Could bus and ferry fare kill school budget? Board of Ed seeks a solution to new mandate

JULIE LANE PHOTO Board of Education President Thomas Graffagnino explains why a $70,000 item that may not be spent could still force the district to pierce the tax cap.

JULIE LANE PHOTO Board of Education President Thomas Graffagnino explains why a $70,000 item that may not be spent could still force the district to pierce the tax cap.

A $70,000 line item in the proposed school budget for bus and ferry transportation, based on estimates from South Ferry and Sunrise Buses,  for two elementary school students who attend classes at Our Lady of the Hamptons may never have to be paid, but by state law must be included for the 2017-18 school year pending the outcome of a referendum.

Including the funding would likely force the district to go beyond the state-mandated tax rate cap for the second successive year.

Two parents last year asked for the transportation, but since Our Lady of the Hamptons is one mile outside of the 15-mile radius requiring the district to provide busing, the school board had no plans to add the costs to the budget. Although the district already transports students to the Ross School and Hayground School, both within the state imposed minimum 15-mile radius, the timing for that bus wouldn’t work for Our Lady of the Hamptons, forcing the need for a second bus.

While the Board of Education referred to the request coming from two parents, Our Lady of the Hamptons prinicpal, Sister Kathy, said nine students from Shelter Island are currently attending the Southampton-based school and she expects there will be 13 in September.

She also said there could be more since she has heard from parents interested in sending their children to Our Lady of the Hamptons if bus transportation is provided.

The parents of the parochial school students succeeded in getting 35 signatures on a petition to require the district to submit their request to a public referendum that will be on the May ballot.

Twenty-five valid signatures are needed to bring about a referendum, according to the district’s business official, Tim Laube.

“We represent taxpayers but these people had the right to petition,” said Thomas Graffagnino, the board president.

The proposition may not pass muster with voters in May, but New York State requires the Board of Education to include the $70,000 cost in its overall budget to ensure funds are available should the referendum succeed, Mr. Laube said.

There are three ways to account for that money:
• Take $70,000 from the fund balance so it won’t affect school taxes
• Tax for the expense to avoid further depleting the fund balance
• Cut programs on the Shelter Island campus to make up for the potential transportation spending.

Although the district doesn’t yet have a firm percentage from New York State for the amount it’s allowed to  increase spending for the 2017-18 school year without piercing the tax rate cap, the first two option is expected to do just that, Mr. Laube said. The second would hit the fund balance that would eventually have to be replenished by raising taxes. The third option, cutting programs now to avoid going beyond the cap, would be a bitter pill to swallow, board members said.

So are the other options, they said. Piercing the tax rate cap results in having to win voter approval by at least 60 percent, not the usual 50 percent.

Since the cap was imposed, the district has gone beyond it only once, and that was for the current $10.8 million budget that surpassed the 60 percent mark by only two votes.

Mr. Laube and Superintendent Leonard Skuggevik have been determined to avoid piercing the cap for next year. Based on preliminary figures, they may have succeeded, but with the additional $70,000 allocation, they’re looking at a preliminary budget total of $11.3 million.

The board likely would allocate money from its fund balance and return it if the transportation referendum failed, Mr. Laube said. But even so, that expenditure would hit the budget every year going forward and eventually taxes would have to be raised to rebuild the fund balance.

What’s more, if the referendum passes, the district would have to provide transportation to any school within the new 16-mile radius. That $70,000 could also increase if either the cost of the bus run or the ferry fare were to increase.

Continuing to take money to pay for the extra bus and ferry costs from the fund balance would deplete it so within a few years it would have to be replenished from added taxes. The district is allowed to maintain up to 4 percent of its budget in that fund to meet unanticipated expenses.

“It really is a financial burden,” board Vice President Linda Eklund said, adding, “I just don’t think New York State had that in their minds” for places like Shelter Island, where ferrry fares double the cost.

“It’s just another unfunded mandate,” Mr. Skuggevik said.

At the next budget workshop on March 20, board members will continue to wrestle with options and examine the budget for possible cuts. But no one expressed optimism that the board could find $70,000 worth of cuts needed to keep from piercing the tax rate cap despite Mr. Graffagnino’s statement Wednesday morning that he is determined to avoid doing so.