Lack of Foundation Aid leaves Potsdam Central School underfunded, says PCS finance committee chair
To the Editor:
Like any business or household, when creating our annual budget the Potsdam Central School Finance Committee considers the amount of money coming in to the district and how much it will cost to run our schools for the coming year.School districts have primarily two sources of revenue: local taxes and need-based funding from the state called Foundation Aid. Children are entitled to a fair, appropriate education according to the NYS Constitution, and there are many laws that outline district responsibilities to the children in our community. The state helps districts financially to meet these responsibilities.
Local property taxes account for about half of the incoming funds that go towards financing our school district. All property taxes are used here, in district, and do not leave the area. The combination of relatively few properties and a high percentage of tax-exempt properties make it impossible to make up large budget shortfalls by significantly raising property taxes in Potsdam.
The BOE and administration are very sensitive to this and try to balance the district’s financial needs with residents’ financial realities. Additionally, the tax cap is linked to inflation. When inflation is low, like it is this year, the cap will be close to 0%. The tax cap in conjunction with continued cost increases forecasts another budget year with a starting deficit.
When a district cannot raise enough property taxes to meet its obligations to educate the children in the community, the state contributes Foundation Aid. Locally, that means that the other half of Potsdam Central’s operating costs comes from the state. The amount of money a district receives is based on need to a degree, but Foundation Aid has been severely underfunded for years, and during the Great Recession it was further decreased.
This is not legal or constitutional; NYS is in violation of a court order on both counts. In addition, there are many legislative and political realities that affect a district’s ability to collect revenue owed from the state. There are fewer people and much less money in the North Country. Our legislators can and do try to lobby on our behalf, but money and influence is concentrated in a few areas in NYS.
This means that the Foundation Aid formula is often politically manipulated to take money away from districts that need it and give it to those that need it less, which puts the districts who need the most help in the most financial trouble.
The combination of an over 9 million dollar loss in Foundation Aid and the inability to tax our way out of a financial crisis has led to a large reduction in staff at Potsdam Central that we are hoping to begin to reverse this year. The initial numbers coming out of Albany are not encouraging; information about how residents can help can be found in the Advocacy Toolkit linked on our district website.
Rachel H. Wallace
Chair, Finance Committee, Potsdam Central School District