School budgets held up by high energy costs

With the district projecting a 20 percent increase in energy costs for the 2006-2007 school year, state mandated spending limits may force program cuts.

By: Donna Lukiw
   School officials are waiting to create the budget for school year 2006-2007, hoping for some relief while caught between the "rock" of mandated spending caps and the "hard place" caused by dramatically higher energy costs.
   Business Administrator Richard Reilly said the district has not been advised of the cap for this year — the amount the budget can increase as set by the state.
   Under the legislation known as S-1701, districts are limited to amount of spending for costs not associated with additional students that can be added each year. For the last two years, districts were limited to 2 percent increases as set by the state, based on the rate of inflation.
   But with the district projecting a 20 percent increase in energy costs for the 2006-2007 school year, the cap may force program cuts if set too low.
   "It doesn’t appear that the state will give us any relief," Mr. Reilly said. "About two-thirds of the budget are salaries and insurance. We don’t know what we will cut."
   Mr. Reilly said during the 2004-2005 school year the district spent under $300,000 on natural gas and electrical bills, but the district has projected a 10 percent increase this year
   Mr. Reilly said he is waiting to hear from the state to determine how much will be spent on energy next school year.
   "We have to see what the bids are for our natural gas," Mr. Reilly said. "They’ve been basing the cap on the CPI (consumer price index) but we don’t know if that’s the case this year. We have no idea."
   Consumer Price Index refers to the average annual increase, expressed as a decimal, during the year preceding the schools’ pre-budget year as reported by the U.S. Department of Labor.
   The district must have a budget set by the end of February, which will be put before voters on April 18.
   "From what we understand, the election date is April 18 and the preliminary budget must be approved by the state before March 28," Mr. Reilly said. "The board should approve it by the end of February."
   Meanwhile, pressure is building in Trenton for action on the school caps.
   On Dec. 9, the Assembly Education Committee released a bill that would have given schools greater flexibility to handle spikes in gasoline and heating fuel costs — but it was not passed.
   The bill would have provided a budget cap adjustment for energy costs —specifically motor fuels and heating.