Very small increases in state aid could cause the Schoharie school tax levy to rise more than six percent in each of the next four years, officials said last week.
Board members were given the less than pretty numbers as part of a five-year financial forecast Wednesday night.
Despite steep decreases in the last 10 years, student enrollment could increase over the next five years while state aid may increase only slightly, Superintendent Brian Sherman and business administrator Bob Bonaker said.
In addition to costs rising because of more students, expenditures may also increase over the next five years in the areas of health insurance and teacher and employee retirement, officials said.
Rising costs and relatively flat state aid could cause the tax levy to rise more than six percent in each of the next four years.
The tax levy is currently $8.46 million but with state aid remaining at $9.47 million for next year, the tax levy could rise by $581,000 or 6.9 percent for the 2011-12, Mr. Sherman said.
With only a modest state aid hike for the 2012-13 school year, the levy could again increase by $588,000 or 6.5 percent.
The tax levies for 2013-14 could increase by 6.7 percent, while the levy for 2014-15 could increase by 6.2 percent. The levy increase for 2015-16 could be 6.3 percent, officials said.
These increases of over six percent per year are despite maintaining costs with a “roll over” budget that will see spending going up by around three percent a year.
“It’s not a pretty picture,” Mr. Bonaker said.
There has been no indication of increases coming in state aid, he said, as well as no indications or less aid, “but who knows.”
Officials have been told there might be a mid-year state aid cut this school year.
There are many variables that will affect the tax levy in the next five years but some costs are almost certain to increase, officials said.
Health insurance and prescription costs are expected to rise by seven to 11 percent per year over the next five years.
Teacher retirement costs are currently 8.6 percent but are expected to go to 11.5 percent next year and may double in the next few years.
Employee retirement costs are currently 11.9 percent and are expected to go to 16.3 percent next year and also may double in the next few years, officials said.
Staffing levels are expected to stay about the same in the next five years unless there is a significant increase in student enrollment.
Enrollment is both schools is currently 916 with 458 in the elementary school, 438 in the high school and 20 out-of-district students.
Estimates based on school censuses and other factors, projects a drop of 908 next year and 907 for 2012-13 but an increase to 919 in 2013-14, 930 in 2014-15 and 948 in 2015-16.
Projections show a decrease in the high school but a large increase in the elementary school of more than 100 students.
Mr. Bonaker said it may be a stretch to see an increase of 100 in the elementary school but the recent kindergarten classes have been bigger.
Even with a “rollover budget,” spending could climb from the $19.89 million to more than $23.78 million in five years.
Spending, officials said, could increase by $546,000, a hike of 2.75 percent, next year to $20.4 million. Spending could increase by an average of three to four percent each year through 2015-16.
State aid, unfortunately, will not make up for the spending hike and the tax levy increases will be higher than the spending hikes.
After no extra state aid next year, officials see an increase of only $80,000 for 2012-13, and hike of about $100,000 for the remaining years.
It used to be easy to do a five-year forecast, Mr. Bonaker said, when the district could count on state aid increases.
One bright spot could be that the district could get $400,000 in federal Job Act during the next school year, funds that could be used to hire back some of the nine people that were laid off this year.
The recovery from “The Great Recession,” along with uncertainty about state aid hinders a long-range analysis, Mr. Sherman said.