McGowan pushes for end to Gap Elimination Adjustment
TUPPER LAKE – Tupper Lake Central School District Superintendent Seth McGowan is asking local government officials to help him urge Gov. Andrew Cuomo to nix the state’s Gap Elimination Adjustment.
Tupper Lake is not alone. School districts across the state have been struggling to balance rising costs with reduced state aid since the GEA was enacted in 2010 by Gov. David Patterson’s administration. Legislators said the GEA was implemented to close the gap between the state’s anticipated revenue and its expenses by reducing aid to school districts statewide.
McGowan presented a letter to village board members during their Tuesday night meeting that called for the elimination of the GEA. The letter was written by school board members and sent to several senators and Cuomo.
McGowan wants to send another round of letters to the same people and asked the village board to pass a resolution supporting it. He said he will ask the Tupper Lake and Piercefield town boards to do the same. The village board responded by unanimously passing a resolution to back the letter.
“What I’ve heard from Sen. Betty Little and Assemblywoman Janet Duprey is that the more organizations within the community that can request their eliminating the GEA, the more chance we have of succeeding in doing that,” McGowan said. “If we were to be successful in this campaign, not only would the school be able to stay under the tax cap, but it would also be able to restore some of the fund balance we’ve eliminated over the past few years.”
McGowan reminded the board that a recent state comptroller’s report listed Tupper Lake as the 12th most fiscally stressed school district in the state.
“That’s solely related to the GEA,” McGowan said. “As that tax cap stays in place and our funding decreases, it’s created this busting point.”
Last week, eight people attended a special meeting at L.P. Quinn Elementary School to discuss the Tupper Lake school district’s budget.
Financial consultant Chuck Bastian, who is with the law office of Bernard Donegan, explained that the GEA has cost the Tupper Lake school district almost $2 million since its inception. Last year the state gave the district $406,000 to replace some of that money. Gov. Andrew Cuomo’s proposed state budget includes a $124,000 increase to the district’s aid.
“That’s great, but they still owe us $1,454,000,” Bastian said. “This coming year, with this (budget) proposal for 2014 to 2015, the governor’s going to give us $530,000, so it looks like we’re getting an aid increase of $124,000, but we’re still in the hole $900,000. It might be a little less of a shortchange from prior years, but it’s still shortchanging us.”
Bastian said the big question is, “When is Cuomo going to do away with this and make these schools whole, and maybe give them an increase?”
“Cuomo’s kind of set a new normal, and what happens in the meantime is we start having fiscal stress,” Bastian said.
Bastian projected $16.1 million in revenue and about $17 million in expenses for the next school year, leaving a $900,000 deficit. He said some of that difference could come from the district’s $1.5 million fund balance, which will be left over at the end of the 2013 school year.
Even though the district could use its reserved funds to close that gap, Bastian warned that depleting it further would put the district in a dangerous place for future budgets. If nothing changes, Bastian projected that the district will have about $159,000 in its fund balance at the end of the 2015-16 school year.
“Next year you’ll need $1.3 million, and you’ll only have $159,000 to balance that budget,” Bastian said. “It’s not going to work. Something’s got to give.”
Bastian told attendees at the special meeting that one way to raise money is to exceed the state-mandated tax cap. He said some schools also opt to cut kindergarten and bussing in an effort to save money.
“We’re not locked into that tax cap,” Bastian said. “You can go to a 100 percent levy increase if the voters are behind it. If they’re going to give us more state aid and we have these costs going forward, somehow we either start cutting other things or we go higher on that levy.”
The school board must come up with its tax cap number by March 1. District Business Manager Garry Lanthier said the board has already decided not to exceed it.
McGowan said the district is instead looking at ways to consolidate resources, like personnel and maintenance departments, with other Tri-Lakes districts. There are limits to what can be consolidated, though.
“We’re not looking at consolidating the children, but at other aspects like business office operations and sharing other services with other school districts,” McGowan said. “When they talk about consolidation in the Capital Region, those districts are 5 miles apart. We have the largest geographical region of any school district in the state, so shipping kids from one district to another is not really practical.”
There will be another budget hearing in May, followed by the budget vote on May 20.
Contact Shaun Kittle at 891-2600 ext. 25 or firstname.lastname@example.org.