Contingency budgets face stark limits for 2010-11

Public school officials warn voters every year that if they vote down the budget, a contingency budget will be adopted that could eliminate or reduce equipment purchases and free community use of buildings.

But the warnings usually are hollow: the state's formula for school budgets — using the U.S. Consumer Price Index — has in the past allowed contingency budgets to almost mirror defeated budgets because the index has risen most years.

Not this year. The index declined from 3.8 percent in 2008 to minus 0.4 percent in 2009. That means contingency budget constraints will be tighter than usual, and school districts will have to face making reductions in programs, staffing and equipment purchases if budgets are defeated.

"This is the first time in a long time that the CPI has been a negative number or zero; it's always been a little bit of an increase year to year," said Barbara O. Greene, director of finance for the Jefferson-Lewis Board of Cooperative Educational Services.

"It will become challenging for schools."

If a district's budget is voted down, the district can put the budget up for another vote or adopt a contingency budget immediately. In some years, a higher consumer price index allowed districts — if they wanted — to produce a contingency budget that was larger than the defeated budget.

The option is not there this year, and superintendents are considering what they would have to do if voters reject their budgets.

"When you have to make cutbacks, you try to look at things that don't directly affect kids, like equipment purchases," Indian River Central School District Superintendent James Kettrick said. "And if you have to start taking a look at personnel, you have to make sure you take care of the core areas."

By law, spending categories that are safe from cuts in a contingency budget include debt service, capital construction projects and expenses relating to a court order.

But areas district officials can cut include student supplies, new equipment purchases, community use of buildings and raises for noninstructional employees who are not union members.

"You've got to scrutinize things across the board so all of your cuts don't come from one area," Mr. Kettrick said. "It's quite a balancing act to get to the number you're required to be at."

School board members usually look at all expenses individually to make those judgments, Sackets Harbor Central School District Superintendent Frederick E. Hall Jr. said.

But this year, because of Gov. David A. Paterson's proposed state aid cuts, the original budgets that districts put up for a vote may be under the contingency cap to begin with, Mr. Hall said.

"I think you're going to see some original budgets that are very close in nature to the contingency budget cap," Mr. Hall said. "This year, no one has room to leave in any luxury items."

A district's contingency budget will either be 4 percent more than the previous year's budget, or 120 percent of the Consumer Price Index increase for the year, whichever is less.

This year, because the 2009 index was negative, contingency budgets won't be any bigger than the previous year's budget. Mr. Paterson's executive budget proposal says that school districts can round the minus 0.4 index to 0.

School district budget votes will take place May 18.