Massena school district facing a deficit for at least the next half-decade
Friday, March 7, 2014 - 2:38 pm


MASSENA -- Finance committee chairman Loren Fountaine told the Board of Education during Thursday night's finance committee meeting that unless state aid goes up or the district can find ways to save or cut spending, they will be operating at a deficit for at least the next five years.

A speadsheet he prepared for the board shows the district is projected to end the year at a $1.7 million shortfall, which he believes will rise to $3.9 million for 2015-2016. The numbers are based on the governor's proposed budget, which doesn't include enough funding to close the budget gap.

The finance chairman said raising taxes aren't an option to make ends meet.

"We would have to raise taxes significantly to close the gap … it wouldn't be a realistic venture," according to Fountaine.

They are allowed to increase taxes this year by 1.5 percent, which will net $206,577 more than last year for the school coffers.

Although the district has upwards of $20 million in reserve funds, Fountaine's numbers show it will be dry by 2018-2019, even with cuts totaling $5.5 million. He noted that a portion of the fund balance is in restricted funds - they can't just take it out to make up a budget shortfall.

In addition to insufficient state aid, the district is grappling with a plethora of rising costs. They include state retirement payments, social security, contractual raises, natural gas and BOCES payments.

Fountaine outlined a number of potential strategies for their battle against bankruptcy. First, he said they should continue to push for the legislature to get rid of the gap elimination adjustment (GEA). First instituted in 2010-2011, the GEA took funding from school districts to make up for the state's budget deficit.

Earlier in the meeting, the board passed a resolution urging lawmakers in Albany to give the district its funding back. According to the document, the district has lost $7,952,922 over the last four years.

“We’ve got to operate on the premise that none of these things are coming,” board member Kevin Peretta said.

He also offered as strategies reducing staffing and programs and "using fund balance and reserves in a responsible manner."

At the next meeting, the board will have three scenarios to review for next year's budget - using $2, $3 and $4 million in fund reserves, respectively.

“Hopefully [at the April 3 board meeting] we’re going to have something hard in front of us to look at,” Fountaine said.

Board member Leonard Matthews suggested they bring in an outside consultant. He praised the work of Massena Central’s business department and said a fresh set of eyes can be useful.

“Many times they find money that is owed to you from the government. They take a percentage, but its yours,” Matthews said.

“We’ve got to plan for the worst and hope for the best,” Peretta said.