Fiscal Health of the District & 2020-2021 Budget Outlook
The Cortland Enlarged City School District strives to provide a rich and engaging educational environment while being fiscally responsible. Each year, balancing the budget gets increasingly more difficult due to the following reasons:
- Increases in health care costs
- Contractual obligations
- Large increases in out of district placements
In addition to the increase in expenditures listed above, the District has used its reserves or “savings” to close the gap between revenues and expenditures since the 2015-2016 school year. Due to the continued use of our savings in this way, Cortland has been deemed one of the five districts to be in “moderate stress” by the NYS Comptroller. This is not a designation we wish to have moving forward, however our future financial situation continues to be a challenge.
Operating costs are exceeding our revenue and our savings accounts are getting depleted. Our revenues are made up of 60% state aid and 35.4% property taxes -- that state aid amount is determined by a NYS formula that is out of our control. For small city school districts like Cortland, state aid is not keeping pace with the increase in expenses.
The tax levy limit determines the amount schools can raise their taxes. We are projecting that our tax levy limit will be 1%. Our Board of Education does not want to go out to taxpayers and ask to surpass the tax cap. The five year average tax increase has been 1.23%.
Each year we have been depleting our savings accounts to pay for our operating expenses. For example, in 2015-2016 school year, we allocated $5 million dollars from our savings to balance the budget. In 2017-2018 we allocated $2.3 million and in 2019-2020 with the two elementary schools closing we were able to reduce this allocation to $764,000. Had we not closed both schools we would have needed to allocate $3 million from our savings. Like with any savings account, our reserves are being depleted due to our annual allocations to balance our expenses with revenues. The goal of the 2020-2021 school year is that we again reduce our allocation of reserves.
We will be looking at retirements closely- and may not be backfilling positions. We will be looking at the number of sections of each class and ensure our master schedule is balancing classes and will continue to look at our programming and decrease cost where it will least affect students. By making these difficult decisions the ultimate goal of having a fiscally healthy school district can be achieved.