Where is SWR headed?
Answers not clear on what the district will do in response to failed budget, proposition
2 comments below
More than a week after the Shoreham-Wading River School District's proposed 2009-10 budget and health and safety proposition both failed, there was still no indication of what direction the district and Board of Education planned to take in response as our press deadline passed.
However, there were a few ideas brewing about the district's options.
The proposed $56.1 million budget was turned down by a more-than-750-vote margin May 19, which board members and community members say was a means voters used to express their dissatisfaction with an upcoming 27 percent tax levy increase.
In April, the board voted to not borrow additional money to mitigate the tax levy increase, which arose after a two-year tax freeze, but instead take it all at once, citing an uncertain economic future.
The district must pay $11.4 million it borrowed against $35.8 million in prior years' state aid by June 30, and the district will only be receiving $6 million of the $10 million in prior years' state aid money it had expected to receive this year.
This leaves a $3.9 million revenue hole in the district's budget, after a $1.5 million payment the district will receive in BOCES aid is factored in. The board will be renewing the loan for $3.9 million, which will come due in June 2010.
Board president Michael Fucito and vice president Scott Ericson did not respond to requests for comment as to what the board planned to do in response to the failed budget or health and safety proposition. Board member Bob Alcorn said he wasn't sure, because the board had not met yet. The next meeting is scheduled for June 2.
As of presstime Thursday, the board has not asked for a revote. The board has until May 29, the date of publication of this article, to do so.
If the board does not ask for a revote on the budget, the district will go to a contingency budget, which would cut funding for supplies, equipment and certain maintenance and capital projects.
Local legislators have a few ideas on how to get the district out of its predicament.
Sen. Ken LaValle (R-Port Jefferson) said he is revisiting the concept of the district's borrowing against the remainder of the prior years' state aid money via the state-owned municipal bond bank agency, an idea brought forward during the 2006-07 school year but abandoned in 2008 in because the board felt the terms of borrowing were too risky. Instead, the board opted to borrow against anticipated state payments via short-term revenue anticipation notes.
Mr. LaValle said he, the district and the board are looking to see if there was a misunderstanding about the municipal bond bank agency's terms of borrowing.
"We are now, as we speak, trying to button down and make sure that the prior concerns the district had are not concerns, that it was either a miscommunication or misinterpretation dealing with their ability to be able to bond in the future," he said.
If the district were to borrow the remaining $22 million it is owed in prior years' state aid via the MBBA, the money would first be used first to pay off existing debt, then to mitigate the tax spike, and finally, any remaining money could be used for things such as capital projects.
John Hopkins, a Wading River resident and member of the district's financial review committee, said he is in favor of Mr. LaValle's idea. He also reiterated the financial review committee's recommendation it originally gave to the board, which was that the board should borrow money to mitigate the 27 percent tax levy spike and instead increase the tax levy gradually over the next few years. Mr. Hopkins said borrowing the money from the MBBA is a good idea -- it is not as risky as the board has indicated and the money could be used to set up a reserve for tax remediation that would hold the annual tax levy increase to 4 percent. The district would still have roughly $7 million left over for capital projects, he said.
Mr. LaValle, Congressman Tim Bishop (D-Southampton) and Assemblyman Marc Alessi (D-Shoreham) are also trying a different route to helping the district.
The three legislators have all written or spoke to the state education department asking it to intervene for the district. One of the stipulations of the state's using federal stimulus money, Mr. Alessi said, is that the state couldn't cut its aid to schools. Their argument is that cutting the district's prior years' state aid claim is a violation of that, and they're trying to get the $3.9 million to be paid to the district.
"We all have to pull together to try to avoid this 27 percent tax spike," Mr. Alessi said.
Once the short-term crisis is fixed, he added, "we need to take a longer-term look at these schools and the condition they're in. Shoreham has a long and proud tradition of giving top-notch education to its students ... I don't want to see that slide."
asnyder@northshoresun.com
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2 comments found
school 2 : 6/13/2009
Jack...maybe you do not know the District is owed $60 million in prior State Aid. And maybe you did not hear that the District receives half of what our neighboring Districts receive This would not be a bailout. You really should do your homework before you make foolish comments...
school : 5/29/2009
New York State should not bail out Shoreham. Firstly, it starts a bad precedent of giving monies to districts which have been mis-managed for years. For years Shoreham Schools lived high on the hog while every other district paid higher taxes. Now it their turn to pay.
