Recommendation is to apply saved $1 million toward district’s debt service, thereby reducing taxes
By John Tredrea, Staff Writer
Spending controls put in place during the past two months by Interim Superintendent Thomas F. Butler are expected to generate approximately $1 million by year’s end, enabling officials to apply those savings toward tax relief in next year’s budget, Hopewell Valley school district spokeswoman JoAnn Meyer said Tuesday.
. “Last December, the superintendent told department heads and principals to limit their spending to essential purchases for the remainder of this school year,” Ms. Meyer said.
”Dr. Butler had hoped that the mid-year belt-tightening would help offset an expected loss of state aid.”
”I really credit the principals and department heads for holding the line, especially since they understand we are building a budget for next year that will cut their spending by 15 percent of their budget this year,” Dr. Butler said of the response to his directive.
Ms. Meyer said school district Business Administrator/Board Secretary Robert Colavita told the school board Monday night his recommendation is to apply the saved $1 million toward the district’s debt service, thereby reducing taxes. Mr. Colavita, however, cautioned the board that the strategy would require district officials to squeeze another $1 million from next year’s budget or risk a significantly higher debt service payment in 2010-2011.
This year, the district’s debt service obligation is $4.9 million. If the savings is used for debt service, the bill next year would be $3.9 million, reducing the increase in the local tax levy to 2.3 percent.
The uncertainty over the amount of state aid for next year has made construction of a 2009-2010 budget even more difficult, local school officials say. Rolling the current year’s operation forward, with no changes to existing programs, services or staffing levels, was estimated to put the district over the state cap by $2 million.
Ms. Meyer said that, together with the school board’s Finance Committee, Dr. Butler and Mr. Colavita have been working to close the $2 million gap. On Monday, they told the full school board they have succeeded. The 15 percent across-the-board cut of department and individual school budgets saved $950,000 alone. The rest of the savings came from transportation efficiencies, lower projected costs for health insurance, flat projections of energy costs and retirements, Ms. Meyer said.
Also on Monday, Ms. Meyer said, Finance Chairman Jim Wulf said President Barack Obama has pledged to make education funding a key component of his economic stimulus package, which, as of press time, was still working its way through Congress. Mr. Wulf said he would like to see any additional federal set aside as capital reserves. Mr. Wulf, Ms. Meyer noted, has been a “vocal advocate for creative funding to chip away at the prioritized list of capital projects” identified earlier this year by the board’s ad hoc referendum committee. That group had tagged 11 projects throughout the district — from replacing boilers at Toll Gate Grammar and Hopewell Elementary to a new addition at Bear Tavern Elementary School — as needing attention in the near future. Citing the national economic downturn, the board agreed to postpone a facilities referendum for the time being.
The board’s Finance Committee and administration are continuing to review the proposed spending plan and intend to present a tentative budget to the full board at its March 16 meeting.