Budget Development Process & Glossary

A school district’s budget is the biggest investment a community makes with its tax dollars. Schuylerville Central Schools Business Office staff strive to make the most effective use of resources to benefit students, to develop and manage the school budget in a responsible and transparent manner and to be accountable to our taxpayers. 

Annual Budget Vote and School Board Election Timeline

Under New York law, school budget votes and elections occur on the third Tuesday in May, unless there is a conflict with a religious observance. 

See a timeline how school budgets in New York State are developed.

Glossary

Below are explanations of various budget terms. If you have any questions, please call the Superintendent’s Office at (518) 695-3255, ext. 3242.

Appropriated Fund Balance: Any portion of a district’s fund balance from the previous fiscal year that is used as revenue in the district’s following year’s budget. This reduces the amount of money that must be collected in taxes.

Base Proportions: Base proportions determine how the tax burden is distributed between residential and commercial properties in the town. Changes in the base proportion do not change the overall tax levy, but instead change how much of the tax levy is paid by homeowners and how much is paid by owners of commercial properties. Base proportions are determined by the New York State Office of Real Property Services (ORPS).

Board Budget: The spending plan adopted by the Board of Education.

Bond: Money borrowed to pay for a school district expense. Typically, the money is used for capital expenses, including the purchase of buses or the construction or renovation of a building. The goal in borrowing is to spread the cost out over a period of years and lessen the cost to taxpayers in any one year. By definition, a bond is a written promise to pay a specific sum of money by a specific date in the future together with interest costs.

Budget: A plan estimating the proposed expenses for a fiscal year and the proposed means for paying for those expenses.

Budget Cap: School districts working under a contingent budget may not increase spending by more than 120 percent of the Consumer Price Index (CPI) or 4 percent, whichever is lower (i.e., the spending is “capped.”) Some areas, such as paying for debt, are excluded from this cap.

Capital Outlay: An expense that is generally more than $20,000 and results in the ownership, control or possession of assets intended for continued use over long periods of time. These can include new buildings or building renovations and additions; new school buses; new equipment (i.e., desks, computers, etc.) and library books purchased for a new or expanded school building.

Consumer Price Index (CPI): An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period. Also called “cost-of-living” index. However, the CPI does not take into consideration the many of the items that cause school district budgets to rise, such as the increasing cost of health insurance, liability insurance and retirement contributions.

Contingent Budget: Under state law, school boards can submit a budget to voters a maximum of two times. If the proposed budget is defeated twice, the board must adopt a contingency budget. The school board also has the option of going directly to a contingent budget immediately after the first budget defeat. Under a contingent budget, the district may not increase spending by more than 120 percent of the Consumer Price Index or four percent, whichever is lower. The items exempt from this cap are tax certiorari settlements, debt service (mortgage payments) and costs associated with enrollment growth. Under a contingent budget, the percentage of the budget devoted to administrative costs cannot increase from what it was in the prior year’s budget or the last defeated budget, whichever is lower. Once a contingent budget is established, community residents are no longer allowed to petition boards of education to put additional items up for a separate vote.

Employee Benefits: Amounts paid by the district on behalf of employees. These amounts are not included in the gross salary. They are fringe benefits, and while not paid directly to employees, are part of the cost of operating a school district. Employee benefits include the district cost for health insurance premiums, dental insurance, life and disability insurance, Medicare, retirement, social security and tuition reimbursement.

Equalization Rate: In simple terms, an equalization rate represents the average level of assessment in each community. For example, an equalization rate of 80 means that, on average, the property in a community is being assessed at 80 percent of its market value. The words “on average” are stressed to emphasize that that an equalization rate of 80 does not mean that each and every property is assessed at 80 percent of full value. Some may be assessed at lower than 80 percent, while others may be assessed at higher than 80 percent. Equalization rates are established by the New York State Board of Equalization and Assessment. School districts that comprise more than one city, town or village must use the equalization rate to determine the tax rates for each municipality. The purpose is to bring some semblance of equity to how the taxes are distributed in any one school district, so that ideally a home with a full market value of $100,000 in one community will pay the same taxes as a home with a market value of $100,000 in the next community, regardless of how those two homes are assessed.

Expenditure: Payment of cash or transfer of property or services in order to acquire an asset or service. Simply put, in school budgets, this is where money is spent.

Fiscal Year: A fiscal year is the accounting period on which a budget is based. The New York State fiscal year runs from April 1 to March 31. The fiscal year for all New York counties and towns and for most cities is the calendar year. School districts in New York State operate on July 1 through June 30 fiscal years.

Fund Balance: A fund balance is created when the school district has money left over at the end of its fiscal year from either under spending the budget or taking in additional revenue. Part of the fund balance (“appropriated fund balance”) may be applied as revenues to the district’s following year budget. A portion may also be set aside (“unappropriated fund balance”) to pay for emergencies or other unforeseen occurrences. You can think of unappropriated fund balances as “rainy day funds.”

Fundamental Operating Budget (FOB): The total amount of money required to pay for current-year programs, staffing and services at next year’s prices—i.e., what next year’s budget would be if the current year’s budget were simply “rolled over.”

Homestead: Residential properties.

Non-Homestead: Commercial properties.

Plain Language Budget Document (also called “Three-Part Budget”): A detailed list showing the expenses a school district is proposing in the budget plan going to voters. By law, districts must divide their budgets into three categories—administrative component, capital component and program component—and must show how much each component has increased compared to the total budget. New York State law requires this document to be available to all residents. You can view a copy of Schuylerville’s plain language budget by stopping by the Administration Building on the Schuylerville Central School District campus. A further definition of the three components is as follows:

• Administrative Budget Component: Includes expenses for office and administrative costs; salaries and benefits for certified school administrators who spend 50 percent or more of their time performing supervisory duties; data processing; public information; legal fees; property insurance; and school board expenses.
• Capital Budget Component: This covers all school bus purchases, debt service on buildings, and leasing costs; tax certiorari and court-ordered costs; and all facility costs, including salaries and benefits of the custodial staff; service contracts, maintenance supplies and equipment; and utilities.
• Program Budget Component: This portion includes salaries and benefits of teachers and supervisors who spend the majority of their time teaching; such instructional costs as supplies, equipment and textbooks; co-curricular activities and interscholastic athletics; staff development; and transportation operating costs.

Revenues: Where the money comes from to pay for school district operations. In Schuylerville, the main sources of revenue come from state aid and property taxes.

Salaries: The total amount paid to a staff member, before deductions, for services rendered while on the district payroll.

STAR: The New York State School Tax Relief (STAR) Program provides exemption for school taxes for all owner-occupied, primary residents, regardless of income. Senior citizens who meet income requirements may qualify for an enhanced exemption.

State Aid: State Aid is additional money that the state gives to districts, to be used in different areas, such as lowering the tax levy, etc. Until the state passes its budget, the district does not know exactly how much to expect in state aid, but school districts are still required to present their budgets to voters on the third Tuesday in May. To meet that mandate, the district had to estimate its state aid revenues.

Supplies: Consumable materials used in the operation of the school district including food, textbooks, paper, pencils, office supplies, custodial supplies, material used in maintenance activities and computer software.

Support Services: The staff, activities and programs that enhance instruction. This includes attendance, guidance and health programs; library personnel and services; special education services provided by speech and language pathologists, physical therapists and occupational therapists; professional development programs; transportation; administration; buildings and ground operations; and security.

Tax Base: Assessed value of local real estate that a school district may tax. In Schuylerville the business tax base is small, while the tax base of residences is large.

Tax Certiorari: A legal process in which a property owner can challenge the real estate tax assessment on a given property in attempt to reduce the property’s assessment and, in turn, the real estate taxes.

Tax Levy: The total sum to be raised by a tax, or the legislative measure by which an annual or general tax is imposed. In Schuylerville, the tax levy would be the total tax payments collected by the district from property owners in all the counties that make up our school district.

Tax Rate: The number used to calculate the taxes that each individual property owner will pay. This amount is usually outlined in $1,000 increments and based on the assessed value of property.

Three-Part Budget (also called “Plain Language Budget”): A detailed list showing the expenses a school district is proposing in the budget plan going to voters. By law, districts must divide their budgets into three categories—administrative component, capital component and program component—and must show how much each component has increased compared to the total budget. See the definition above for plain language budget document for more details.

Unappropriated Fund Balance: A school district is permitted to keep up to two percent of its fund balance in an unappropriated fund. This money may be used to pay for emergency repairs and other unforeseen occurrences. You can think of unappropriated fund balances as “rainy day funds.”