Schools dip into leftover money

Voters will go to the polls today to decide the fate of school budgets.

With the persistent increase in operating costs and the national recession, many schools have had to dip heavily into a rainy-day well, known as a fund balance, in an effort to keep property taxes low.

Fund balances, essentially the money left over from the previous year once all of the bills are paid and revenues are in, are being depleted in many school districts. That money can be spent for a wide range of districts needs; a portion often is put toward the coming budget as a way to reduce the tax levy.

This year, schools have increased the amount of fund balance money they are putting toward their budgets, but school officials say they still think their finances are in good shape for years to come.

David K. Albert, director of communications and research for the New York State School Boards Association, said this year many school districts across the state are committing more of their fund balances to their proposed 2009-10 budgets.

"It does appear to be a trend," Mr. Albert said. "Obviously there is a lot of concern statewide about what the economic picture is going to be in the next few years."

This year, Carthage Central School District is putting $2 million from its fund balance toward the budget, leaving about $100,000.

"If we didn't put fund balance toward the budget, that would have to fall onto the tax levy, because we have no other resources for income and we certainly don't want to hit the taxpayers if we can help it," Carthage Business Manager Amy Marrocco said.

Mrs. Marrocco said the district has spent less than it expected to this year and more revenues have come in.

"I'm just as confident that we will have that amount or more fall out of the 2008-09 budget and we'll be able to carry that over to put back into our fund balance," she said. "We've been tightening our belt and praying every night that our revenues will come in as expected and we will underspend."

The Indian River Central School District is putting almost $10 million of its fund balance toward the 2009-10 budget. It will have about $2.7 million left.

"We've been very mindful of the economic situation and I think we've built a budget that's fair to our taxpayers," district Business Manager James R. Koch said. "We have a lot of reserve positions built in that we may not fill, and I think we will have a healthy fund balance next year. We have a budget that looks at all the potentials for growth and gives us a lot of flexibility."

Sackets Harbor Central School District Superintendent Frederick E. Hall said he has been mindful of how much fund balance is put into the budget so the district can match that amount in years to come.

"We always have to be mindful of the amount of fund balance we use because we have to make sure we have enough for the following year," he said. "It becomes part of the revenue in our budget and if we don't have it in the following year, it has to come from somewhere else — state aid or local share."

Sackets Harbor is putting $250,000 of its $500,000 fund balance toward the budget.

In Beaver River, the budget uses about $2 million of the district's fund balance, up from $1.5 million this year. That increase, along with some cost-cutting measures, allows for a stable tax levy, district officials said.

With that increased usage, the remaining fund balance is projected to drop to $668,960.

With costs expected to keep rising, budget development could wind up even more challenging next year, Superintendent Leueen Smithling said.

"We intend to be just as frugal next year," she said.

In the Potsdam Central School District, officials are using $660,000 of a $1 million fund balance. Superintendent Patrick H. Brady said he does not want the district to deplete the entire fund balance because "the recession is not over."

"There are strong indications that school districts will face even greater budget difficulties over the next couple of years," Mr. Brady said. "As it is with families who have been able to save for a 'rainy day,' it will be those school districts which have a positive fund balance that will be able to weather such a financial storm."

Times staff writers Steve Virkler and Alex Jacobs contributed to this report.