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Survey: Pension, benefits push most school budgets to rise

Barbara Leventhal, teaches her class at Bretton Woods

Barbara Leventhal, teaches her class at Bretton Woods Elementary in Hauppauge. (Feb. 1, 2011) Credit: James Carbone

School spending and tax proposals are rising across Long Island, fueled by pension costs and other staff benefits.

Preliminary results from a Newsday survey, covering 64 of 124 districts in Nassau and Suffolk counties, found that most school budgets are up 3 percent or more for the coming year. Regional education leaders, in their own analyses, also estimate average hikes of 3 percent or higher in both spending and taxation for the 2013-14 school year.

The state Department of Education tentatively plans to release official budget "report cards" with district-by-district figures later this week.

This year, the first of the state-imposed tax cap, budget increases went up 2.29 percent Islandwide, while tax levies showed an average 2.6 percent rise. Levies are total monies collected through property taxation and are subject to cap limits.

Both school officials and their critics pegged much of the increases in proposed budgets on rising costs of generous pension plans that lawmakers in recent years have sought to curb.

"There are two driving forces -- people staying on the job longer, and the fall of the stock market in 2008," said Joseph Dragone, assistant superintendent for business in the Roslyn district.

Dragone, one of the Island's most experienced school administrators, referred to the fact that pension funds lost investment money in the market crash and contribution rates had to be raised to make up the difference. The economic downturn also convinced many school workers to delay retirements, raising the probability that they will earn higher benefits down the line, he said.

The amount of money that districts must contribute next year to the state pension system covering teachers and other school professionals will rise from 11.84 percent of payroll to 16.25 percent.

Under state law, much of that increase is allowed under cap limits. That means districts can add such expenses to their budgets and have them approved by simple voter majorities, rather than obtaining the 60 percent required by law to "pierce" the district's cap.

Newsday's survey identified seven local districts that will attempt to override their respective tax caps by winning voter majorities of 60 percent or more. Voting on district budgets and board candidates is scheduled for Tuesday, May 21.

Plans to pierce caps have divided residents in some communities. School taxes account for more than 60 percent of homeowners' tax bills.

In Bay Shore, some residents at a board meeting last week debated a proposal that would boost the district's total tax collections by 6.4 percent, well above its 3.2 percent cap.

Bay Shore school officials and their supporters contended that next year's budget is quite modest -- spending actually would decrease 1.2 percent under the plan. They added that the average tax rate on properties needed to generate funds would rise 5.9 percent, less than the 6.4 percent increase in total revenue.

"It's less than ten dollars [per week] to stay the community we are," said Michelle Craddock, a parent and paraprofessional worker in the district, who was describing the budget's impact on the average homeowner.

"Ten dollars doesn't sound like much," replied a gray-haired resident seated six rows away in the Bay Shore High School auditorium. "But 10 dollars is a lot when you're a senior citizen."

The Empire Center for New York State Policy, an Albany-area think tank, reported Tuesday that cap limits for next year average 4.6 percent statewide, up sharply from this year and driven entirely by pension-cost exclusions. The report was based on state comptroller's data.

On the Island, cap limits for next year average 3.5 percent, according to the center's analysis.

E.J. McMahon, senior fellow at Empire, said school contributions to pension plans could be expected to remain in the high teens, percentagewise, for at least three to five years.

"This is not just a brief summer thunderstorm," he said.

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