School districts all over New York State are going financially bankrupt. How did this happen? This talks about the funding side. In the early 2000s, New York State education funding was given more or less on a per student basis. A new agreement went into place in 2007 that gave more importance to a district's own ability to pay for an education. If a district didn't have as much property wealth and/or income earning potential, it got much more funding. Budgets became better for poorer, rural districts like the ones in Chautauqua County.
Then the stock market collapsed in 2008. The smart people on Wall Street quickly realized that if they weren't making any money, they certainly didn't owe New York State any taxes. Unfortunately for New York State, Wall Street had been contributing 20 percent of the entire New York State budget. New York had a huge cash crunch.
By 2010, New York State came up with the Gap Elimination Adjustment. It meant that there was a gap in the New York State budget, and Albany was going to eliminate it by adjusting the funding it was giving to all downstream counties, towns, villages and schools. For poor rural school districts like Westfield - and Brocton and Chautauqua Lake - that had been getting 2/3 of its school funding from New York State, it meant losing $1 million out of a $15 million budget. The GEA has not gone away, asking each school to make up that million dollar difference each year. Given that Gov. Cuomo recently was in DC, hat in hand, asking for $45 billion for Superstorm Sandy relief, I don't see New York State restoring education funding to where it was for quite a few years.
The other third of funding for local school districts has been from local taxpayers. As we know, all schools and local municipalities are now under a tax cap. This limits the rate that Westfield Academy and Central School can raise revenue to about 2 percent - plus or minus adjustments - each year. This is nominally $100,000 per year. Given the restrictions on both the state and local sides, your local school board no longer has significant control over the income side of the budget.
So, state funding is down $1 million and local funding is capped. This has happened faster than contracts can be negotiated to reduce the spending side. This is a structural deficit. Until spending and funding can be brought into balance, schools are going broke. To plug the gap, schools have used federal stimulus money, spent savings dedicated to other purposes and cut programming. Only cutting our kid's education options gets the budget into balance right now. Unfortunately reducing class offerings is not what you want to do if your organization has school in its name. A merger is a way to help school's funding side. More on that later.
The views expressed here are my own, not of the Westfield Academy and Central School Board of Education.
WACS Board of Education member