At the Dec. 10 board of education meeting, Assistant Superintendent for Business Andrew Van Alstyne gave a presentation about the rollover budget for the 2025-26 school year. This presentation is the first of several budget presentations to the board and is typically conducted early in the budget development process for the Guilderland Central School District.
What is a rollover budget?
The rollover budget gives the district a preliminary estimate of the expenditures and revenues for the next school year using the previous year’s general fund budget as a starting point. Over the course of several months, the district refines these estimates as it gathers more information about state aid and property tax projections on the revenue side and actual costs of needed staff, supplies, materials, etc., on the expenditure side. The first draft of the district’s actual budget is released in March then further refined until it is adopted by the board in April. A review of the rollover budget is an initial step in this process.
The rollover budget is built upon the following:
- the assumption that all current staffing and programs will carry forward into the new school year;
- revenues and expenses are projected into the new year using known data or what can be reasonably anticipated based on available information;
- trending of historical data or information from outside entities to provide a basis for determining estimates.
Key factors in budget development for 2025-26
There are several considerations GCSD administrators will take into account when developing the 2025-26 school year budget, including the following factors.
Contractual Salary Increases
For school districts across New York state, staff salaries and benefits comprise approximately 75% of a district’s general fund budget. The district is currently negotiating several collective bargaining agreements that will expire at the end of this school year; at this early point in the process, the district projects an approximate $2.6 million increase in salaries
Health Insurance
GCSD is a member of a Capital Region school district health insurance consortium that has leveraged their combined populations to secure favorable and stable health insurance rates over many years. Medical coverage is pooled between the 21 districts in the consortium; each district is fully self-insured for prescription drug coverage. Currently health insurance rates are trending significantly higher than past years, both locally and nationally. For the 2025-26 school year, medical premiums are projected to increase 10% and prescription drug coverage faces double digit increases. An 11% increase in overall health insurance premiums would result in a $2.2 million increase for the district for 2025-26.
Other Benefits
The cost of other benefits, including pension costs for the New York State Employees’ Retirement System and the New York State Teachers’ Retirement System, are expected to increase by $700,000 for the 2025-26 school year budget. The increased pension costs are largely due to two factors:
- Higher salaries: As salaries increase, so do pension contributions, since pension costs are calculated as a percentage of an employee’s salary.
- Pension calculation change: The move from a five-year final average salary (FAS) calculation to a three-year FAS for Tier 6 pension plans has raised projected pension costs. This likely results in higher pension benefits for individuals, which in turn increases the overall costs to the pension system.
Federal Funding
GCSD receives approximately $1.9 million in federal funds through Titles I, II, III and IV as well as Title 611 and 619 special education grants. These funds are earmarked for specific services, and any cuts or reallocations by the federal government would force the district to find alternative funding sources to continue providing those services. In addition, uncertainty about federal policy adds another layer of unpredictability to revenue projections.
Structural Deficit
The district is facing a $3.1 million structural deficit, meaning projected expenses exceed projected revenues by that amount, which is not uncommon in a rollover budget. This gap highlights the financial challenges the district will need to address through budgeting adjustments, potential cost-saving measures, or other funding sources.
Negotiations with Labor Units
The district is negotiating with six different employee units, as their contracts are expiring this year. The outcome of these negotiations is uncertain, particularly concerning salary expenditures, which makes it difficult to predict the exact impact on the final budget.
NYS Foundation Aid Funding Commitment
Foundation Aid is one of the two major types of state aid in New York. Foundation Aid fulfills a mandate that New York state provide adequate yearly funding to ensure every child receives a “sound basic education.” Foundation Aid can be used for operations, salaries and programming. The second kind of aid is expense-based aid, which includes reimbursements for expenses in specific areas, such as transportation, capital construction projects, etc.
Foundation Aid is a major source of unrestricted funding for school districts, but uncertainty surrounds its future. The state is considering changes to the formula, particularly the possible elimination of the “hold harmless” provision, which ensures that no district’s funding is reduced.
A recent study by the Rockefeller Institute has assessed the Foundation Aid formula and recommended changes. However, Gov. Hochul has expressed opposition to ending the hold harmless provision, making the direction of future state aid unclear. This uncertainty means that for budgeting purposes, the district has decided to hold Foundation Aid flat until more clarity emerges.
Local Sources of Revenue
District administrators are projecting property tax revenue to be approximately $1.4 million for the 2025-26 school year.
Appropriation of Fund Balance
At the present time, which is early in the budget development process, the district foresees a possible gap of $1.7 million between projected expenses and projected revenue. One way to address this shortfall is to draw from the district’s fund balance. However, the district is committed to exploring other budgetary adjustments before using its limited savings.
Factors to Watch
- State Aid: The final outcome of state aid and changes to the Foundation Aid formula will significantly affect revenue.
- Federal Aid: Any shifts in federal policy or a reduction in federal grants could put an additional strain on the budget.
- Collective Bargaining Outcomes: The result of contract negotiations could lead to changes in salary expenditures, which need to be factored into the final budget. The following contracts are expiring this year:
- Guilderland Teachers Association (GTA)
- Teaching Assistants
- Guilderland Office Workers Association (GOWA)
- Technology Personnel
- Guilderland Principals Association
- District Office Administrators
What comes next
Administrative Budget Planning Meetings
GCSD administrators and supervisors will meet with district office leaders to share their recommendations for items to be included in the 2025-26 budget. These recommendations are based on their analysis of student needs and other operational considerations. Budget planning meetings provide an opportunity to consider what adjustments need to be made for the 2025-26 school year. The goal is to ensure that the proposed budget effectively and efficiently meets the needs of students.
Community Input
In January, the district will engage stakeholders and Guilderland school community members to gather feedback regarding budget priorities. Community members are also welcome and encouraged to provide their input through public comment at board of education meetings. This valuable perspective helps district leaders know where and how the community believes resources should be directed.
NYS Executive Budget Proposal (Jan. 2025)
The governor’s executive budget proposal will give GCSD more definitive information about Foundation Aid and other aid categories, to inform the ongoing development of the spending plan.
Superintendent’s Draft Budget Proposal will be shared Mar. 4, 2025
Once the governor’s proposed budget is released, GCSD administrators will refine their recommendations that will result in a draft budget, which Dr. Wiles will present at the Mar. 4, 2025 board of education meeting. This draft budget is subject to revision but will provide the board of education members with a document to work from before adopting a final budget at the Apr. 8, 2025 meeting.
Important upcoming dates
- Mar. 4, 2025: Superintendent’s Budget Presentation
- Mar. 11, 2025: Budget Workshop Q & A
- Mar. 25, 2025: Budget Work Session
- Apr 8, 2025: Board Action to Adopt the Proposed Budget
- May 6, 2025: Budget Hearing
- May 20, 2025: Budget Vote and Election