MINERVA — Minerva Central School faces an uncertain, perhaps even terminal, future.
Like other districts in the North Country, the district is feeling the crunch of rising mandates paired with decreasing state aid and a lack of an expandable tax base, a deadly combo that may force the community to take drastic measures to ensure that they still have a school after the clouds clear.
“We’re running out of time,” said Minerva Central School superintendent Tim Farrell after a grim school board meeting on Thursday, March 13 to discuss the future of the district and its 125 students. “We’re trying to maneuver through this financial storm the best we can.”
As the details of the 2014-15 school budget start to emerge, Farrell and the board have arrived at a tentative number at what it will cost to run the school next year, about $5.2 million.
Like other public school districts, roughly half of the district’s budget is derived from state aid and the other half comes from property taxes.
In the past, the gap between those revenue streams and what was needed to run the school was filled in by state aid. But that aid has been slashed away and MCS, according to numbers crunched by this reporter based on last’s year’s budget paired with the increase in projected state mandates, now faces a significant shortfall of about $580,000.
Meet the GEA, the bane of North Country educators.
The Gap Elimination Adjustment (GEA) is a device designed in 2010 by Gov. David Paterson to help the state eliminate a $10 billion deficit. Since then, the deficit has been eliminated but the GEA remains in place.
Every year, the state includes the GEA in the budget. Each year, it siphons away state aid to schools. And each year, educators lobby state representatives to repeal it — or at least chip away at it.
Additional stressors on school districts include a rise in health insurance premiums, benefit increases, rising energy costs and the property tax cap, which is currently locked at a tad under two percent.
“Our financial picture started to change between four and five years ago,” said Farrell. “Some years, that loss amounted to a quarter-million out of a $5 million budget. We’re using reserves as a stopgap, but we don’t know how long we can hold on.”
Since the GEA’s implementation, MCS has lost nearly $850,000.
Last year was the worst yet, said Farrell.
For the 2013-2014 budget, the district cut $300,000 to stay afloat. The district lost some half-time employees — including a pre-k teacher and physical education teachers — and reduced some elective programs.
Districts can lean on their fund balance as a survival float, but those funds are not self-replenishing.
The district’s fund balance — accumulated monies that act as a shock absorber against unexpected expenses or revenue shortfalls that could cause an operating deficit — is now critical and will likely be depleted by the end of the upcoming budget year.
At the state level, North Country lawmakers are unified in calling for a repeal of the GEA.
Assemblyman Dan Stec, a co-sponsor of legislation that would have eliminated the GEA for fiscally distressed school districts in 2014 and phased out the GEA for all other school districts over the next two years, said the total number of funds kicked back over the schools would have to be about $700 million.
“The GEA was the most disappointing item in the Governor’s budget proposal this past January,” Stec told the News Enterprise in a phone call in between budget negotiations in Albany. “Myself, Assemblywoman Janet Duprey and State Senator Betty Little are all in agreement that the GEA is really bad for our schools and we need a more aggressive timeline to wrap it up.”
While school officials don’t anticipate a full reinstatement of the gap this year, said Stec, they have arrived at a figure somewhere between $400-$500 million to keep them float.
The exact number will not be made public until the final state budget is hashed out before the end of the month.
In Albany on Thursday, March 20, 59 people were arrested outside of Little’s office in a non-violent protest against a panoply of issues, including the GEA.
“The past few years have been very challenging and I understand the frustration of parents, teachers and school administrators,” Little told the News Enterprise in an email message. “When Democrats controlled the Senate and Assembly, they enacted this budget-cutting measure that has impacted rural schools much more than urban ones. It created a big hole.”
Little said the state senate has been adding funding each year to fill the deficit.
“Our budget proposal includes $541 million for the GEA, $217 million more than the Governor’s proposal and $174 million more than the Assembly’s plan,” she said. “With work continuing on the budget, I continue to advocate that the state address the gap as quickly as possible. Ideally, it should be eliminated altogether, but there are lawmakers from other parts of the state who don’t share that priority.”
In Minerva, the next budget workshop is scheduled for Thursday, March 27.
Farrell said this when the board will start making the tough decisions: What to cut, how much to cut and if the district will ask the voters for a tax hike.
Last May, voters opted against an 8.93 percent tax increase, a decision that would have exceeded the allowable levy limit and required a 60 percent voter approval. At a second vote the following month, they approved a 2.97 percent increase, which was 1 percent below the allowable levy limit.
“Another supermajority vote would be risky,” said Farrell. “I can't say strongly enough that I understand tax levy increases are not popular: people have limited incomes and they don’t want to be taxed anymore than they have to.”
The school’s target date to hash out the final budget is Thursday, April 10.
Farrell provided the board a list of items under consideration for removal.
“We can only cut so far and still have a quality program,” he said. “It’s easy to cut on paper, but not so easy to maintain the programs with proper support that students need to be successful.”
In the past half-decade, the district has cut academic programs, including physical education, elementary reading and driver’s ed, slashed away at non-instructional staff like aides and janitorial staff and held the line at upgrading their facilities and supply cachets.
A local grassroots group, Minerva CARES, has sprouted from the crisis to raise awareness and lobby officials in Albany.
“The situation is very critical and it’s frustrating,” said Sue Montgomery-Corey, a group member. “The school has followed all mandates and tried to play by the rules — we’re getting seriously hurt and it’s very sad.”
“The state ending GEA would be giving us money they already owe us,” said Danae Tucker, a concerned parent and Minerva CARES member. “The school has really struggled to see what they can cut without compromising the students. I hope the community will stand behind the kids — the school is the heart of the community and it needs to be here. Keeping the kids here, and not tuitioning them out to another district, is top priority.”
Farrell said it might come to that:
“If we couldn’t provide the standards of quality, that may be a possibility,” he said. “But I hope we would never have to go that far.”
“Minerva should really be commended,” said Stec. “They’ve done an outstanding job with their outreach. They’ve been very proactive and advocacy can only help. Sometimes the squeaky wheel gets the oil — and that’ll make Albany take another look.”