How much of the total budget is tied to employee salaries and benefits?

Employee compensation and benefits have constituted 75% of the Burnt Hills-Ballston Lake annual budget for a number of years. What schools do is provide a host of services to children, so education is a very staff-intensive business. Unlike many businesses that must allocate funds for raw materials or inventory, BH-BL parents send us our “inventory” of students ready-made, and our budget consists primarily of the cost of the services we provide to them.

For instance, if you group all the costs directly related to each type of service (for staffing, supplies, equipment, etc.), the current year’s budget of $53,428,188 breaks down as follows: Instruction 67.2%, other pupil services (library, athletics, guidance & health) 6.1%, debt service 7.4%, transportation 6.0%, building operation & maintenance 6.0%, utilities & general insurance 4.2%, and central support 3.1%.

Why not just freeze all salaries? Is it possible to have at least temporary salary decreases to help save jobs and programs?

No, at least not unilaterally. The school district is exploring all avenues to reduce expenses for 2011-12, but it does not have the legal ability to freeze salaries of staff members covered by a collective bargaining contract. Almost all of our employees are covered by a public employee contract with a bargaining unit, such as CSEA, the BH-BL Administrators Association, or the BH-BL Teachers Association. State laws protect these bargaining units from arbitrary, non-negotiated reductions or changes in the terms and conditions of employment.

An important part of understanding how costs rise is that many years ago the state Legislature enacted what is called the “Triborough Amendment,” which guarantees the continuation of benefits and wages after a negotiated contract has expired if a successor contract is not yet in place. Public unions were granted this right in exchange for their giving up the right to strike. The Triborough Amendment means that under the law a public employee automatically moves forward on a salary schedule regardless of the status of contract negotiations. The BH-BL Board of Education and many other groups around the state are actively lobbying the Legislature to change this.

The Legislature and possibly the Governor may have the unilateral authority to freeze public employee salaries, but under this and other laws, school districts do not.

Are the BH-BL bargaining units going to make concessions?

Concessions can take many forms. Keep in mind that the school workload has not diminished as our staffing levels have diminished over the past two years. Cleaning, supervision, instruction, mentoring, typing, communicating -- all these and many other tasks must still get done. All staff members have been pitching in to maintain our high standards by taking on extra work as we have made staffing reductions in the past two years, so that school services and our students' performance can remain high.

In addition many staff have agreed to give up benefits that were guaranteed to them in their contracts, and for which the district has already set aside funding. Superintendent Jim Schultz has given back a total of $18,000 over the last two years and next year. This includes give backs of salary and compensation for unused sick days included in his contract.

Members of the BH-BL Administrators bargaining unit, plus the two assistant superintendents, have given back salary, compensated sick days, and vacation days that the district is already obligated to pay.

The assistant superintendent for support services has agreed to give back $3,000 in her contractual compensation, and the assistant superintendent for instruction has agreed to freeze his salary, creating another $3,000 in savings for the district.

Members of the BH-BL Administrators Association have agreed to open their contract and give back at least $10,000 in compensation for 2011-12 to restore some programming. The administrators bargaining unit has 19 members, including school principals, assistant principals, the athletic director, director of special services, and a number of part time positions.

Additionally, members of the Operations Management Organization have agreed to open their contract and make similar concessions. The OMO is a small bargaining unit that covers four support staff supervisors: the transportation, custodial, buildings and grounds, and school lunch managers.

All staff have further agreed to several changes in health insurance plans that have lowered district costs significantly over the course of this fiscal crisis. One insurance provider was dropped due to higher premiums. Staff agreed to pay higher co-pays for doctor visits in all remaining insurance plans. Additionally the Teachers Association suggested adding two Medicare Advantage insurance plans, with projected annual savings to the district of $108,000 starting in 2010-11.

The Teachers Association contract expires on June 30, 2011, and active negotiations are currently taking place in which concessions, salaries and benefits are being discussed. The Board of Education and superintendent are keenly aware of the community’s concerns regarding any cost increases, but during active negotiations, proposals will not be discussed publicly.

When is the next teachers’ contract negotiation? Who negotiates contracts? Does this happen locally?

The district has a three-year contract with the BH-BL Teachers Association that expires on June 30, 2011. As noted in the question above, negotiations on a successor contract are now underway. Under authorization from the Board of Education, the head negotiator for the district is our attorney, and our two assistant superintendents complete the district’s negotiating team.

Can we require staff to pay a higher percent of the cost of health insurance? What has the district done to deal with ever-rising health insurance costs?

Unlike many local school districts and municipalities where staff and retirees contribute nothing to the cost of their health insurance, BH-BL active staff members pay 10% of the health insurance premiums for single coverage and 20% for both two-person and family coverage. BH-BL retirees pay 50% of all health insurance premiums. These percentages are established in staff collective bargaining agreements, so they cannot be changed unilaterally.

The district Health Insurance Committee (which includes representatives from all bargaining groups and retirees) has found many other ways to reduce the cost of health insurance in recent years. Each of the following changes resulted in significantly lower annual premiums:

• Increasing the office visit co-pay to $25,

• Offering all of our health insurance as part of a consortium of 15 school districts.

• Switching our CDPHP contract from a community-rated plan to an experience-rated plan.

• No longer offering one health maintenance organization’s plan whose premiums were higher.

• In the current year, adding two Medicare Advantage plans with a projected annual savings to the district of $108,000.

Can we require staff to pay a higher percent of the cost of their pensions? How does the state pension system work, and how can we get control of pension costs?

Decisions about the pensions of NY public employees are made entirely by the state legislature, the state comptroller, and a state governing board. So, no, school districts, towns, counties, and state agencies cannot require their staff to pay a higher percentage of their pension costs.

The state’s pension system is divided into two different programs: the Teachers Retirement System (TRS, which covers teachers and administrators) and the Employee Retirement System (ERS, which covers most other public school, county, municipal and state employees). The ERS is managed by the state comptroller, who announces annual required contribution rates. The TRS is managed by an independent governing board that sets annual contribution rates. There are employEE contribution rates and employER contribution rates for both systems.

Under state law, both pension systems are required to be “fully funded,” which means that (unlike many states) they must collect and carry reserves that would meet all current and future liabilities for current staff on payroll. Required employer contribution rates are computed using a five-year average based on performance of the stock market. Sometimes employer contribution rates can fall dramatically, but right now the stock market crash of 2008 and the continuing poor performance of the market are still driving employer contribution rates higher. For instance, over the past 25 years, the mandatory TRS employer contribution rate has been as high as 18.8% (in 1986-87) and as low as 0.36% (in 2001-02 and 2002-03). For 2011-12 it is projected to be 8.6%. School districts have no voice nor choice in setting these state rates.

What about the new “Tier 5” in the state pension system – isn’t that going to save us money?

In 2010 the state Legislature passed a law creating a new tier, Tier 5, in the state pension systems for all public employees hired on or after Jan. 1, 2011. This will result in markedly lower costs for public employers in the future, but it will have no impact on the BH-BL 2011-12 budget.

Tier 5 employees will themselves contribute more toward their pension than the Legislature has required for employees in Tiers 1-4. Over time as older employees age out of the system and Tier 5 employees become more numerous, the higher employEE contribution rate paid by Tier 5 employees should gradually reduce the rates that employers must pay.

There are also a number of groups across the state talking about further pension reform with a potential Tier 6 that could have a higher contribution rate or a different structure, such as switching from a defined benefit to a defined contribution pension plan.

Can you please break out where all of the funding for the BH-BL budget comes from?

NY public school districts have two primary funding sources for their annual operating budget: school taxes and state aid. In the current school year (2010-11), state aid to BH-BL comes to $18.1 million or 34% of the total budget, while local property taxes cover $33.4 million or 62.5% of the total budget.

Thirty-five years ago, those percentages were the opposite, with state aid supporting 58% of the BH-BL budget and taxes 35%. Many school districts have experienced a similar historical pattern of taxes supporting an increasing share of their budget over time while state aid has supported a decreasing share. As a result of this trend, across the state we are seeing more groups of people talking about different models -- other ways to fund public education that could rely less on property taxes and be more fair to citizens on fixed incomes.

The remaining 4 - 5% of BH-BL annual income comes from a variety of sources. In the current year these are: fees, tuition and admissions $137,000; rents, refunds and interest on investments $680,000; federal Medicaid reimbursement $115,000; and the year-end fund balance $1,000,000.

How much money do we get from the state? Is state aid changing?

If the state Legislature ultimately adopts Governor Cuomo’s proposals, BH-BL is facing its third year of significantly lower state aid in 2011-12. Roughly a third of our annual budget comes from the state in various types of “state aid.”

The largest chunk of state aid to schools is called “Foundation Aid,” which is money legally required to go to school districts under the court-ordered decision in the Campaign for Fiscal Equity case. Foundation Aid to schools has been frozen at the 2008-09 level in the printout we receive from the State Education Department. For BH-BL this is $12.6 million. However, what Gov. Paterson and now Gov. Cuomo have done for the last three years is to impose something called a “Gap Elimination Adjustment” (GEA), which is a negative number representing the amount of our Foundation Aid that the state can’t afford to give us. For 2010-11 the Gap Elimination Adjustment for Burnt Hills was $1.6 million. For 2011-12, Gov. Cuomo is proposing that our Gap Elimination Adjustment would increase to $3.3 million. In other words, we face a $1.7 million net loss of aid in 2011-12.

School districts also receive a number of “expense-driven” aids, which are a percentage of the amount of money they spent for specific types of things the year before. These include building aid, transportation aid, special education aid, BOCES aid, computer hardware aid, software aid and textbook aid.

With all the state lottery games and new casinos in NY, does any of that revenue go to education? Wasn’t the lottery designed to support education?

Yes, state lottery and casino revenue was designed to support education and it does. Lottery revenue goes into the state coffers along with other state fees and state taxes. It is a major component of the revenue that is then distributed to public schools as “state aid.”

BH-BL receives an annual statement showing how much of our aid specifically came from lottery sources. For the 2009-10 school year, $3.7 million of our state aid was derived from the NY State Lottery.

What about grants? Does BH-BL have a staff member who is responsible for seeking out grants to support our programs?

Yes we do. The assistant superintendent for curriculum and instruction, Dr. Rick Evans, is in charge of efforts to bring grant funding to BH-BL. What members of the public need to understand, though, is that grants are typically not available for annual operating costs. We apply for member item grants for our local legislators as well as other grants every year, but these are typically available only for special one-time activities, improvements or equipment, not to fund ongoing annual activities.

Our teachers apply for and receive a number of small grants every year from the BH-BL Education Foundation, which are used to purchase special equipment or launch a special project that is beyond the scope of the annual budget. Working in cooperation with the BOCES and PTAs, our schools are also successful in accessing arts-in-education funding that brings in visiting artists to work with students. Additionally, teachers have begun to tap into resources like DonorsChoose.org to solicit support for extra classroom equipment and small grants. (Click here to view the five BH-BL projects listed on DonorsChoose.)

Presently Burnt Hills and the other six Schenectady County school districts are partnering to apply for a $45,000 “Local Government Efficiency Grant” from the NY Department of State. If received, this would be used for a county-wide effort to study ways that districts could potentially save money by sharing business office functions (such as auditing , purchasing, printing and mailing).

This spring the physical education department is also applying for a second Federal Carol White grant similar to the $98,700 grant BH-BL received from this program in 2008. We are applying for $1.2 million over three years to supplement our physical education, health and family & consumer sciences curriculum and improve student fitness.