Fair & Honest Budget?
It’s time to take a look at the budget in a purely objective light and determine if the budget is fair and honest. In one sense a ‘fair budget is a completely subjective judgment. However, to make that ‘individual’ subjective judgment the budget has to be presented honestly so residents can evaluate valid data. Therefore, we need to focus on the honesty or the validity of the numbers in the budget. In this part we are just going to look at the revenue side.
The BOE has already voted on the revenue side of the budget. This is the most important component of the budget, because it allows the board to go out and tax residents to get that money. In one sense the ‘how they spend the money’ is less significant because once a budget is passed they can spend it anyway they want, they are not held accountable to what was said during budget presentations. So it’s important to read between the lines. The Revenue side of the budget has been approved. The BOE approved a budget of $287.8 million dollars. This represents an increase from $280.7 million dollars from last years original budget. The budget last year was actually increased $2 million for emergency repairs but as a one time emergency cost you should not include it in any comparison. So, the actual year on year increase in the budget is $7.1 million or 2,5%.
It is important to look at where the sources of revenue are coming from. They come from local property taxes, state aide and reserves. Approximately $100 million of the total budget comes from state aide. This is a decrease of nearly $13 million in state aide from the current school fiscal year. So, with a decrease of $13 million in state aide and an increase of $7.5 million in revenue over last year, the district needs to come up with an additional $20 million. Where are they getting it?
The district is getting the $20 million by increasing taxes and using reserved funds. The district is increasing the taxes by just over $6 million dollars and the basically the rest of the money is being funded using reserves. In fact so much reserves are being used the question needs to be asked, is the district really allowed to hold that much money in reserve? The answer is no. In last years’ $280 million budget they were only allowed to hold just over $11 million in reserve. So, how do they get away with holding much more then the legal allowed amount? Simple, there is no enforcement and they hide the money in accounts like the workers compensation reserve.
Now the question is how much will our taxes increase because of the $6 million dollar increase. The district claims the increase in property taxes will be somewhere in the area of 4.5% or $350.00 per house. Is that number correct? Probably not. The actual tax increase is not known until October and won’t be reflected in your tax bill until December. The amount of the actual increase is really dependent on several things. For example, how much of a tax base is really out there. For example, if there is a poor economy and houses are foreclosing and people are delinquent in paying taxes, than more money has to be collected from less taxpayers thereby increasing taxes. This is just an example but one thing is certain. The district number is low. What is a realistic number? A more realistic number is that the Board approved budget will increase the taxes of each property by closer to $500.00. The Nesconset side of the district will be hit harder.
So, the real question is, ‘Does the district really need the revenue it is asking for? There are two sides on this issue, the revenue and the spending side. Here we will just look at the revenue side, and save the spending side for another post.
On the budget the Board just approved for next year they have stated that there is an extra $5 million dollars that the budget will be under spent or extra. Because the state aide was just increased by $2.5 million that would be a total of $7.5 in ‘extra’ money they don’t need. Two questions, why is the board saying they need to do this and is this amount real? The answer to the first question is they are doing this because they want to raise the base budget before a possible tax cap of 2% is put on. The bottom line is the tax cap is very unlikely to be passed this year. They just want to increase the base budget. This allows ‘built in’ extra money for future years and a higher contingency budget in future years if a budget were to fail. It’s a game. If this money were not put the budget and given back to taxpayers, taxes would be reduced in the area of $600.00 per house hold. These are district published numbers, but are they real?
But the question really needs to be asked is the ‘fudge factor’ or extra money in the budget more than they are saying? Let’s take a look. FG thinks it is closer to $30 million. Let’s try to get a realistic number. To do that we need to try to estimate what the district will really spend in next years budget. We can’t look at the proposed budget to do that because we know there is at least an extra $7.5 million that the budget has been fudged so the spending numbers are admittedly inflated by the district. So, the only way we can come up with a real number is by looking at past budget trends and applying those percentages to the proposed budget. Again, we need to do it this way because the budget does not contain real spending numbers.
The district has admitted that the current budget of $280 million is under spent or ‘surplus’ by $11 million as of the beginning of March. This means that they are saying the actual spending will be about $269 million. This seems pretty consistent. Over the past three years the district has under spent the budget by over $12 million each year and has run a surplus each year for the last 10 years. The only year the district actually spent the budget published amount was in the contingency year. In fact, if you add up the surplus or the under spent budgets for the last 10 years the total comes to over $60 million. These are district published numbers! Kind of makes you wonder where all that money went. It easily supports the argument that the reserves are over funded by close to $37 million since some was spent on capital spending and we are allowed to have 13 in reverses. So, how much was legitimately put into appropriated reserves as opposed to unappropriated reserves. The board doesn’t have a clue. Only the business manager knows what is going on here.
So, to get back to the question of how much the district will actually need to spend next year, based upon the history and past budget trends the number is probably in the area of $275 million. Actual spending this year will end up at about $268 (based on trends). We know factually last year (2008-2009) the actual spending number was about $260 million taking out one time costs (district supplied number). Do spending increased just under 3% from 2008-2009 to 2009-2010. It is fair to say that based on past trends, minus one time costs, the budget will increase in actual numbers next year by about $8 million. This brings us to actual real spending in next years’ budget (2011-2012) at about $275 million or that same just shy or 3%.
So the bottom line is the district will under spend the proposed 2011-2012 budget by approximately $12 million. So, as you look at the revenue side of this passed budget you really need to decide do I want to vote to give the district an extra $12 million. Based upon current reserves which will be at their legal limit come July 1 and the fact that the tax cap will not be passed next year the answer is the budget is grossly over funded. The district has cried poverty every year for the last 10 years yet every year but one it under spent the budget by close to $10 million a year. This Board cannot be believed. This budget, based on revenue projects, is bogus and should fail. Giving back $10 million of the $12 million would mean a tax break of close to $750 per tax payer. In this economy there is no justification to pad a budget by this absurd amount. A nearly 5% tax increase in this economy is uncalled for when the district is still in very good fiscal health. Remember, a passed budget increases your taxes by $500.00.
Next, what does the cost side look like. How is the district planning to spend or not spend the $287 million….. or do they even need to tall you?
This year the Board is hiding $25 Million of fund balance and hording $40 million of reserves and available funds. They are building fund balance at the expense of taxpayers, employees and programs to banking money because they fear the Tax Cap.
This year the district will spend $259 million and collect $287 million
The District has
$28 million in reserves (13 million ) and liability accounts ($15 million)
$11 million in un-appropriated fund balance
$25 million of budget surplus
$10 million in capital funds that can be used to restore programs
Everyone needs to understand every line on this one page http://www.sachemunspun.com/10-6Auditpg21.pdf
The Board sees no need for honesty in dealing with voters or taxpayers.
Next Year’s Tax Increase is 4.7% and they don’t need it
The 2011-12 Tax increase is $5,722,460…$5 million declared budget fat and $1.2 million of capital improvements.
See last page http://www.sachem.edu/board/budget11/pd ... on%203.pdf
The Sachem Board can only deal in fear and deception they have no trust in the community or a moral compass.
Go to www.Sachemunspun.com to hear the Board members confirm all the below
Current Budget, $282 Million … Passed Budget $287 Million … Contingent Budget $285 Million
Current Taxes, $145 Million … Passed Budget $151 Million … Contingent Budget $149 Million
Fund Balance, $17 Million … Passed Budget $23 Million … Contingent Budget $23 Million
Fund balance is the money you were overtaxed this year that is used to reduce taxes next year
CAN YOU TRUST THIS BOARD WITH A PASSED BUDGET? Twice in the last two years the Board increased the voter approved budget for $ 6 million of unforeseen circumstances. This year their meetings are full of “emergency repairs”. If the Budget passes expect a $4million increase for unforeseen circumstances.
A PASSED BUDGET IS AN OPEN CHECKBOOK! It permits the Board to increase spending and taxes for unforeseen circumstances. It also increases every future budget’s base by $6 million.
A DEFEATED BUDGET LIMITS SPENDING TO $285 MILLION AND NOT A DIME MORE In the last two years the Board has found excuses to increase spending and taxes beyond what the voters approved to avoid returning over taxation to the voters. Last year they collected $282,111,665 and only spent $265,509,366
The Board picks taxpayer pockets every year to level future taxes and bank money
2006-07 Budget 266,665,361 Expenses 262,000,417 Fund Balance 25,471,388
2007-08 Budget 274,707,921 Expenses 265,060,293 Fund Balance 32,148,964
2008-09 Budget 278,801,607 Expenses 267,926,888 Fund Balance 36,110,757
2009-10 Budget 277,694,940 Expenses 265,509,366 Fund Balance 41,687.472
2010-11 Budget 282,111,665 Expenses 259,700,000 Fund Balance 61,700.000 est. inc Excel TAN
2011-12 Budget 287,834,125 Expenses 270,000,000 Fund Balance 72,700.000 est.. inc Excel TAN
This page may help http://www.sachem.edu/board/budget11/pd ... istory.pdf
For 2011-12 http://www.sachem.edu/board/budget11/pd ... ndices.pdf
For 2010-11 http://www.sachem.edu/board/budget10/pdf/Appendices.pdf
For 2009-10 http://www.sachem.edu/board/budget09/pd ... 09to10.pdf
For 2008-09 http://www.sachem.edu/board/budget08/pd ... NDICES.pdf
For 2007-08 http://www.sachem.edu/board/budget07/20 ... ndices.pdf
For 2006-07 http://www.sachemunspun.com/documents/06-7Apendix.pdf
Now Listen to the 4 one minute clips and understand why I call the Board Pickpockets and deceivers.