Budget season has started in West Islip and the board of education will need to decide how to close a $2 million gap seen in the initial draft spending plan for the 2013-14 school year.
During his initial budget presentation Wednesday night, Superintendent Richard Simon outlined a draft budget proposal totaling $116.6 million, an increase of nearly $6 million over the 2012-13 school year.
The draft budget’s total includes a combination of state aid, miscellaneous revenue, use of fund balance and the draft tax levy. However, the draft tax levy is $79.4 million, which is nearly $2 million above the $77.4 million tax levy the school district can legally secure under the tax levy cap, resulting in the current budget gap.
According to Simon, three factors account for most of the increase in expenses: pension costs, up $2.4 million; salaries, up $2 million; and employee benefits, up $800,000.
“We have more than 800 employees,” he said. “When pension costs go up, that is a significant amount of money.”
While some costs are rising significantly, the school district is also seeing some costs savings and modest increases in revenue such as state aid.
Simon noted that the retirement of 18 teachers at the end of the current school year will lead to savings of $1 million. In addition, since seven of those positions will not be filled as of now, the district will realize additional savings of $400,000.
In terms of state aid, initial figures show West Islip could receive an additional $574,000, according to a presentation by Wendy Duffy, assistant superintendent for business.
This year, the school district will also have more leeway with the tax cap. While the 2 percent figure is widely discussed, a number of factors allowed under state law put West Islip’s cap number this year at 3.8 percent.
Should the board of education choose to raise taxes to the tax levy cap limit, the average annual increase for homeowners would be $300.
The challenge now facing board of education trustees and administrators is solving the resulting $2 million gap between the draft budget and the amount of revenue the district will receive when combining state aid, local property taxes and other sources, which could go higher.
During the budget hearing, Trustee George Smith raised concerns over using $500,000 from the fund balance to pay for recurring costs. Should the board of education decide to eliminate that proposal, the budget gap would grow by an addition half-million dollars.
The next budget work session is Wednesday, March 6, 7:30 p.m. at Beach Street Middle School.
Revenue Summary (information from presentation by Wendy Duffy, assistant superintendent for business)Draft Expense Budget $116,590,369 State Aid (as of 1/23/13) $30,544,198 Miscellaneous Revenue $3,671,040 Use of Fund Balance $2,920,305 Draft Tax Levy $79,454,826 Less: Tax Levy Limit -$77,459,542 Draft Tax Levy Over Levy Limit (budget gap) $1,995,284