The purpose of this document is to provide the ASI-Brighton reader with a basic understanding of school budgets. School budgets are complicated. However, with school expenditures as the largest component of your property tax bill, every Brighton resident should have a basic understanding of these budgets.
THE SCHOOL BUDGET - A SPENDING PLAN
First, the school budget presented to the residents reflects a SPENDING plan for the next school year. The revenue needed to support the spending will be discussed later in this document.
The budget increase is NOT the same as the tax increase. They are two different values. Again, this will be discussed later.
The operating budget is presented to the residents in broad categories that combine dollars in a manner that makes understanding and analysis difficult.
For example: The Brighton operating budget includes a General Support category, a Personnel category and a Benefits category.
General Support includes some salaries and benefits. The Personnel category does not include all personnel.
The public does not see the actual amounts spent as compared to the budgeted amounts. For example: If $1 million is a forecasted budget amount, and $950,000 was actually spent during the year, the $50,000 “left-over” is not reported to the Brighton residents.
SALARY and BENEFITS EFFECT
Approximately 75% of every school budget is salaries and benefits. These two items obviously drive the budget far more than any other expense category.
Salaries and benefits are CONTRACTUAL. They are NOT mandated. The administration and school board meet with the various unions and agree on the salaries and benefits for the next contract period. This is a CRITICAL fact that every Brighton resident must understand.
The contract period is normally two or three years. If the contract is for three years, then the budget increase is effectively set for three years since 75% of the budget is salaries and benefits.
The Teacher Union contact is normally the model for the Administrator contract. The “better” the Teacher Union contract, the “better” the Administrator contact. The administrators negotiate with the Teacher Union. One could argue that this situation is clearly a conflict of interest.
RESERVE FUNDS
In addition to the forecasted expenses, there are Reserve Funds. These funds are like savings accounts that are setup with voter approval for a specific purpose.
A typical Reserve Fund could be established to pay for anticipated capital expenses such as a new roof. The money for these funds often is derived from the money “left-over” when the forecasted expenditures are less than anticipated.
The Brighton residents also do not see the balance in these Reserve Funds. And the balances can be in the millions of dollars.
One Brighton Reserve Fund is for Technology. Brighton uses $500,000 annually from this fund, with voter approval, for technology expenditures. However, the operating budget also includes very substantial amounts for technology. The residents are only told that $500,000 from this Reserve Fund is being spent on technology.
REVENUE
The revenue to meet the expense forecast is derived from the following sources:
- Sales Tax
- Investment Income
- Rentals
- Other
- Fund Balance
- And the BIGGY….New York State Aid To Education
Then, subtracting all of the above items results in a balance that must be paid by the Property Tax Levy.
Unfortunately, NYS Aid to Education comes from your NYS taxes. The higher the NYS Aid (your NYS taxes), the lower your local school property tax.
This also means that the school budget (spending) can increase while your property tax increase is held to an “acceptable” level. As an example: The school budget could increase by 6% while the tax increase may be held to 3%….depending on NYS Aid.
But remember, you are paying for NYS Aid through your NYS taxes. So you pay property taxes to the school district and income taxes to NYS. NYS returns a portion of your income taxes to the school district as School Aid.
The formula used to determine how much aid each district receives from the total State aid amount is a very complicated subject in itself.
SUMMARY
- The budget is a spending plan
- Salary and benefits comprise 75% of any school budget
- Salaries and benefits are contractual…not mandated
- Teacher salaries and benefits are negotiated by the Administration
- The Administrators’ salary and benefit increase generally follows the teachers
- Reserve Funds are not presented in the budget information
- NY State Aid has a major effect on the local property tax increase
- You pay for NY State Aid through your income taxes
