‘There is a Concern’: Cuts, Layoffs Possible in Carmel Schools as COVID-19 Causes Financial Woes
The Carmel Central School District could be forced to cut athletic programs, elective classes and staffing positions as the COVID-19 pandemic continues to place tough restraints on school budgets.
A roughly $3.5 million loss during the school year due to the coronavirus has school officials concerned about how they will maintain the status quo while sustaining costs for the remainder of the school year. Since March, that loss has included $321,000 in state aid and $1.7 million in state transportation aid.
Roughly $1.4 million has also been borrowed from the districts reserves to use on unanticipated costs due to the pandemic, including the salaries and benefits stemming from the hiring of additional substitutes and staff members, along with safety equipment and supplies.
While budgets aren’t usually discussed until March or April in a school year, Interim Superintendent of Business James Reese said he wanted to inform the board of its financial woes before it was too late, adding how the state has already projected a $63 billion loss through 2024 as a direct consequence of COVID-19.
“Timing is horrible, it’s very tough to even look at these things and talk about these kinds of issues,” Reese said at Carmel’s Dec. 8 Board of Education meeting. “I just wanted to get it out there so the board has an idea.”
While the district has already instituted a spending freeze, Reese suggested layoffs, program reductions and tightening spending wherever possible could address the district’s financial situation. Other proposals included eliminating non-mandated athletic programs and co-curricular activities for the remainder of the school year.
Additionally, Reese said the board could instead dip into its $12.1 million fund balance to offset operating expenses. However, he said a fund balance is often used for one-shot expenses, not covering a district’s operational costs.
Reese said if money is borrowed from reserves to cover expenses the state requires the district to pay that money back over a four-year term.
“Going forward, if we’re anticipating four years of the state having a problem with revenues, you can probably guarantee the state aid will be frozen or reduced over the four-year period, so you run into the problem of having to fund your budget as well as pay back any money you borrowed to make it through this year,” Reese said. “So, there is a concern with borrowing from the reserves.”
Trustees Eric Mittelstadt and Matt Vanacoro agreed the board should use the fund balance to supplement the budget in lieu of layoffs or cutting programs. They added any course of action should be taken, explaining that terminating positions and eliminating electives and sports in the middle of school year isn’t fair to the students or community.
Furthermore, Mittelstadt said residents will understand if next year’s school budget is much higher if it can aid in providing students with a valued educational experience.
“I think under the circumstances here, using the fund balance to make sure people are employed and the programs are good, I think if our budget goes over the minimum next year, I think that we have a fairly intelligent tax base that (will know) this is necessary and we have to pay it back,” Mittelstadt said. “I would never ever vote to lay anybody off if there was a way not to do it and I can see where this is headed.”
He added that the fund balance is there for a reason and the district shouldn’t worry about politics or money, just student needs. Vanacoro asserted if there was any time to use a rainy-day fund that it’s now.
While board members discussed some fundraising efforts that could be done to offset costs if cuts are needed, Interim Superintendent Eric Stark is hopeful that the district’s financial situation will change with the new presidential administration.
“We’re certainly hopeful that some of these financial issues will be turned around and be solved by either some help from the state or federal government,” Stark said. “But we do have to be aware of what the worst-case scenario could be, and we don’t want to be caught not having had a chance to discuss it.”
