Now that a proposed merger with Southampton has failed a second time, Tuckahoe School officials say they can get through the 2015-16 school year—but there is a pressing need to find a way to keep the district financially solvent in the long term.
While district officials are looking at a variety of options, including agreements or mergers with larger nearby districts, there is another, more drastic option available. Although it is not being seriously considered at the moment, Tuckahoe officials have talked with the State Education Department about the option of dissolving the district, then paying tuition to send all of its students, from kindergarten through high school, to other districts.
Superintendent Chris Dyer said this week that the district is doing what it can to ensure that it does not become economically unsustainable, although rising pension, health insurance and benefit costs, coupled with salaries and tuition, will make it impossible to remain under a state-imposed cap on tax levy increases for much longer.
Mr. Dyer said district officials have been in talks with the State Education Department to review options, and that moving the district to “non-operating” status has been discussed, though he stressed that it is not currently on the table.
“We cannot survive fiscally in the long term,” Mr. Dyer said. “The issue now is how long do you want to operate with lacking quality programs if we cannot keep up with costs.”
According to Jeanne Beattie of the State Education Department, a school district cannot declare bankruptcy in New York—the state will step in before that happens. One option would be for the district to be converted into a non-operating school district, without any staff and with the school building closed. Tax money collected from residents would be used to pay tuition for all of the district’s students to attend school in neighboring districts.
Ms. Beattie emphasized that the state cannot force a district into such a status—a local referendum would be required to prove any such proposal.
Tuckahoe officials continue to hope that new state legislation will facilitate a merger with the Southampton School District in the future. Mr. Dyer noted that if the Tuckahoe and Southampton districts decide to consider a merger one more time, the districts would not need to fund a new merger study and start from scratch, but would have to simply update the current study with new financial information to keep it relevant.
The district is already working on a spending plan for the 2015-16 school year, and a draft was presented to the School Board late last month. However, even with savings in the past years from tuition exclusivity deals with the Southampton School District, tuition represents roughly 27 percent of the budget, totaling almost $3.5 million. Mr. Dyer said that percentage is not likely to change anytime soon.
“We are working on the budget, and we are looking to the 2015-16 school year to take our savings from the last two years and roll those forward,” Mr. Dyer said. “We are hoping to be able to look at our enrollment numbers and get firm projections for our future, and continue with current staffing and education programs we have had in the past.”
For the 2014-15 school year, Tuckahoe voters approved a $18,795,860 budget and a tax levy of $16,855,1182. The district estimated a tax rate of 7.4 percent per $1,000 of assessed valuation, meaning the owner of a house valued at $500,000 pays approximately $3,700 in school taxes this year.
When creating the budget for the current school year, board officials utilized $600,000 in reserve funds, and another $134,549 from the district’s unemployment reserve fund, to help offset costs for taxpayers.
“For the long term, we cannot afford for such a large portion of our budget to be paid to tuition when it is going up at a rate that exceeds our ability to gain revenues,” Mr. Dyer said. “If your expenses exceed your ability to raise revenues, then you have negative net cash flows. That is the situation we are in now, with tuition contributing largely to that, but it is not the only issue.”
Although tuition is not the only expenditure for the district—which must also field rising costs in health care, salaries and benefits—it is the only cost with some local control, Mr. Dyer said—even if it’s Southampton that exercises most of that control.
As of October, Tuckahoe officials said the district has $16 million in assets, including $3 million in reserves and $13 million in other assets. The district currently has $486,000 worth of debt.
Mr. Dyer predicts that the district will not have to pierce the tax levy cap for 2015-16. That will change, he estimates, by 2016-17.
“You can be educationally responsible but be a burden to the taxpayers, and we do not want to do that,” he said. “This is why we pushed the benefits of a merger.”
Erin McKinley on Dec 10, 2014