Paul Abbott, Jamestown Public Schools board president, and Dr. Kevin Whitaker, Jamestown Public Schools superintendent, speak as board member Shelly Leathers looks on at left.

At least two Jamestown Public Schools board members prefer seeing budget cuts now as opposed to possibly bigger budget cuts in two or three years.

Board members heard a presentation from Brittnay Spry, Jamestown Public Schools business official, during Tuesday’s meeting. Early projections show the 2021-22 budget is projected to have $90,300,000 in revenues and $91,200,000 in estimated spending. That figure is largely what Dr. Kevin Whitaker, district superintendent, has referred to over the past few weeks when saying the federal government’s December COVID-19 stimulus package helped keep the district’s 2021-22 budget intact. Whitaker still sees a fiscal cliff coming, though, as do a pair of district board members.

“That federal stimulus payment of $6.2 million is really the key factor in balancing our budget this year,” Spry said.

The district is expecting a $600,000 reduction in state aid through Gov. Andrew Cuomo’s consolidation of expense-driven state aid, but the district will see a boost of about $6.206 million in federal stimulus money. An early look at the district’s 2021-22 budget shows a gap of about $900,000 between projected revenues and projected spending before any changes are made. Spry’s spending estimates assume no cuts being made by the board while her revenue projections assume small increases in state aid that she warned might not be approved by the state in future years. The 2022-23 budget as projected now would see revenues projected to decrease to $85,700,000 and spending increase to $93,100,000. The gap between expected revenues and spending grows further in 2023-24 to $87,500,000 in revenues and $95,000,000 in spending.

“The important thing about the federal money coming to New York is that similar to what he’s done before, the governor took state aid and filled it with federal money,” Whitaker said. “That works great for this year. That works great for next year. However when that $3 billion a year has ended statewide for education and it goes away, there’s a $3 billion hole that New York state has to fill somehow. I don’t think it’s going to be filled with a magical tree of millions of dollars. There’s going to be some hardship associated with it — the same kind of hardships that were associated with the Gap Elimination Adjustment after the Great Recession of 2008. For five years afterwards there was massive funding struggle before the funding came back for schools. I say that to say this. The fiscal cliff is a thing. It’s going to happen. We’re covered this year. We’re covered next year. What we look like in years three, four and five is dependent on what we do this year and next year. We need to be conservative on our expenditures and we need to engage in a strategic use of our reserves. When we have them, when we have funding, we have to make sure they are healthy for the future when we don’t have funding and we can rely on filling in some of the gaps with those reserves.”

Spry and Whitaker said it is important for the district to maintain a fund balance as close to the state’s maximum allowed 4% surplus as possible so that the district can cover state aid shortfalls with its own surplus in future years. Board member Shelly Leathers said district officials should propose a budget that more closely resembles actual spending rather than the amounts of spending the district has budgeted in the past. The 2020-21 budget was approved for $88,313,671, but the district is projected to spend around $85 million. Leathers also warned against cutting too much and putting the district into a bad position in future years by not building the district’s surplus.

“I’m hoping that as we we continue to go into the budget-building process that we’re going to look at what did we actually spend in 2021,” Leathers said. “It’s not going to be $88 million. To look at that $91 million number for 2021-22, I think that’s not conservative at all. That’s about a $7 million increase over what we think we’re going to actually spend. We need to look at that. Later you may hear us say that we have a reserve from this year, but the whole point again is to be saving some of that for the rainy day fund. … I’m trying to be transparent here as well. We’re not going to spend $88 million and we’re probably not going to spend a budget of $91 million next year because that would be an increase of like 8%. At the same point we need to think about the funds that will be coming next year and need to be saved for the following years. It’s really a bigger picture that we’ve never really looked at.”

District officials entertained the idea of mid-year budget cuts throughout the COVID-19 pandemic after Cuomo threatened to withhold up to 20% of state aid. Paul Abbott, board president, and Whitaker both said the district is in a better place financially now than it was during the height of the pandemic — but caution that now is not the time to be spending unnecessarily. Whitaker noted the projected $91,200,000 budget for 2021-22 looks like a big increase from the pared down pandemic budget of $88,13,671, but is roughly a 2% increase from the 2019-20 budget. Whitaker also cautioned against not budgeting enough to cover costs that are out of the district’s control like teacher retirement rates and health insurance costs.

Rather than increase the budget too much now, Abbott said he would prefer making cuts now if needed so that even bigger cuts don’t have to be made later.

“As we all know the dollar you have to cut is actually two dollars if you have to cut it in January,” Abbott said in regard to mid-year cuts. “I almost think we have to take a similar approach as we look at this, sort of that multiplication theory within each individual budget. I think it would be in our best interest to start looking at those things over three or four years. I don’t know how any realistic person could not think — everyone, not just Jamestown — it’s the reality of everyone who depends on state aid. The bottom is going to fall out eventually. I would agree with (Leathers). Those numbers need to come down now so that maybe in two years, we might have to cut one or two things instead of having to cut five or six things that we weren’t prepared for.”