For the past few years, the Middletown School District has only appeared to to use its fund balance reserve to offset higher taxes. Although it has applied from about 4.8-5.2 million dollars for each budget year, these funds were immediately replenished by monies collected by a tax levy surplus and/or from the state aid package. State Education Law section 1318 limits the size of the tax levy surplus to 4% of the upcoming school year budget. Currently, in the Middletown school district, this amount is approximately 3.7 million dollars.
Let's illustrate how this process works. According to the district's June 30,2010 auditor report, for the 2010-2011 school year, the district had approximately 16.8 million dollars in its unreserved fund balance. Approximately 4.8 million form the reserve fund was applied to the 2010-2011 school year budget. This left about 12 million dollars in fund balance. As of March 2011, according to Sate Comptroller, this reserve fund had been replenished by 4 million dollars, and contained about 16 million dollars. This amount is sixth largest fund balance in the state.
During the same time period, using the excuse of a $400,000 shortfall in state aid, the district eliminated 26 position, and raised taxes by about 12% in some parts of the district. Clearly, the first priority of the district is the preservation of its fund balance and not employee retention nor lower taxes.
Currently, in the proposed 2011-2012 year budget, the district has proposed to apply approximately 5.0 million dollars from the reserve fund balance, cut 97 positions, and have a 7.99% tax levy increase. If the same priorities hold, we can expect a replenishment of reserve funds at the expense of both employees and taxpayers.
The administration has justified its position for maintaining a large fund balance in order to keep its high bond rating, and as a reserve for paying tax certiorari. According to their records, although they claim that the district has 25 million dollars in potential tax certiorai, they paid out only about 1.27 million dollars in the 09/10 school year, and a similar proportional amount this year to date. We must ask: If the district is so concerned about its 25 million dollars in potential tax certiorari, why did they start construction on a new 67 million dollar elementary school? The administration can not have it both ways.
In the May vote, the voter needs to decide whether or not they will support a large increase in taxes, and massive employee cuts. The district needs to do more than make a show of its use of its fund balance, and should use part of its reserves to maintain its workforce and lower taxes.
Vote No On The Proposed Budget!
