Scarsdale Superintendent Michael McGill hasn’t lost a school budget vote since he arrived to lead one of the nation’s top school districts in 1998. And he’s been told the last Scarsdale budget defeat occurred back in the 1970s.
A day after the 2013-14 budget was defeated, McGill said school officials will step back and reassess its financial plan for the upcoming school year as they decide upon a new proposal that voters will decide upon on June 18.
In a phone interview with Tax Watch Wednesday morning, McGill acknowledged that budget opponents ran a better campaign.
“Truth to tell, we did not send out clear, consistent messages since back in January, and those opposed were well-organized, with a clear and simple message. They did a better campaign.”
Scarsdale was among four districts in the lower Hudson Valley looking to override the state’s tax-levy cap, which required approval by 60 percent of the electorate. Ardsley and Irvington persevered. Briarcliff Manor and Scarsdale lost. Scarsdale’s budget would have gone down, regardless of the super-majority rule, with the proposal winning just 47 percent of the vote.
Two issues loomed large: the district’s decision to exceed the tax cap by $700,000, and its plan to spend $325,000 to expand the high school fitness center. Opponents said the fitness center was a luxury – even for the well-heeled Scarsdale residents, where it’s not unusual for homeowners to pay $20,000 in school taxes.
The tax cap allowed Scarsdale to raise its tax levy by 3.38 percent. The proposal called for a 3.93 percent hike.
“Overriding the tax cap was ambitious, and doing the fitness center was ambitious,” McGill said. “Put the two together, and it was a very heavy lift.”
The fitness center, however, was a capital expense, and didn’t fit into the tax-cap calculation. What caused Scarsdale to exceed the cap was its decision to reduce the amount of surplus applied to the budget, and a rise in employee pension costs of $2.4 million.
“We are trying to wean ourselves from depending on surpluses as income,” said McGill. “We’re concerned that if it’s not next year, then the following year, we won’t have enough.”
In the 2012-13 budget, Scarsdale used $6.3 million in surplus, and $250,000 from reserve accounts to stay with the tax cap, said Linda Purvis, assistant superintendent for business. For the 2013-14 budget, the district proposed using $4.3 million from surplus, and $912,000 in reserves.
McGill said the school board will now have to decide how to move forward. It has two choices to come within the cap: cut expenses or use more from its surplus or reserves. He expects the school board will schedule a meeting soon to discuss its options.
The district has money in its surplus and reserve accounts to cover the $700,000 shortfall. Purvis said there’s $11 million in various accounts, including $4.8 million in undesignated fund balance. But whether they’d do so remains to be seen.
“We could use the savings, but then you create a hole for next year,” Purvis said. “If you are spending beyond your ability to pay, you will eventually run out. The bottom line is that you have to cut costs. But that’s a decision that the school board will make.”
Photo: Scarsdale Schools Superintendent Michael McGill