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The tone was decidedly bleak Monday as Lansing Superintendent of Schools Stephen Grimm reported to the Board Of Education (BOE) on several negative impacts on upcoming school budgets.  Between reductions in state aid, the upcoming end of federal stimulus dollars, and the prospect of a significant and unexpected drop in revenue from AES Cayuga, Grimm had little positive to report.

"I've been getting so much information that's so negative all the time that it's almost to the point that I just want to say tell me what the number is and we'll start planning for it.  Instead of the rhetoric over and over, every single day.  It's a lesson in politics.  Unfortunately I think we're going to be the beaten-up victims at the end of it.  All the schools across New York State will be."

Grimm says that $750,000 in federal stimulus money filled a hole in this year's budget, and that he expects that money again this year.  Beyond that it is scheduled to be discontinued.  Grimm said that the idea was that the economy would recover enough that New York State could afford to resume the old level of state aid, but that in reality the economy is not recovering fast enough for that to happen before the federal money dries up.

At the same time state aid is going down.  This school year Governor Patterson has threatened to withhold a percentage of school aid that BOE member and attorney Richard Thaler says is illegal. 

"If we don't win that war we're going to be millions of dollars short," Thaler said.  "The taxpayer is going to have to make up the difference."

On top of that Grimm reported that aid will be 'flattened' for next year, meaning that the school can not expect more than it gets this year.  Grimm says the state has been using some of the stimulus money as well, so he is worried the district won't receive the entire $750,000.

Grimm attended a Superintendent's Conference in Albany over the weekend, which included a three hour session on what is now being called the 'funding cliff.' 

"The funding cliff is the year after that when the federal stimulus money is gone.  We'll have that $750,000 hole," he told the board.  "We have no idea if that's going to be replaced at the federal level.  We were hoping that the economy would recover so that state aid would be able to fill those gaps.  But it's looking like that is not going to happen quickly enough."

On top of this the district received the news that AES Cayuga, Lansing's biggest taxpayer, will produce about a half million dollars less in school revenue this year than it did last year.  The drop is due to a renegotiation of a Payment In Lieu Of Taxes (PILOT) agreement that was agreed to last year.  In fact the PILOT agreement produced about $300,000 more for this year's budget, and school officials expected that it would generate about the same again next year on top of the total amount paid last year.

If you add the $300,000 expectation to the $500,000 loss in revenue you end up with $800,000 less in revenue than expected for the 2010-2011 school budget.  Resident Mike Coles challenged the board to take a more active role in the negotiations, but was told that the negotiation is actually between Tompkins County's Industrial Development Agency (IDA) and the power plant.  In the same way the county is responsible for assessments, it negotiates PILOTs to set the value of large properties, and then the school districts set their tax rate to raise the remainder of the levy from property taxpayers.

"It cuts both ways," Coles said.  "If I am AES I shouldn't be able to negotiate five years down.  If the economy goes up then AES is going to tell you 'we have an agreement.'"

District Business Administrator Mary June King assured him that it is written into the PILOT that it is revisited on a continuous basis throughout the five year term of the agreement.  She said that while the district has no voice in the negotiation that County officials invited district representatives to attend as a courtesy.

"When the Superintendent and I attended the first meeting that was held this year we indicated that any decrease was going to be a significant hardship for us because we are taking state aid cuts and, in two years, federal aid cuts," she said.  "But there is also the very real situation in that if AES Cayuga were to close up shop and go away there would be an even bigger hit for us.  The reality is that we need this taxpayer."

"This is a secondary effect of 'cap and trade' right here in our back yard," noted BOE member David Dittman.  Dittman noted that if the plant were to close entirely, it would nmean a 20% increase for remaining Lansing taxpayers.  "It will increase our taxes by 20%.  If you don't want a 20% increase in your tax rate I suggest you write Michael Arcuri and let him know you are not for cap and trade, because that is exactly what the effect is going to be around here.  Because they're not going to replace it with a windmill that's worth $130 million."

The one bright note is the prospect of federal  'Race To The Top' money.  Patterson has proposed legislation that would make New York State eligible for up to $700 million if it qualifies in time.  He wants the state to change the sunset date from July 1, 2010 to January 15, 2010 for tenure determinations , eliminate the Charter School Cap and allows the Dormitory Authority to finance charter school capital funding for approved charter schools, and allow the Regents to appoint a temporary receiver to address chronically under-performing schools.

Grimm signed a Memorandum of Agreement in December that was submitted to the state by the January 8th deadline that makes Lansing eligible for a cut of the money if it is granted to the state.  The Board Of Education will vote on a motion later this month that indicates the district's support of the required goals.  But Grimm says it isn't that bright a note.

"It sounds exciting, but 'Race To The Top' money could mean $100,000," Grimm said.  "So they're not talking about huge sums.  But when the federal government is handing out money, if New York can get the money, even if other districts get it, it eases the strain on New York in general.  Anything like that can help us."

Meanwhile the BOE is challenged with beginning to develop a budget with even less information than usual, and decreases in revenues on all these fronts.

"It will be a very challenging budget season for us again," Grimm said.  "With the budget every single year here it is again.  It's doom and gloom.  Then we have the double whammy of finding out that our largest taxpayer is going to contribute $700,000 less -- that's kind of the same as that federal stimulus gap.  We thought that was going to fill that gap, but now we find they want to renegotiate after a bad summer.  We are going to wait until January 19th, which is when the Governor releases his numbers.  Then we'll know if we roll over the budget this is what it's going to cost and we'll be able to add up all the revenues."

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