Below is a chart comparing the per pupil increases
in general purpose state aid in the 2012-13 state
budget and the Gap Elimination Adjustment cut tooverall aid in the 2011-12 state budget. Districts are
sorted by property wealth per pupil. Three points
are worth noting:
The 2011-12 aid reductions were regressive,generally imposing larger per pupil cuts on poorer
districts.
The 2012-13 increases are more progressive. This years restorations are critical, but remain
small in comparison to what districts lost. Despite
the increase, 83 percent of districts are stillreceiving less state aid than they did in 2008-09.
It should also be recalled that this years state aid
increase was partly offset by the end of the federal
Education Jobs Fund.
Our survey a year ago revealed striking differences
across regions over which revenue item was the
greater concern. More affluent regions picked the tax
levy cap, while poorer areas cited future state aid
levels. Some districts, we said, were capped by
circum-stances before they were capped by law so
property poor that no plausible local tax increase
could offset the combined impact of state aid cuts and
employee benefit increases.
Source: Council analysis of NYSED School Aid data
Our 2012 survey shows roughly a 20 point shift in
the direction of state aid as the greater revenue
concern across nearly all regions. As we speculated a
year ago, the tax levy cap raises the stakes over the
distribution of state aid for all districts.
Finally, the remaining 8 percent of schoolrevenues federal aid is not capped by state law.
But it is more likely to shrink than grow as Congress
and the President wrestle to construct long-term
deficit reduction plans.
Conclusion
This report illustrates profound concerns super-
intendents share over the finances of the school
systems they lead. But they have larger challenges as
well preparing new generations for the demands
adult life will present them in the decades ahead.
Whatever the prospects school leaders and voters
might have for balancing district finances, meeting
their greater goal at the same time will require help
from state leaders changes in rules so that schools
produce more learning for their students with the
resources their taxpayers provide, and more consis-
tent financial support from the state, especially for
those serving the poorest children and communities.
-$978
-$1,472
-$1,487
-$1,298
-$1,185
-$812
-$1,096
-$1,070
-$805
-$536
-$400
-$944
$318
$342
$292
$250
$186
$195
$147
$160
$113
$54
$21
$189
-$1,500 -$1,000 -$500 $0 $500
(Poorest 10%) 1
2
3
4
5
NYC
6
7
8
9
10
NYS
Per pupil change in aid
Per pupil change in major School Aid elementsDistricts grouped by property wealth per pupil
2011-12 Gap Elimination Adjustment 2012-13 General purpose aid restorations
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Overall Fiscal Condition
THE COUNCILs survey asked superintendents
several questions related to the overall fiscal
condition of their district. Some questions were
repeated from the 2011 survey, to allow analysis of
year-to-year change.
New questions posed this year add to the wave of
warnings about insolvency threatening schools and
municipalities. For example, more than 75 percent
of superintendents can foresee a time when their
districts could be unable to ensure that some of their
financial obligations would ever be paid.
Writing of our 2011 findings, we said, The survey
reveals widespread alarm about the financial outlook
for the states public schools. Questions repeated in
the 2012 survey give continuing cause for alarm, withonly a few faint signs of improvement from last years
survey.
Insolvency
About three years ago, school district leaders
began warning of possible financial insolvency and
asked whether it is possible for a district to declare
bankruptcy.6 More recently, leaders have begun to
speak of educational insolvency envisioning
schools reaching a point where they would be unable
to provide students an adequate education. This
years survey explores both concerns.
To learn about fears of financial insolvency, we
asked,
Given current revenue and expenditure trends,
and current reserve levels for your district, do
you foresee a point at which your district
would be unable to ensure that some of its
financial obligations will EVER be paid?
Statewide, 9 percent of superintendents said they
anticipate their districts could face insolvency under
that definition within two years. That may appear to
6 The short answer is no, there is no legal mechanismfor a school district in New York State to declarebankruptcy.
be a low share, but the figure would translate into
roughly 60 school districts.7
Alarmingly, 41 percent of superintendents believe
their districts may face financial insolvency within
four years, and another 36 percent fear it could come
at some point beyond four years. Only 15 percent of
superintendents said they did not foresee theirdistricts threatened by insolvency.
Superintendents of rural districts were most likely
to anticipate possible financial insolvency for their
school systems within the next two years.
7 A recent report by the New York State Association ofSchool Business Officials (A Tale of Two Insolvencies,September 6, 2012) found that 215 lower wealthdistricts are on track to begin to exhaust all savings by2015. District leaders will attempt to avert or delayactual insolvency, however.
1%
2%
6%
32%
36%
15%
9%
0% 10% 20% 30% 40%
Yes, we are currently unabl e
Yes, within 1 y ear
Yes, between 1 and 2 year s
Yes, between 2 a nd 4 ye ars
Yes, beyond 4 year s
No, I do not foresee that time
Unsure
Do you foresee a point at which your district would beunable to ensure that some of its financial obligations willEVER be paid?
9%
7%
4%
11%
0% 2% 4% 6% 8% 10% 12%
Total
City
Suburb
Rural
% of districts foreseeing financialinsolvency within 2 years
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By a wide margin, superintendents in the North
Country region8 were most likely to foresee the
possibility of financial insolvency in their districts
nearer-term future.
8 The regions used in this report are defined as follows:
Long Island: Nassau and Suffolk Counties
New York City
Lower Hudson Valley: Putnam, Rockland, Westchester
Mid-Hudson Valley: Dutchess, Orange, Sullivan, Ulster
Capital Region: Albany, Columbia, Greene, Rensselaer,Saratoga, Schenectady, Warren, Washington
Mohawk Valley: Fulton, Herkimer, Montgomery,Oneida, Schoharie
Central New York: Cayuga, Cortland, Madison,Onondaga, Oswego, Tompkins
North Country: Clinton, Essex, Franklin, Hamilton,Jefferson, Lewis, St. Lawrence
Southern Tier: Broome, Chemung, Chenango,Delaware, Otsego, Schuyler, Steuben, Tioga
Finger Lakes: Genesee, Livingston, Monroe, Ontario,Orleans, Seneca, Wayne, Wyoming, Yates
Western New York: Allegany, Cattaraugus,Chautauqua, Erie, Niagara
Educational Insolvency
Inability to fund the components of a basic
education is a more immediate threat for districts
than financial insolvency.
The survey defined educational insolvency in
terms of ability to fund state and federalrequirements and asked,
Given current revenue and expenditure trends
and current reserve levels for your district, do
you foresee a point at which your district
would be unable to fund all the instructional
and other student service requirements
established by laws or regulations approved
by the state and federal governments?
Statewide, 5 percent of districts reported they are
already unable to fund mandated instructional andother student services. A total of 19 percent of
districts anticipate falling into this state of
educational insolvency within two years, and 51
percent of superintendents believe their districts
could reach that state within four years.
Consistent with other indicators of overall finan-
cial outlook, concern about educational insolvency
was greatest in the North Country. In that region, 50
percent of superintendents said they foresee their
districts becoming unable to meet state and federal
student service requirements within two years, and
18 percent say their districts are currently unable todo so.
9%
0%
6%
0%
15%
7%
6%
25%
8%
6%
12%
0% 5% 10% 15% 20% 25% 30%
Total
Long Island
Lower Hudson Valley
Mid-Hudson Valley
Capital Region
Mohawk Valley
Central New York
North Country
Southern Tier
Finger Lakes
Western New York
% of districts foreseeing financialinsolvency within 2 years
5%
5%9%
32%
33%
12%
4%
0% 5% 10% 15% 20% 25% 30% 35%
Yes, we are currently una ble
Yes, within 1 yearYes, between 1 and 2 years
Yes, between 2 and 4 ye ars
Yes, beyond 4 years
No, I do not foresee that time
Unsure
Do you foresee a point at which your district would beunable to fund all the instructional and other studentservice requirements established by laws or regulationsapproved by the state and federal governments?
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Superintendents of rural districts were most likely
to predict educational insolvency within two years.
Other measures of overall fiscal conditionOne of the most striking findings in the 2011
survey was the near universal worry about reliance on
reserves: 89 percent of superintendents said they
were somewhat or very concernedby their districts
use of reserves to pay recurring costs. For 2012, a
similar share of superintendents expressed concern
(83 percent), but the proportion saying they are very
concerneddeclined from 66 percent to 43 percent.
Statewide, 52 percent of superintendents describe
their districts financial condition as somewhat or
significantly worse than a year ago, down from lastyears 75 percent figure.
Despite grave worries for the future, few superin-
tendents were willing to characterize their districts
currentfiscal condition as poor or very poor, either
last year or this year.
Comments volunteered in response to open-ended
questions suggest superintendents focused on the
immediate financial condition of their districts in
their answers. For example, one downstate suburban
superintendent wrote, Our current strong financial
health is simply current - I will not be able to describe
us as strong in a year or two.
Comparing regions and types of communities
As in 2011, there were variations across types of
districts and across regions in the assessment of
overall fiscal condition and trajectory.
In both years, urban superintendents were more
likely toview their districts financial condition as
poor. The share of city superintendents assessing
their districts financial condition as either poor or
very poor jumped sharply from 24 percent to 43
percent.
19%
11%
17%
14%
22%
14%
12%
50%
8%
15%
21%
0% 10% 20% 30% 40% 50% 60%
Total
Long Island
Lower Hudson
Mid-Hudson Valley
Capital Region
Mohawk Valley
Central New York
North Country
Southern Tier
Finger Lakes
Western New York
% of districts foreseeing educationalinsolvency within 2 years
19%
14%
18%
21%
0% 5% 10% 15% 20% 25%
Total
City
Suburb
Rural
% of districts foreseeing educationalinsolvency within 2 years
66%
23%
6%
5%
49%
34%
11%
6%
0% 10% 20% 30% 40% 50% 60% 70%
Very concerned
Somewhat concerned
Not concerned, our use of reserves islimited
Our district is not drawing uponreserves to pay for recurring operating
expenses
To what extent, if at all, are you concerned that your district isdrawing upon reserves to pay for recurring operating costs?
2011 2012
1%
6%
41%
42%
10%
1%
2%
23%
53%
22%
0% 10% 20% 30% 40% 50% 60%
Significantly better
Somewhat better
About the same
Somewhat worse
Significantly worse
Compared to one year ago, how has the financial conditionof your district changed, in terms of its ability to fund
services meeting expectations of parents in the community?
2011 2012
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Superintendents leading urban districts were also
more likely to say their districts financial conditionhad worsened from a year ago, and to express
concern about reliance on reserves. Ninety-five
percent of city superintendents said they were
somewhat or very concerned by their districts use of
reserves to fund continuing costs, compared to 83
percent for suburban superintendents and 82 percent
for rural superintendents.
Looking across regions of the state, results are
mixed. Generally, superintendents in the North
Country and Southern Tier appear to have the
greatest concerns about overall financial conditionand outlook.
Digging into reserves
The practice seems to have diminished, but for a
time it was popular for elected officials and news
sources to condemn schools for excessive reserves
and call on them to drain those accounts to avert
layoffs or property tax increases. There have always
been at least three problems with this strategy.
First, schools are more limited by law in the
reserves they are allowed to maintain than other
public entities in New York State.
School districts are permitted to maintain an
unrestricted fund balance equal to up to 4 percent of
their budget. Municipalities have no percentage limit
and the Government Finance Officers Association
recommends maintaining an unreserved fund
balance of between 5 and 15 percent of general fund
revenues, or up to two months expenses. So what
New York school districts are permitted to maintain
as a maximum rainy day fund is less than what
experts deem adequate as a minimum.
Second, reserves run out. Eventually, a district
must either permanently reduce expenditures to align
them with its reliably recurring revenues, or raise
taxes to match revenues with spending. The deeper
the reliance on reserves, the more painful the day of
reckoning when they run out.
As noted in the introduction, the State EducationDepartment has reported that school district rainy
day reserves shrank from $2.76 billion in 2009-10,
to $1.21 billion in 2012-13.
Third, year-in and year-out, schools already use
reserves to manage turbulence in their financial
operations, some of which arises from swings in the
states fiscal posture.
For example, in the Property Tax Report Cards
filed for their May 2012 budget votes, school districts
reported using assigned fund balances totaling over$1.2 billion. Without these funds appropriated out of
existing reserves or current year operating surpluses,
districts would have had to raise taxes or cut
spending by an equivalent sum.
To put that figure in perspective, to match what
they used from fund balances in their 2012-13
budgets, districts would have had to raise local taxes
24%
12%
20%
17%
43%
10%
18%
17%
0% 10% 20% 30% 40% 50%
City
Suburb
Rural
Total
% Responding Poor or Very Poor
How would you describe the current f inancial condition ofyour school district, in terms of its ability to fund servicesmeeting the e xpectations of parents in your community?
2011 2012
Various measures of fiscal condition, by region
Region
Financial
condition
poor/very
poor
Financial
condition
worse than
1 year ago
Reserves
less than
adequately
funded
Concerned
about
reliance on
reserves
Total 17% 52% 31% 82%
Long Island 2% 43% 21% 75%
Lower Hudson Valley 13% 34% 32% 77%
Mid-Hudson Valley 7% 53% 33% 73%
Capital Region 27% 59% 42% 81%
Mohawk Valley 18% 56% 30% 89%
Central New York 20% 35% 25% 70%North Country 39% 54% 39% 94%
Southern Tier 27% 65% 49% 87%
Finger Lakes 6% 48% 13% 87%
Western New York 17% 64% 29% 88%
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by 6.8 percent more than they actually proposed (9
percent, rather than 2.2 percent). Or they would have
had to cut spending by an average of 4.1 percent from
what they actually budgeted.
By these measures, poor districts depended on
reserves the most in putting together their 2012-13school budgets. Without what they appropriated
from fund balance, the poorest 20 percent of districts
(measured by property wealth per pupil) would have
had to raise taxes byan additional 21 percent.
The mandated low percentage limit on
unrestricted reserves for school districts may have
made sense when school revenues were more stable
and predictable from year-to-year. But as state
government became increasingly dependent on
receipts from Wall Street-related activities, School
Aid entered an era of boom and bust cycles,increasing financial uncertainties for all districts, and
especially for poor, heavily aid dependent school
systems.
SOURCE: Council analysis of NYSED Property Tax Report Card data
-14%
-31%
-23%
-9%
-18%
-22%
-10%
-9%
-12%
-4%
-7%
7%
21%
17%
11%
10%
11%
8%
6%
5%
3%
3%
-35% -25% -15% -5% 5% 15% 25%
Total State
1 (Proorest 10%)
2
3
4
5
6
7
8
9
10
What happens when reserves run dry?Districts grouped by property wealth per pupil
Change in unrestricted fund balance from 2011-12 to 2012-13
Additional tax increase which would be needed without use of fund balance (i.e.,appropriated fund balance as % of tax levy)
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In their own words: Overall Fiscal Condition
We are at our breaking point. Classrooms are full, 27 -30 students in most 7-12 classrooms and 19-24
students in elementary classrooms. We have cut all thelow hanging fruit, and climbed the tree for the rest. Ournext step is to start cutting off branches, which meanswe will be cutting off chunks of the learning we yield asan institution.~ Upstate rural superintendent
No matter how much we have in reserves, TRS/ERS,health insurance, and Triborough along with meagerNYS aid, makes the financial model unsustainable.~ Upstate suburban superintendent
Our district is not able to offer the level of interventionservices that our students need academically. We aregetting by through under-spending our budget, being
lean administratively and unfortunately not offering thedepth of intervention serves our students need.~ Upstate city superintendent
We have developed a plan to burn reserves over thenext three years and making significant cuts in each ofthose years to arrive at a point where we will stabilize.The reserves that we do have will provide us with thetime make those cuts until we stop burning our fundbalance. However, we will have to significantly reduceour ability to meet the educational needs of ourcommunity because of diminishing resources.~ Downstate city superintendent
We are currently using a significant amount of reservesas recurring revenue. The reserves are soon to expire. Ihave no good plan as to how we will replace this lostrevenue stream. We have already eliminated 17% of our
faculty and staff. People are complaining about classsize now. Class size will only increase in years to come.Programs will be eliminated and down-sized.~ Upstate suburban superintendent
The fluctuating unknown costs of Special Educationmake it almost impossible to create a sound budget in a
small, rural school district.~ Upstate rural superintendent
We are not meeting the state and federal requirementsfor academic intervention services now, particularly atthe high school level. We are straining to provide thenecessary resources for our elementary and middle
school children, because we know that in the long termchildren will not be successful without emphasis on
early literacy. We have consciously chosen to forestallfiscal disaster by cutting everything possible and beingout of compliance with older children.~ Upstate rural superintendent
We have cut about 15% of staff in the last four years.
However, we are using 400% more fund balance andreserves than in 2008. It is not sustainable and I fearthat within two years we will be financially insolvent.~ Upstate rural superintendent
We are in "ok" shape for now. No doubt many, manyothers are not. It's a slippery slope. Even if results show
some districts like ours are "ok" - that will change beforewe know it. And what does that say for others who arealready decimated.~ Downstate suburban superintendent
While we are solvent now, the tax cap will erode away atour fiscal stability. Uncontrollable expenses such asincreases in retirement contributions, health care costs,unfunded mandates, fuel, etc. are eating away at ourability to deliver program.~ Upstate rural superintendent
We are a Special Act School District and are rate based.BUT, funding remains an issue as our rate has notincreased in 5 years and we are not allowed by law tocarry a fund balance.~ Upstate rural superintendent
If the gap elimination adjustment remains unaltered, wewill not be able to accomplish our educational missionin the 2013-14 school year.~ Upstate rural superintendent
The local community cannot support additionalcontributions to funding the educational programsoffered their children, yet each child in New York State
should have opportunity and access to a soundeducational program. We have been operating by not
filling positions due to attrition for the last 10 yearsOffering two languages was given up over 8 years ago.Three elementary buildings with a total of 600 students
share 1 art teacher - that happened 5 years ago - wecan't meet the mandates for PE at the elementary level.The HS offers 3 AP classes - the list goes on, but when
someone retires, the position wasn't filled. Right nowwe are waiting for a retirement in the guidance staff, orwe will have another reduction of a person.~ Upstate rural superintendent
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Budgeting Choices
The core ofTHE COUNCILs survey is an exploration
of the budgeting choices schools have made over the
past three years.
General observations about school budgets
As in last years report, we stress three points
before presenting the surveys findings on the specific
actions districts took in putting together budgets.
First, You cant cut what you dont have. Poor
districts are less likely to report that they eliminated
advanced classes because they are less likely to have
them in the first place. A district conducting all
classes in a single building will not report that it
closed a school, unless it takes the extreme step of
tuitioning out all its students to a neighbor.
Related, You cannot cut what you have already
decimated. In last years survey, for every specific
budget action we identified, the proportion of
superintendents saying their district had used it
increased every year. That is not true this year;
smaller percentages of districts exercised some
options this year than in the year before. This could
happen if a districts financial condition has improve-
ed. But another explanation could be that a district
has already cut the function as much as prudent, or as
much as permitted by law our next point.
Second, some items cannot be cut because they
are mandated by Albany or Washington. For
example, the operation of special education services
is heavily prescribed by state and federal mandates
and over multiple years, special education is seen as
less negatively affected by budget decisions than any
other service. In the same vein, the demands of the
states new teacher evaluation requirements have
raised concerns about maintaining the administrative
capacity necessary to comply.
Third, understanding where schools can cutrequires recognizing where their spending goes to
start.
One way to break down school spending is by the
commodities it buys; another is by the purposes it
serves. Personnel salaries and benefits comprises
about three quarters of school spending by
commodity. Instruction consumes a comparable
share by purpose.
Source: Council analysis of NYSED School District Fiscal Profile data(2009-10); Big 5 Cities not included
Source: Council analysis of US Census Bureau data (2009-10); Big 5Cities not included
Personnel
As noted, 70 to 80 percent of spending in a typical
district is devoted to personnel. That means 70 to 80
percent of any cuts needed to achieve a balanced
budget are likely to come from personnel. Although
the impulse of school leaders and voters may be to
cut things before people, that becomes harder and
harder after a series of lean years exhausts less
painful options.
There are two ways to reduce personnel costs:
employ fewer people, or spend less per employee.Like it or not, districts have more latitude to exercise
the former option than the latter salaries and many
benefits are locked-in by contracts, and pension
contributions are prescribed by state law and retire-
ment system calculations. Nonetheless, THE
COUNCILs survey found districts using both
approaches.
Instruction,
74.1%
Operations &maintenance,
6.5%
Debt service,
6.6%
Other, 5.4%
Transportation
, 5.1%Central
Office, 2.3%
Where school spending goes -- by purpose
Salaries &wages, 54.5%
Employeebenefits,
20.2%
Everythingelse, 25.2%
Where school spending goes --by commodity
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Teacher compensation is the largest single item in
virtually every districts budget and reducing teaching
positions was the most commonly reported personnel
cost reduction. Statewide, 67 percent of superintend-
dents said their districts reduced teaching positions
this year, down from 72 percent in 2011-12.
We estimate that districts reduced their teaching
staffs by an average of 3.6 percent, this year, downfrom 4.3 percent in 2011-12.
Fewer districts also report cutting administrative
positions this year there are fewer to eliminate.9
But districts continued to cut these positions more
steeply than teaching jobs, eliminating an average of
5.2 percent of their administrative positions.
9 By law, districts are required to report compensationfor all administrative positions carrying the titlesuperintendent, or deputy/associate/assistantsuperintendent, or any other certified administrativeposition (e.g., principal) paying more than $123,000.For 2012-13, 301 districts 44 percent of the total report only one position meeting the criteria theirsuperintendent. Some may have other central officepositions bearing different titles and paying below thereporting threshold, but this measure does give someindication of how administratively lean many districtsare.
Position reductions are down across all categories
compared to 2011-12. But it is essential to recognize
that the impact is cumulative this years 3.9 percent
reduction in total positions comes on top of last years
estimated 4.9 percent cut. Further, data compiled by
the Gannett News Service Capitol Bureau10 shows
that districts outside the Big 5 cities reduced total
staffing by another 3.9 percent in the two preceding
years (2009-10 and 2010-11). Compounding all these
figures suggests that school districts have eliminated
roughly 12 percent of their positions since 2008-09.
As in 2011-12, job cuts tended to be deeper in city
and rural districts than in suburbs. City districts
reported cutting total positions by an average of 5.2
percent, compared to 4.4 percent in rural districtsand 3.3 percent in suburbs.
10School enrollment, staff continue to decline,Rochester Democrat and Chronicle, August 20, 2012.
PERSONNEL 2012-13 2011-12 2010-11
At least
once in last
3 years
Salary freeze or other cost reduction
in salary or benefits for
superintendent 45% 59% 34% 79%
Cost-reduction concession in salaries
or benefits for other central office
administrators 36% 50% 22% 69%
Cost-reduction concession in salaries
or benefits for building level
administrators 35% 45% 20% 66%
Cost-reduction concession in salaries
or benefits agreed to by teacher
union 35% 31% 15% 54%
Cost-reduction concession in salaries
or benefits agreed to by any other
union 30% 28% 13% 48%
Reduction in central office
administration positions 22% 25% 22% 47%
Reduction in building-level
administration positions 18% 25% 20% 43%
Reduction in teaching positions 67% 72% 62% 87%
Reduction in other instructional
support or student services positions 56% 60% 46% 76%
Reduction in other positions 59% 60% 47% 79%
Other reduction in personnel costs 38% 33% 27% 47%
Layoffs Attrition
Total
Positions
Eliminated
Classroom teachers 2.2% 1.4% 3.6%
Other instructional orstudent support
personnel 3.9% 2.0% 5.9%
Administrators 3.1% 2.1% 5.2%
Other Employees 1.7% 1.0% 2.7%
TOTAL 2.4% 1.5% 3.9%
Percentage of positions eliminated by category,
2012-13
4.3%
8.0%
7.5%
3.6%
4.9%
3.6%
5.9%
5.2%
2.7%
3.9%
0% 2% 4% 6% 8%
Teachers
Other Student Support
Administrators
Other
Total
Percent reduction in positions by category,2011-12 and 2012-13
201 1-12 201 2-1 3
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INSTRUCTION 2012-13 2011-12 2010-11
At least
once in last
3 years
Increased class size 59% 48% 30% 67%
Reduced non-mandated art classes 16% 18% 11% 31%Reduced non-mandated music
classes 20% 19% 9% 33%
Reduced advanced or honors classes 17% 13% 7% 24%
Reduced summer school 31% 27% 20% 44%
Reduced extra help for students
during the regular school day or year 22% 23% 14% 32%
Reduced student enrollment in career
and technical programs 18% 12% 7% 23%
Reduced/deferred purchase of
instructional technology 31% 26% 20% 42%
Reduced/deferred purchase of
textbooks 18% 13% 8% 21%
Reduced/deferred purchase of library
materials 17% 13% 9% 22%
Eliminated prekindergarten 1% 0% 1% 3%
Reduced prekindergarten 5% 2% 1% 8%
Eliminated kindergarten 0% 0% 0% 1%
Moved from full-day to half-day
kindergarten 0% 0% 0% 2%
Other reduction in kindergarten 0% 1% 0% 3%
Combined grade two leve ls in a single
classroom 4% 2% 1% 7%
Other reduction in instruction 34% 23% 14% 38%
Superintendents led other categories of employees
in accepting salary freezes or agreeing to other
compensation changes to save money for their
districts: 49 percent of superintendents report taking
such steps in 2012-13, and 79 percent said they had
done so at least once in the past three years.11
Cost-saving concessions have been less common
among unionized employees. Nonetheless, the per-
centages have grown. For example, 35 percent of
superintendents report a cost-reduction agreed to bytheir teacher union in 2012-13, up from 15 percent
two years ago (2010-11). As discussed below, the
property tax levy cap may have an impact on
collective bargaining in some districts.
Instruction
While personnel is the largest area of school
spending measured by commodity, instruction is the
greatest expense area measured by purpose,
accounting for 74.7 percent of total spending
according to the State Education Departments
School District Fiscal Profiles. Accordingly, when
cuts are necessary, it is hard for schools to spare
either of these large areas.
By a wide margin, the most common cost reduc-
tion in instruction this year has been to increase class
sizes, reported by 59 percent of districts, up from 48
percent in 2011-12. Next most common were reduc-
ing summer school and reducing or deferring the
purchase of instructional technology, each reported
by 31 percent of superintendents. Then came reduc-
11 According to administrative compensation datareported to the State Education Department, thestatewide average superintendent salary has beenroughly flat for the past three years $165,577 in 2010-11,$165,464 in 2011-12, and $165,953 in 2013-13. Inaddition, in each of the past two years, over half thestates districts report paying their superintendent the
same or less compared to the prior year.
ing extra help for students during the regular school
day or year. As explained elsewhere in this report,
assuring extra help for students emerges as a top
concern for many superintendents.
This years survey added questions asking
specifically about actions affecting early childhoodeducation kindergarten and prekindergarten.
Although there have been warnings that some
districts are forced to consider cutting kindergarten,
it appears few have done so yet.
One superintendent reported that his or her
district eliminated kindergarten in 2010-11. In each
of the three years asked about, one superintendent
reported a district scaling back from full-day, to half-
day kindergarten. This suggests that over the past
three years, a total of 2 percent of districts have made
that reduction in kindergarten services.
For the current year, 5 percent of superintendents
reported reducing prekindergarten, and 1 percent
reported eliminating the service altogether. Not all
districts offer pre-K, however, so the prevalence of
cuts would be higher if counted against districts
which actually had a program to cut.
Total positions eliminated, by category and type, 2012-13
City Rural Suburb Total
Teachers 4.8% 4.2% 3.1% 3.6%
Other Student Support 7.7% 6.0% 5.4% 5.9%
Administrators 4.0% 6.1% 5.0% 5.2%
Other 3.5% 3.5% 2.1% 2.7%
Total 5.2% 4.4% 3.3% 3.9%
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Other direct student services
THE COUNCIL survey finds that districts have
continued to make cuts to other student services. The
proportions of superintendents saying their districts
reduced sports or other extracurricular activities
declined from 2011-12, after sharp jumps in reported
cuts to those areas last year. The share saying they
had reduced special education rose. In all of these
areas, over half of superintendents said their districts
had made cuts at least once in the last three years.
Operations, maintenance and construction
Operations and maintenance costs comprise only
6.5 percent of total school spending on average, but
in striving to cut things rather than people, districts
have continued to be aggressive in seeking savings
from this area.
Of all the budget actions across all areas,
implementing some form of energy conservation (57
percent) was the third most common, behind the
connected actions of cutting teachers (67 percent)
and increasing class sizes (59 percent). The share of
superintendents reporting their districts have
deferred maintenance is rising, from 26 percent in
2010-11, to 40 percent this year.
An apparently small proportion of districts
anticipates deferring a capital project this year (16
percent). But not all districts need to take on a
capital project in any given year.
Other actions
Our survey also allowed superintendents to check-
off an assortment of miscellaneous budget cutting
strategies.
At least 40 percent of superintendents reported
reducing funding for staff travel and professional
development, reducing participation in BOCES
services, making other shared service arrangements
outside of BOCES, and reducing reserves.
Some of the districts which reported reducing use
of BOCES services said they had also increased their
use of these services. From past anecdotal
information gathering efforts, we have found districts
scaling back participation in BOCES special educa-
tion programs, choosing to serve students with
disabilities in-house instead. At the same time,districts also reported making more aggressive use of
BOCES administrative services, including cooperative
purchasing, shared business offices, and energy
management, for example.
The survey also shows steady growth in shared
service arrangements outside of BOCES, reaching 40
percent in 2012-13.
Statewide, 14 percent of superintendents report
that their districts closed a school building at least
once in the past threeyears. As observed above, you
cant cut what you dont have. Small districts
operate fewer schools, so, not surprisingly, only 2
percent of districts with fewer than 500 students
closed a building. But 29 percent of those with over
5,000 students report having done so.
OTHER DIRECT STUDENT
SERVICES 2012-13 2011-12 2010-11
At least
once in last
3 years
Reduced interscholastic sports 34% 41% 27% 57%
Reduced other extracurricular
activities (other t han interscholastic
sports) 34% 39% 22% 55%
Changes in special education which
reduced costs 41% 37% 22% 52%
Reduced other direct student services 27% 22% 12% 32%
Reduced pupil transportation 28% 28% 12% 42%
Other reduction in student services
costs 21% 16% 11% 24%
OPERATIONS,
MAINTENANCE AND
CONSTRUCTION 2012-13 2011-12 2010-11
At least
once in last
3 years
Deferred maintenance 40% 36% 26% 47%
Any form of energy conservation 57% 48% 33% 66%
Delayed a capital project 16% 14% 10% 24%
Outsourced custodial/ maintenancework 2% 2% 2% 4%
Reducing or deferring purchases of
supplies, other than those related t o
instruction 41% 36% 26% 48%
Other reduction in operation,
maintenance or construction costs 39% 32% 22% 45%
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Impact of 2011-12 budget decisions
Our survey also asked superintendents to assess
the impact of their districts 2012-13 budget upon
various functions. More than 40 percent of superin-
tendents anticipated that the adopted budget would
have a negative impact on these functions:
operations and maintenance (50 percent), extracurricular activities (49 percent), extra help for students who need it (48 percent), administration (46 percent), athletics (45 percent), and core instruction in elementary grades (41 percent).
Percentages of superintendents anticipating that
their districts 2012-13 budget would have a negative
impact were down modestly across all service
categories. Few superintendents anticipate positive
impacts, however.
Extra help for students who need it drew the
highest share of superintendents foreseeing a severe
negative impact from the district budget, with 9
percent.
Budget impacts by district type
Rural superintendents were more likely to
anticipate negative effects on basic instruction from
their districts adopted budgets than were their city
and suburban counterparts.
City superintendents exhibited widespread
concern about extra help for students who need it, as
well as operations and maintenance, administration,
and extracurricular activities, with over 60 percent
foreseeing negative effects in each area.
Among rural superintendents, extracurricular
activities (53 percent) and extra help (52 percent)
were most commonly seen as negatively affected.
Impact on administration was the most common
concern among suburban superintendents (49percent), followed by operations and maintenance
(46 percent).
Conversely, between 10 and 15 percent of
suburban superintendents anticipate their districts
2012-13 budgets will have positive effects on core
elementary, middle or secondary instruction.
OTHER ACTIONS 2012-13 2011-12 2010-11
At least
once in last
3 years
Closed a school building 5% 7% 3% 14%
Change in school schedule for the
purpose of reducing costs (e.g.,
discontinuing block scheduling) 14% 10% 4% 23%
Reduced funding for staff trave l 52% 48% 35% 61%Reduced participation in professional
development by administrators 44% 41% 28% 54%
Reduced participation in professional
development by teachers 42% 40% 26% 51%
Reduced participation in professional
development by other staff (other
than teachers a nd administrators) 32% 30% 20% 38%
Reduced participation in BOCES
services 42% 36% 23% 51%
Increased participation in BOCES
services 25% 21% 9% 31%
Increased participation in other
shared services arrangements (not
through BOCES) 40% 25% 13% 43%
Reduced or eliminated undesignated
reserves 52% 43% 26% 58%
Reduced or eliminated designated
reserves 47% 41% 22% 53%
Changed purchasing practices 36% 28% 16% 42%
Other 8% 7% 4% 11%
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2011 Instruction in English, mat hematics, science, and soc. studies
2012 Core instruction in elementary grades
2012 Middle level instruction in English, math, science, and soc. studies2012 High school instruction in English, math, science, and soc. studies
2011 Extra help for students who need it
2012 Extra help for students who need it
2011 Advanced or enrichment classes
2012 Advanced or enrichment classes
2011 Instruction in art
2012 Instruction in art
2011 Instruction in music
2012 Instruction in music
2011 Special education
2012 Special education
2011 Athletics
2012 Athletics
2011 O ther extracurricular activities
2012 Other extracurricular activities
2011 Student transportation
2012 Student transportation
2011 Other student services
2012 Other student services
2011 O perations and maintenance
2012 Operations and m aintenance
2011 Administration
2012 Administration
2011 O ther district operations and services
2012 Other district operations and services
Impact of 2011-12 and 2012-13 budgets on selected school operationsSevere negative impact Some negative i mpact No change from prior year Positive impact
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Budget impacts by region
Long Island and the Lower Hudson Valley are the
states most affluent regions, measured by property
wealth or resident income per pupil. Superinten-
dents in those regions were less likely to anticipate
negative consequences from 2012-13 school budgets
than their colleagues in other regions. Yet Central
New York is one of the poorest regions and its
superintendents were also more optimistic on
average than colleagues elsewhere.
Superintendents in the North Country, Western
New York, and the Mohawk Valley were more likely
to foresee negative impacts from their district
budgets. Seventy-four percent of North Country
superintendents believe extra help for students who
need it will be negatively affected by their school
budget, the highest negative share for any service inany region.
Once again, you cant cut what you dont have
or what you have only in minimal quantity. This may
explain the low negative impact anticipated for
advanced classes in the Southern Tier, or art and
music in the North Country.
Total City Rural Suburb
Core instruction in elementary
grades
41% 33% 43% 39%
Instruction in English, math,
science, and social studies in the
middle level grades
33% 33% 36% 29%
Instruction in English, math,
science, and social studies in
high school
37% 40% 42% 28%
Extra help for students who need
it -- any level
48% 73% 52% 37%
Instruction in art -- any level 27% 23% 27% 26%
Student transportation 33% 57% 34% 27%
Advanced or enrichment classes 35% 50% 39% 28%
Special education 20% 14% 23% 15%
Athletics 44% 43% 47% 40%Other extracurricular activities 48% 62% 53% 39%
Instruction in music -- any level 26% 23% 32% 19%
Other student services 34% 15% 39% 31%
Operations and maintenance 49% 80% 48% 46%
Administration 46% 69% 40% 49%
Other district operations and
services
43% 57% 43% 43%
Percentage of superintendents anticipating some or
severe negative impact from 2012-13 budget decisions on
various school operations -- by district type:
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In their own words: Budgeting Choices
We were forced to take drastic budget measures in the2010-2011 school year. During that year, we reducedour staff (all areas) by 10%+. We continue to operate ata skeleton level of services for our students. As a rural
school district, we already offer a many fewer program-matic opportunities than our wealthier colleagues. Any
further reductions in programs and/or services wouldseverely limit the educational prospects of our students.~ Upstate rural superintendent
We have been routinely reducing administration (25%over three years) and were forced to go deeper atcentral office this year to avoid further reductions in thebuildings. Set minimum class sizes at HS and allowedclass sized to be larger than previous years in acceler-ated and advanced courses. Reduced the heck out of Oand M [operations and maintenenance]. Outsourced
leadership for O and M.~ Upstate suburban superintendent
Because of the reduction in administration at the centraloffice level a few years ago, we are all doing more with
fewer personnel, including sharing secretaries. We havenot had much impact on serving our AIS students be-cause the board has been adamant re no cuts. We also
support kids via federal grants. Our class sizes in HSand MS are nearing 30 so we could have smaller class
sizes in the elementary grades, i.e., 22-24/class. Wehave cut all the non-instructional we can. We reallydon't know where we can cut yet again, it will be the fifth
year in a row.~ Downstate suburban superintendent
We had little to cut since major cuts were undertakenbefore the 2010-11 school year.~ Upstate rural superintendent
We are struggling with the reductions to this point butwill make it through the year. However, without support
from the state even for low need schools we will beforced to continue to challenge the cap or eviscerateprogram components as operational components can
no longer be cut and maintain the district operations.~ Upstate suburban superintendent
The lack of cuts to administration is not because ofexcess administrators, it is because we have onePrincipal in the elementary school, a middle schoolPrincipal that is also the CSE (committee on specialeducation) chair and one HS Principal. There are noother central office administrators besides the
superintendent, so there is no place to cut. With theincreased requirements under 3012-c (teacher/
principal evaluations), it will be difficult at best tocomplete the new requirements.~ Upstate suburban superintendent
Because of the massive layoffs required to pass the2011-12 budget, the board decided to exceed the taxlevy limit in our first budget vote. We did not pass. Wereduced to the tax levy limit, and passed on the secondvote. The entire process was contentious funding reduc-tions and somewhat divisive. We need some sort of"consideration" from our teachers unit, but have yet toreceive it. This is harming our ability to gain community
support for our budget. As a superintendent, my salaryhas been frozen for the fourth year, I am paying more
for my health insurance, I have a smaller administra-tive team with which to work, and I am having a hardtime keeping people motivated and positive partic-ularly given the rapid pace of change in regulations
from NYSED. As a small rural district, we do not have thecapacity that other districts do, and our effectiveness is
slowly being eroded as a result of funding reductions.~ Upstate rural superintendent
In my opinion we are out of magic. We have eliminatedover 51 positions through attrition over the past three
years. We have closed 2 schools. We have doubled ourappropriated fund balance and will be under the 4%allowable amount. We have squeezed all that can be
squeezed. We do not spend anywhere what we need for
technology. We are postponing capital projects. Wehave kept spending under 1% and the levy increaseunder 2% for each of the three past years. My salary hasbeen frozen twice and the administrators have made
serious concessions. However, CSEA and NYSUTemployee costs ---and they are 90% of our work force---continue to increase well in excess of 2% per year.~ Upstate rural superintendent
We are experiencing an increase in enrollment but areconstrained in the addition of teaching and student sup-
port positions because of the tax cap and the currenteconomic situation. Our classes and our programs areat capacity and I am really concerned because myhonest assessment is that we are stretching people and
programs too far.~ Upstate suburban superintendent
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Adapting to the tax levy capDistricts developed and adopted their budgets
under the states new property tax levy cap law for the
first time this past spring.
Actual proposed budget figures and our survey
responses point to the same conclusion: the cap led
districts to propose lower spending and tax increases
than would have occurred under the old rules.
In the first round of voting, districts proposed
budgets with spending increases averaging 1.7
percent and tax increases averaging 2.2 percent.
Budget vote day brought the second highest known
approval rate 96.5 percent12, including 99 percent
of districts proposing increases within their levy limit.
Almost two-thirds of the districts attempting to
over-ride their levy limit were successful in obtainingthe 60 percent of voters needed for approval.
Ultimately, only two districts were required to
adopt a contingency budget, with no increase in tax
levy over the prior year, as required by the new law.
Assessing the impact
For the state as a whole, 67 percent of
superintendents said that the tax levy cap had led
their districts to adopt budgets with spending levels
below what would have been done without the cap.
Included in that share were 17 percent ofsuperintendents who described their districts
adopted spending level as significantly lower.
Asked to appraise how the tax levy cap affected
programs and services, 60 percent said it caused their
adopted budget to have either a somewhat more
negative impact (50 percent), or significantly more
negative impact (10 percent) than would have
occurred without the cap.
Impact by region
Looking at the perceived impact of the tax levy cap
by region, it is hard to identify patterns. With some
reflection, however, it becomes apparent that there
are multiple considerations which might interact to
affect how the cap would influence budget impact.
12 The highest pass rate was 97.3 percent in 2009; theState Education Department has figures going back to1969.
Poorer districts tend to be more heavily
dependent on state aid for two reasons. First, state
aid does have progressive elements which direct
greater revenue per pupil to poorer districts. Second,
they have less property wealth to tax with identical
tax rates, a poor district will raise less local revenue
than a wealthy district.
So local taxes typically comprise a larger share of
total revenues for wealthy districts, suggesting they
would be more likely to ascribe budget impacts to the
tax levy cap. But even with a tax increase within the
levy limit, a wealthier district will raise more revenue
than a poor district levying at the same rate.
Further, rich or poor, local political considerations
also affect judgments about how large a tax increase
taxpayers might support. Last, while exemptions
from the cap might allow districts a higher tax levylimit, many local leaders ruled out seeking increases
greater than 2 percent, believing their voters would
apply that widely cited number as a benchmark.
Among regions, superintendents in the Lower
Hudson Valley, with the greatest property wealth per
pupil, ascribed the least impact on spending levels to
the cap. Perhaps their ability to raise relatively
larger sums at any given tax rate cushioned the
impact of the tax levy cap.
On the other hand, the North Country, with manylow wealth districts, had a high rate of perceived
impact on spending. This may reflect the limited
sums many of these districts can raise at any tax rate.
There were similar results for these two regions on
the questions about how the tax levy cap affected
programs and services.
0% 20% 40% 60% 80% 100%
Total
Long Island
Lower Hudson Valley
Mid-Hudson Valley
Capital Region
Mohawk ValleyCentral New York
North Country
Southern Tier
Finger Lakes
Western New York
Impact of tax cap on bu dgeted spending levels
Somewhat lower Significantly lower
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0% 20% 40% 60% 80% 100%
Total
Long Island
Lower Hudson ValleyMid-Hudson Valley
Capital RegionMohawk Valley
Central New York
North Country
Southern Tier
Finger LakesWestern New York
Impact of tax cap on programs and services
Somewhat negative Significantly negative
Though often cited as a model, Massachusettss
tax levy cap is more generous to local governments
and schools than New Yorks version. Massachusetts
communities may increase their tax levy by up to 2.5
percent without seeking voter approval, and may
over-ride that cap with a simple majority of voters.
New Yorks lawforbids schools any increase in taxlevy without approval by at least a simple majority of
voters, and requires 60 percent of voters to over-ride.
Yet although Massachusettss law is more
favorable to local governments, one study13 concluded
it had more adversely affected poor communities
they were less likely to attempt over-rides and less
likely to succeed when they did try. THE COUNCILs
analysis of past school district budget votes suggests
similar risks high need small city and suburban
districts seem likely to have the greatest difficulty
winning over-ride votes. But with so few unsuc-
cessful votes this year, it is not yet possible to draw
reliable conclusions about future over-ride prospects.
As a group, high need rural districts proposed the
lowest tax increases, made the least use of exemp-
tions, and were least likely to attempt over-rides.
13 "Hidden consequences: Lessons from Massachusettsfor states considering a property tax cap." Center onBudget and Policy Priorities, 25 May 2010. Web. 27Sept. 2012.
Tax levy cap impact on collective bargaining
Some tax levy cap proponents described it as a
blunt instrument which would force state officials
to get serious about enacting mandate relief, and
compel local leaders to manage more efficiently and
negotiate more aggressively with employee unions.
Our survey asked superintendents for their
impression of how the tax levy cap might affect
collective bargaining with their local teacher union.
We singled out teacher unions and did not inquire
about other employee categories in order to limit the
overall length of the survey, and because teacher
compensation is the largest expense in virtually every
district budget.
Statewide, 59 percent of superintendents said that
they thought that the tax levy cap increased the
likelihood that their district would be able to
negotiate a cost saving concession with their teacher
union, or that it had already contributed to achieving
savings. Thirty-one percent thought the cap would
not affect the prospects for negotiating cost savings,
while 10 percent said doing so was not a priority. A
superintendent might give the latter answer if the
district had previously negotiated savings, or if it is
believed that its teacher compensation is not
competitive.
In response to our invitation for open-ended
comments, a couple superintendents said that the tax
cap had had a negative impact on bargaining
prospects.
2012-13 Tax levy decisions by SED Need/Resource Category
Need/Resource Capacity Category
Proposed
Tax Increase
Proposed Tax
Levy as % of
Levy Limit
% Attempting
Tax Cap
Over-Rides
High Need Small Cities and Suburbs 2.2% 99.4% 6.5%
High Need Rural 1.8% 97.9% 5.8%
Average Need 2.1% 99.4% 8.6%
Low Need 2.4% 99.7% 7.5%
TOTAL STATE 2.2% 99.4% 7.6%
SOURCE: Council analysis of NYSED Property Tax Report Card and budget vote data
31%
10%
40%
5%
15%
0% 1 0% 20% 30% 40% 50%
No impact
Negotiating savings nota priority now
Somewhat more like ly
Significantly more likely
Alr eady contributed tonegotiating savings
Perceived impact of tax cap onchances of negotiating cost-savingswith teacher union
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In their own words: Contemplating the Tax CapWe may be able to go on for three more years onlywithout additional funding. A two percent increase
yearly only nets us a little over 40 thousand dollars.~ Upstate rural superintendent
The impact of the tax cap was softened this year by thesavings from a significant number of teacher retire-ments in response to an incentive. We expect to face anongoing imbalance in expenses vs. revenue after this
year.~ Upstate suburban superintendent
Significant fund balance and reserves were used to getto the 2% tax levy increase. We chose to stay at 2% eventhough our allowable increase was 3.8%. The feedbackwe were getting was that anything over 2% wouldn't
pass due to the large amount of publicity of the 2% andmisunderstandings around this idea.~ Upstate city superintendent
The tax cap has achieved its intended result - which wasto curtail the salaries and benefits to employees. Longterm consequences of this have yet to be determined.Class sizes are "creeping up" - while still manageable,may be a problem within two or three years ~ Downstate suburban superintendent
Poor rural districts could never balance a budget ormake up for lost state aid through an increase of thelocal tax levy. We have been near or under 2% for years.
~ Upstate rural superintendent
Community assumption - no more than 2% tax levyincrease. We feared a defeated budget if we raised it toour limit, about 8%.~ Upstate rural superintendent
This year, the tax cap was near our traditional offeringto the public. At $33,000 per 1% of the levy, the tax caphas minimal impact with a passed budget under the caplevel. We do have concerns if a budget goes tocontingency...~ Upstate rural superintendent
We are entering a second year without a teachers' andadministrators' contact and the tax cap is notrecognized at the table as a concern on their part.~ Downstate suburban superintendent
Our teachers union does not want to hear anythingabout the tax levy limit- they believe that either we
sho