Education officials are contemplating raising $5 million in revenue through local taxation to close a $25.77 million budget shortfall in the school district’s 2015-16 budget. An increase in local taxes would be the first in more than a decade for the school board.
“One of the big questions that we’re going to be asking you to engage with us on to help us with this issue is going to involve local taxes,” said Donnie Evans, state-appointed district superintendent, to the school board on Wednesday evening. “We have not, in six years I’ve been here, raised local taxes.”
District’s acting business administrator Daisy Ayala distributed a one-sheet budget overview that included a great deal of red print. She said the district’s appropriations stand at $497.81 million while its revenues are at $472 million creating a difference of $25.77 million.
“How we’re looking to address that is by increasing the tax levy by $5 million and reducing our overtime and extra compensation by $3 million,” said Ayala. Her overview displayed a balanced budget with several savings: $16.57 million savings from staffing adjustments (retirements, resignations, and the likes), $1.2 million saved through staff re-organization, $3 million saved from overtime and extra compensation reduction, and $5 million obtained through tax levy increase.
“That’s not happening,” said mayor Jose “Joey” Torres, in a direct, terse response, when asked for comments on Thursday. “I suggest they look at their budget and find an additional $5 million to cut.”
Torres said his administration has yet to receive any notifications about a potential tax increase, but when it does he will reach out to the city council to hire an expert, a former superintendent of schools, to complete an audit of the district’s budget. “I believe the provision of the law allows us to hire an expert and find the $5 million that they are looking for,” said Torres.
The mayor said he recalls the schools budget being around $90 million two decades ago when he was on the council. “How in the world could we justify an increase from $90 million to little shy of $600 million and still say that’s not enough money,” said Torres.
Torres said the district should be asking the state for funding instead of local taxpayers. He said the district should seek assurance from the state that the city is receiving its equal share of educational funding. He said whether the district is receiving sufficient funding, “would clearly be revealed when we hire this education expert to look at the budget.”
The council’s finance committee chairman Kenneth Morris echoed similar sentiments. Morris said the business administrator should be asking the state for funding rather than the city’s taxpayers.
School board president Jonathan Hodges has said the state has abandoned using the School Funding Reform Act (SFRA) formula which results in reduced state funding for the district. During last year’s budget approval vote he included a protest message within the resolution stating the amount of funding given to the district was not enough to provide a “thorough and efficient education” to city students.
“The state is not adhering to the formula that was put in place to educate students here,” added Errol Kerr, school board member.
Hodges said the district has been flat funded since 2009.
“The Paterson taxpayer is already shouldering a disproportionate share of responsibility of supporting the school district’s bloated budget, and to continue to do so when they have no say whatsoever in the operation, management, or how those dollars are spent is unconscionable,” said Morris. “It is taxation without proper representation.”
Morris said increasing taxes by another $5 million for the district amounts to a subtraction of the city’s $25 million state-aid award to $20 million.
“We need to exhaust every option,” said Kerr. “Taxes should be the last thing we look at.”
School board member Christopher Irving concurred with Kerr. He said the district should consider outsourcing instructional assistants and substitute teachers to create savings. He also suggested the district figure out a way to reduce its healthcare costs without sacrificing quality of coverage for teachers.
Irving also suggested Evans scale back his University of Pittsburgh’s Institute for Learning (IFL) contract. “We reduced it from $1.5 million to $500,000,” said Evans.
Kerr singled out charter schools which continue to take a large chunk of the district’s budget. $36.81 million will go to charter schools in the next school year. He said the district needs to call on the state for a “moratorium on charters.” He said the district continues to maintain 52 odd number of schools despite the opening of several charter schools, but with less money.
“It will be hell in the city when we tell them they have to pay more taxes,” said Kerr.
A joint meeting between the council and the school board to discuss increasing local taxes is scheduled for 7 p.m. on Wednesday, March 11th, 2015 at the city hall.