Financial trouble looms as Smithtown adopts budget

Financial trouble looms as Smithtown adopts budget

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Superintendent James Grossane file photo

District administration fears financial “doom and gloom” might be on the horizon for the Smithtown school district.

The Smithtown board of education voted unanimously to adopt Superintendent James Grossane’s proposed $236,027,619 budget for the 2016-17 school year at a meeting Tuesday.

Thanks to a full restoration of the Gap Elimination Adjustment, which was enacted six years ago in an effort to close a state budget deficit by deducting funds from each school district’s state aid allotment, the budget includes some additional expenditures for 2016-17, despite what could be a perfect storm of financial stress for the district.

That decision added approximately $3.2 million in revenue to Smithtown’s budget for the upcoming school year. However, both Grossane and Andrew Tobin, the district’s assistant superintendent for finance and operations, said they are concerned that will be the final increase in state aid they will receive for the foreseeable future.

“The reality is, where is the future aid going to come from?” Tobin said during the board of education meeting Tuesday. “We know foundation aid historically has been directed to high-need districts, not to districts such as Smithtown. So we’re concerned, just like we were with the [Gap Elimination Adjustment] that we’ll be last in line to get future foundation aid increases. That’s the general concern going forward, that we might be solely reliant on tax levy revenue to help out our budgets going forward.”

In addition, the district benefitted during this budget season from a relatively low pension payment requirement, a perk that can’t be counted on every year. Grossane said he’s bracing for the possibility of a negative tax levy increase cap at some point in the coming years, because the district has a $2 million bond from the early 2000s coming off the books. That will result in an equal reduction to both expenses and revenue, though it will impact the tax levy increase cap. The district will look to rebuild their depleted capital reserve funds to address building repairs at multiple schools that have been neglected.

“These are all realities, and when they’re going to happen, we’re not sure,” Grossane said. “Hopefully never, but they are happening [to other districts in the state]. We can’t say that they’re not. It is very important, as we plan for the future, that we keep those things in mind.”

School board trustee Grace Plourde spoke Tuesday about the years leading up to the enactment of the state-mandated cap on tax levy increases in 2011.

“In the years running up to the tax cap, we had members of the board of education, who are no longer here, whose view was basically that anytime a school district put a little money in the bank, that was akin to theft,” Plourde said. “So they turned the district’s piggy bank upside down and shook it.”

Plourde also spoke about state laws that incentivize school district residents to vote against budgets that pierce the tax levy increase cap as well as limits on unassigned fund balance.

“It’s a little frustrating that every place we try to look to head off a problem, to prevent the day where we are going to have to make deep and painful cuts in program — like we’ve had to do in the past when we’ve had budget crises — every time we try to put a little money away or to do something to head off a crisis like that, we are thwarted by the state of New York,” she said.

The adopted budget will distribute money received from the restoration of the Gap Elimination Adjustment to one-time expenditures for 2016-17, rather than using it on programs that require yearly funding. Those expenditures include elementary and secondary staff development for teachers in STEM (science, technology, engineering and mathematics) curriculum and investment in materials to help that development.

The board of education voted to close one of the district’s eight elementary schools for the 2017-18 school year as a cost-saving method in February. Parents against the closure spoke during the meeting in the hopes of convincing the board of education to reverse that decision in light of the unexpected spike in state aid for 2016-17. District administration and members of the board of education gave no indication that they would reconsider the closure.

The vote to approve the 2016-17 adopted budget is on May 17.