The day of reckoning for school districts is almost here and it may turn into a long, cold night.
"You're going to start seeing huge amounts of people coming to board meetings saying 'What's going on?' " said Richard G. Timbs, executive director of the Statewide School Finance Consortium. "Well, they just ran out of money."
Last year, districts cut costs, used reserve funds and federal jobs money, and gained some union concessions to deal with a $1.3 billion reduction in state aid.
If it was bad last year, it's worse this year.
Federal jobs money is gone, most district reserves are low or running out, there is not enough state aid to keep up with recent cuts, and mandates like pension payments continue to rise.
Forget about going to property owners to make up the difference. New York's tax cap makes it difficult to raise taxes.
"As we know, property taxes in New York, in particular upstate New York, are some of the highest in the nation, so the tax cap was really an effort to slow that growth," said Elizabeth Lynam, director of studies for the Citizens Budget Commission, a statewide nonprofit.
The tax cap, which was pushed by Senate Republicans and became a campaign pledge for Gov. Andrew M. Cuomo, was intended to slow that growth.
>Staying below the cap
The tax cap is different for each school district due to the state formula applied. For many it is in the range of 3 percent, although Cheektowaga-Sloan's is 1.1 percent. A budget with a tax levy higher than the cap requires the approval of 60 percent of voters in a public vote, instead of a simple majority (50 percent plus one vote).
If voters defeat the budget twice, the new budget freezes taxes for the following year, a prospect not many districts want to chance.
So school districts are cutting to stay below the cap.
This year's reckoning has produced startling conversations as districts throughout Western New York try to grapple with reality.
"You are going to see a ton of districts move toward educational and fiscal insolvency," said Timbs, who is the former district superintendent of Erie 2-Chautauqua-Cattaraugus BOCES. "You can't lay off the same person more than once. You can't cut the same program more than once."
Teachers and staff in Amherst and Sloan agreed to freeze their salaries and step increases next year to save hundreds of thousands of dollars -- and jobs.
"The problem is of course, this is a structural issue. We're bying a year," Sloan Superintendent James P. Mazgajewski said.
He told his staff that if nothing changes, "we would last two years and then we wouldn't have any money to run our schools."
Kenmore-Town of Tonawanda is looking to eliminate 30 to 40 support staff. With a $9 million budget gap left to fill, School Superintendent Mark P. Mondanaro said he has no alternative but to increase class sizes.
Niagara Wheatfield has proposed cutting $8.35 million, which includes cutting 65 staff members and all modified sports, increasing class sizes and negotiating wage concessions.
Olean plans to close two elementary schools and may shutter two more in the future to help reduce a $3.4 million budget gap.
Clarence, which eliminated 40 staff positions for this year, is looking to cut two dozen to three dozen more staff members next year.
"It's definitely the most difficult budget cycle I've seen," Clarence Superintendent Geoffrey Hicks said.
Hicks knew it was coming, and the district had its first budget forum in November. Seventy-five people showed up, and attendance swelled to 400 at the last budget session.
"You need to let people know the information you have as fast as you can have it," he said.
Information from budget sessions is put online immediately, he said, and questions are answered at the next session. Comments and suggestions are posted on the district's website as well, making the community part of the process as the district decides how to protect its core programs.
Clarence is not just looking at cutting staff, but also hoping to share transportation and buildings-and-grounds administrators with the Akron School District.
>Cuts to programs
Many school districts laid off teachers and staff, increased class sizes and cut treasured programs last year.
Orchard Park reduced extracurricular and sports programs and cut 37 positions last year, while taxes went up 5 percent.
This year's budget looks better because of cost-saving measures in energy and health care. The district would have to cut $328,000 from its first draft to meet its tax cap.
It is a sign of the times that cutting $300,000 is seen as a "good" year. Superintendent Matthew McGarrity said this year's budget is a function of the painful reductions the district made last year. There may be more to come next year, while "we're trying to live through that pain from last year," he said.
"The actual budget dilemma will continue for another couple years," predicts Erie 1 BOCES Superintendent Donald Ogilvie, "until we get predictability and reliability of revenues coming out of the state, and until districts determine a sustainable level of programming and staffing."
Superintendents present program-neutral or rollover budgets that fund all current programs, then go through numerous drafts pecking away at expenses until a final version is presented. Nothing is final until the state budget is passed and aid is known.
"You're creating budget scenarios as opposed to creating budgets," Ogilvie said.
West Seneca schools had an easier year last year than many districts, with no layoffs. Savings through renegotiation of contracts, changes to bus runs and reductions in staff through attrition left programs relatively intact. But that won't last forever.
"We've been pretty fortunate compared to other districts, because we haven't had massive layoffs," said Treasurer Brian Schulz.
Still, the district has lost about 10 percent of its work force the past few years through attrition.
He said he is striving to find the level of spending that matches the district's resources, which will not support all the programs they have in the past.
"It's no longer a budget crisis; it's a condition we have to find a solution to," Schulz said.
The "condition" in New York State includes property taxes, driven primarily by school taxes, that have consistently ranked among the highest in the nation. When property taxes are measured against median home value, nine of the nation's highest taxed counties were located in New York -- led by Monroe (2.89 percent) and Niagara (2.87 percent), according to the Tax Foundation, a low-tax advocacy group in Washington. Erie County was sixth at 2.60 percent, the tax group said.
Administrators and school board members in the Lancaster School District have begun tackling the preliminary budget for the 2012-13 school year, a task made more difficult by the expiration of a $1.7 million federal stimulus grant.
"I think, like with every district, it will bring its challenges. But it's something we need to live with, so we're going to make it work," said Jamie Phillips, assistant superintendent of business and support services.
Districts are trying to find the right mix of reductions, and it's not easy.
East Aurora administrators proposed a slew of sports-related cuts totaling $32,278. Chief among them is elimination of boys varsity volleyball and modified boys and girls basketball and soccer.
"This is offensive, because we're arbitrarily slicing and cutting," Board Member Stephen Zagrobelny said. "The reality is there's no more money left here to find This nickel-and-diming over sports and extra-curricular activities is just going to ruin that middle and high school experience."
The day of reckoning -- budget voting day -- is May 15.
But a bleak outlook might not translate to budget failures. Last year, an overwhelming majority of budgets statewide -- more than 93 percent -- passed. Only five in Western New York were defeated.
Lynam expects the same this year, but she wonders if the growing awareness of the cap will bring out more taxpayers.
"People have been a little more charged up. They're a little more aware of the tax-cap issue. There may be a little more turnout of people who don't have students in the district," Lynam said. "It's going to be interesting."
News Staff Reporters Stephen T. Watson, Jay Rey and Karen Robinson contributed to this report.