Niagara Gazette — At an absolute worst-case scenario, administrators at the Niagara Falls City School District have a road of tough decisions in front of them concerning the 2013-14 school year operating budget.
Superintendent Cynthia Bianco said district spending could rise to $127.7 million without any cuts to current year staffing, a massive $6.4 million increase.
"This is the absolute worst-case scenario," she said following the district's school board meeting Thursday. "This doesn't have what the governor proposed in it. Over the next few weeks, we'll develop some strategies and we'll try to even things out. We're hopeful things will turn out well."
What exactly did Gov. Andrew Cuomo's executive budget, released last month, propose affecting district spending? The largest change comes in the form of pension reform, which would drastically reduce the financial burden districts with high numbers of employees face next year.
Without reform, the TRS contribution is expected to increase from 11.84 percent this year to 16.25 percent next year, an increase which represents a $2 million (38 percent) increase in spending in Niagara Falls.
Administrator for School Business Services Timothy Hyland said Cuomo's plan would cap a district's pension payment at 12.5 percent for at least the next five years, which would save the district more than $1 million in increased spending next year.
He said a good analogy would be to consider the district attempting to get a fixed-rate mortgage as opposed to a variable rate.
The state pension system, which pays more than $5.7 billion each year, requires a fully-funded system according to the state's constitution. Opponents of the reform believe capping contributions from districts would result in possible underfunded situations, should investments — the system's No. 1 source of funding — flounder.
But Hyland believes the cap would go a long way to providing some short-term relief to districts feeling the penny pinch heading into next school year, giving districts a chance to build up their numbers of Tier VI employees, a category created by Cuomo's administration last year which requires much more contribution from the employee to the system.