Auditor: Rough waters ahead for Central District financially

Alan Yu, a certified public accountant with Cullen & Danowski in Port Jefferson Station, offered a sobering view of the Bellmore-Merrick Central High School District’s finances during a Board of Education meeting last Wednesday.

Yu, who is the district’s outside auditor, noted that Bellmore-Merrick’s books are in order, but in the coming year to three years, the district can expect to be hit by flat or decreasing state aid, at the same time that federal stimulus money that the district has received in recent years will dry up.

The Central District’s 2011-12 budget amounts to roughly $127 million.

District officials had hoped for some restoration of state aid, which has been cut by millions of dollars in recent years. Yu dashed those hopes, saying that no restoration is expected for 2012-13. “They may even cut state aid further,” he said.

At the same time, according to Yu, the district’s contributions to the Employee Retirement System and the Teachers’ Retirement System are expected to skyrocket in the coming years, costing the district hundreds of thousands, even millions of dollars.

In past years, the district has been able to tap into its reserve funds and to increase property taxes to make up for lost state aid and increased expenses. In the coming years, however, the Central District will be unable to increase the property-tax levy more than 2 percent without voter approval, as per a new state property-tax cap that will take effect in the 2012-13 school year. The levy is the total amount that the district must collect in taxes to meet expenses. The only way that the district will be able to avoid the cap is if 60 percent of voters in an election agree to override it and spend more in property taxes.

It’s unclear at this point what type of budget the Central District Board of Education will present to the public in the spring –– that is, whether the board will offer a budget that stays within the cap, or one that exceeds it, in which case the district would need to secure a super-majority of the electorate to pass it.