The 2023-24 school budget cycle is in full swing, and at least one local school district — Sag Harbor — has proposed a preliminary budget with a tax-levy increase that doesn’t rise to the maximum allowed by New York State.
According to Jennifer Buscemi, Sag Harbor’s business administrator, this is unusual because most school districts tend to go right up to their allowable increases. But it’s not unusual for Sag Harbor, which has been a few percentage points under the maximum almost every year since the tax-cap legislation took effect in 2012.
For 2023-24, Ms. Buscemi said Sag Harbor could have imposed a 4.16-percent tax-levy increase, when real estate growth and other factors specific to this district are taken into consideration. Instead, a 2-percent increase is proposed. And, if school board members’ comments during their meeting Monday night were any indication, the final increase could be even lower.
The news Monday was doubly good: New York State Gov. Kathy Hochul’s education budget is showing an approximately 10-percent bump in state funding for Sag Harbor. It won’t be set in stone until April, though, when the state legislature approves its final budget.
The district is currently proposing a 2023-24 budget of $48.18 million, a number that’s also not yet set in stone. The associated tax levy — what the district collects from its residents — is proposed at $42.16 million, an increase of 2 percent. The rest of the money would come from New York State, tuition from out-of-district students, transportation contracts with other school districts, grants, and a few other sources.
Budget-to-budget, the $48.18 million plan would carry a spending increase of approximately $2.18 million, or 4.75 percent, over the current year’s $45.99 million budget. Driving the increase is a significant jump in the cost of salaries and benefits for employees; inflation of utilities, professional services, and supplies; higher-than-usual interest rates on short-term borrowing; the purchase of a new work truck for the facilities crew, replacing one from 2008, and $300,000 for bathroom renovations at Pierson Middle and High School.
“We do have rhyme or reason for every single budget increase that we have,” Ms. Buscemi said.
Administrators are anticipating taking in more tuition revenue next year — up to $2 million, an increase of $500,000 — from out-of-district students, placed either by the Sagaponack and Wainscott School Districts or by the students’ parents, on a tuition-paying basis. Because this year’s nonresident tuition revenue is significantly exceeding projections, Sag Harbor is expecting a surplus of at least $900,000, which means there’s a comfortable margin to grow reserve accounts or apply unspent money to offset next year’s tax burden. The latter is known as the “unassigned, unrestricted fund balance.” New York State also has rules about how much fund balance districts can hold onto, so it also works in a district’s favor procedurally to use surplus money this way.
Sag Harbor is also looking to add a separate proposition to the May 16 budget ballot: the creation of a new reserve account dedicated to security and technology expenses, not to exceed $10 million, which would enable the district to set aside some of its year-end surplus money for future needs in those areas. A majority of voters would need to say “yes” to the creation of this kind of reserve, and would have to approve future spending from it, too.
In the area of state money, Sag Harbor received just over $2 million from state coffers this year, including, for the first time, a universal prekindergarten grant. Governor Hochul’s proposed budget would increase state aid by as much as 10 percent, up to about $2.23 million.
Alex Kriegsman, a Sag Harbor School Board member, asked Ms. Buscemi to show future budget options for 1-percent and 1.5-percent tax-levy increases, in addition to the 2-percent option she discussed on Monday.
The school board has until Wednesday, April 19, to finalize its 2023-24 spending plan. The budget vote and school board elections are on Tuesday, May 16. Sag Harbor’s next budget workshop is Monday, March 6, at 6:30 p.m.