A series of factors — including rising health care costs, increased enrollment and the continued lack of increased state aid — are making for an unpleasant 2017/18 budget scenario for the South Orange-Maplewood School District.
During a preliminary budget presentation at the February 27 Board of Education meeting, District Business Administrator Paul Roth took Board members through projected revenues and costs, with costs coming out ahead. (See Roth’s full slide presentation below.)
Staying within the state-mandated 2% cap on tax levy increases, the district is looking at total revenue of $128.164 million and costs of about $130.5 million. In this scenario, costs for the 2017/18 school year would outstrip revenues by $2,368,663.
Should the Board choose to use all of its banked cap of $1,475,575 (taxing power that has been “banked” in previous years) that difference reduces to $893,088 — still a daunting deficit. The tax levy impact of a budget using the full banked cap would be a 3.39% increase, according to Roth.
Roth noted that the estimates are based on state aid numbers remaining the same from 2016/17 (approximately $4.3 million). Roth said that the state aid numbers should be revealed to the district by March 2. Village Green has reached out to the district for the state aid number but has not yet received a response.
Roth described how the new zero-based budgeting process had helped the administration closely calculate needs and resources for the 2017/18 school year. The final appropriations are based on 743.6 full-time employees, maintaining existing services and providing for “increases in purchase services, utilities, employee benefits, transportation, and tuition.” Earlier in the meeting, Superintendent John Ramos said that the budget was being crafted in coordination with the Strategic Plan process.
Roth reminded the Board that the presentation was not yet a final proposed budget, noting that “discussions are continuing to go deeper and come up with recommendations and items for restructuring the balance of the budget.” Roth said that recommendations would be discussed at a March 7 Budget Workshop to take place at 7 p.m. at Montrose School.
During discussion, Board 2nd Vice President Madhu Pai asked for a clarification. “I want to make sure everyone is aware of where we are,” said Pai. She then asked Roth, “Even if we were to use all of our taxing authority … we would still have a $900,000 gap. Is that correct?”
“Unfortunately, that is correct,” said Roth.
Responding to a question by Board of Ed student rep Filip Saulean asking how underfunded the district was vis-a-vis state aid, Board President Elizabeth Baker said that she recently attended a presentation by the Education Law Center that reported that every district in Essex County is currently underfunded. Baker said that, according to ELC, the South Orange-Maplewood School District would have received almost double the funding it is currently receiving under the state funding formula that was abandoned during the first year of the Christie administration due to a budget crisis. That funding has never been fully restored.
Watch video of Roth’s presentation and the Board discussion here. The presentation begins around the 37:00 mark.