February 21, 2006
Superintendents of Public Schools
Administrators of Charter Schools
School Business Officials
School District Attorneys
|From:||Jean C. Stevens
Interim Deputy Commissioner
|Subject:||Annual School District Budget – Presentation of Separate Propositions|
This memorandum is intended to provide guidance in response to an increasing number of inquiries from the field regarding the presentation of certain budget items as separate propositions.
With the exception of large city and special act districts, boards of education are required to present a budget to district voters in three components: an administrative component, a program component and a capital component (Education Law §§1608, 1716, 2601-a). The law prescribes the types of items to be included in each component and further prescribes that all relevant costs be included in the component. For example,
...The program component shall include, but need not be limited to, all program expenditures of the school district, including the salaries and benefits of teachers, and any school administrators or supervisors who spend a majority of their time performing teaching duties, and all transportation operating expenses (Education Law §§1608, 1716, 2601-a).
Commissioner’s regulations prescribe the items that must be included in each component (8 NYCRR §170.8). For example, §170.8(c) of the Commissioner’s regulations requires:
The program component shall include appropriations for the following accounts and functions: in-service training-instruction, teaching-regular school, programs for students with disabilities, occupational education, teaching-special schools, school library and audio-visual, educational television, computer assisted instruction, attendance-regular school, guidance-regular school, health services, psychological services-regular school, social work services-regular school, pupil personnel services-special schools, cocurricular activities-regular school, interscholastic athletics-regular school, district transportation services excluding school bus purchases, garage building, contract transportation, recreation, youth programs, civic activities, employee benefits attributable to salaries included in other accounts and functions in the program component, transfers to school lunch, school store, special aid funds, legal services relating directly to other accounts and functions in the program component.
Requiring inclusion of all such costs in each component ensures that voters will have a clear understanding of the proposed budget and how their taxes will be spent. It further enables voters to make meaningful budget comparisons from year to year (see Education Law §§1608, 1716). Including all of the enumerated costs in each required component also results in a more accurate projected tax rate, because that calculation is based solely on the proposed budget – exclusive of any separate propositions.
In addition to the promotion of full disclosure, there are other reasons why component items that are ordinary contingent expenses should not be split into separate propositions. For example, if a board is required to adopt a contingency budget, the statutory caps on the contingency budget are calculated based on the prior year’s budget and/or the defeated proposed budget (Education Law §2023). Separating out expenses that should be included in a budget component, thus, lowers the caps on a potential contingency budget and would cause a board to operate under a more restrictive contingency budget than otherwise would be required. In addition, under the language of Education Law §2023(l), a board may be forced to adopt a contingency budget if any portion of an ordinary contingent expense is placed before the voters in a separate proposition and defeated, notwithstanding passage of the main budget proposal.
Boards of education should therefore avoid presenting separate
propositions for items enumerated for inclusion in one of the budget components.
Such practice makes it more difficult for taxpayers to understand the true cost
of a district’s educational program and has the potential negative effects