A complicated state aid picture has pros and cons for Cobleskill-Richmondville’s 2018-19 budget.
Governor Andrew Cuomo’s proposed state budget shows a slight increase in foundation aid, the main source of state assistance, but C-R is also losing building aid for a 2003 project still being paid off, which strains the upcoming budget.
And at the same time, another Cuomo proposal may cause financial strife.
Released last week, the Governor’s preliminary budget shows C-R getting nearly $300,000 more in foundation aid next year, an increase of two percent.
“Despite a $4 billion deficit [in the state budget], I’m encouraged that the Governor added funding to education,” C-R Superintendent Carl Mummenthey said.
State aid for the 2003 project, which included the geothermal field and the Shelter Building renovation, ended last year. C-R still has three more years of that debt but no aid to pay it.
C-R owes $1.2 million on the 2003 project this year. The projected $300,000 aid increase offsets some of that, but C-R still faces an overall loss in aid of $900,000.
This is not a surprise, however. School officials knew the three-year gap between paying off the debt without aid was coming.
“We’ve been preparing for this,” Mr. Mummenthey said.
The district will use $750,000 plus money from savings to cover the costs.
“We’ve talked with our auditors and financial experts, and this is the best way other than a massive tax increase, which we are not going to do,” Mr. Mummenthey said.
Mr. Cuomo’s other aid proposal may be more troubling next year and in the future if it becomes formal policy.
The Governor recommends capping expense-driven aid, which is funding districts receive for such costs as transportation, BOCES aid, special education and others.
Districts pay for those items one year, then receive a percentage of the cost back from the state the next year.
The Governor is proposing to cap increases at two percent.
C-R receives 79 percent aid on transportation costs, and Mr. Mummenthey gave this example:
If the district spends $1 million on transportation one year, it will receive $790,000––79 percent––from the state the next year.
But under the Governor’s proposal, if C-R spends $2 million on transportation that next year, it will receive only $790,000 plus two percent of that amount––$15,800.
Under the current system, C-R would receive $1.58 million of the $2 million back, not just $15,800.
Transportation, BOCES services and special ed costs fluctuate from year to year, as gas prices change and the need for services varies.
Because of those variations, the aid is expense driven, depending on what districts spend from year to year.
Mr. Mummenthey recognizes that the state is trying to save money, but he’s concerned about the impact.
“A two-percent cap could be catastrophic,” he said. “These costs are so volatile. . .we’d either have to raise more money or cut services.”
He hopes the legislature doesn’t enact the Governor’s proposal immediately but decides to study it instead.