Sachem budget outlook: modest state aid rise, UPK rules leave district covering a funding gap

At the Jan. 22 meeting of the Sachem Central School District Board of Education, district finance staff laid out the preliminary 2025–26 budget and said state aid rose modestly but left significant gaps for the district to close.

Finance staff member Michelle told the board they received new state aid figures the day before and that “we did see a $2,900,000 increase in our foundation aid,” but once other aid categories were factored in the district’s total state-aid increase was about $1,200,000 (0.9 percent) over the current year.

The presentation said Universal Pre-K (UPK) aid is accounted for in a separate special-aid fund and therefore cannot be used for general fund operations. The district reported UPK funding on the state runs at $3,100,000 but said it can only use roughly $2,100,000 because classroom space limits enrollment; the district estimated it must subsidize the program by roughly $220,000 from the general fund to cover the gap between the state’s $5,400 per-pupil UPK allocation and actual program costs.

Why it matters: the administration told the board that mandated or fixed costs—salaries, employee benefits, transportation, special-education tuition and other items driven by formula or legal requirements—already leave the budget with an $11,400,000 shortfall under current assumptions. The district’s unassigned fund balance has fallen from about $67,000,000 in June 2022 to $56,000,000 at the close of June 2024. Michelle reported the unassigned portion is $12,900,000, or 3.45 percent of the coming year’s budget, about $2,000,000 below the 4 percent level the law allows.

The board was also given a preliminary tax-levy calculation: after factoring 13 inputs in the cap formula, staff estimated a 2.2004 percent levy increase for 2025–26 and noted that included a roughly $9,000,000 transfer to capital (debt service and capital projects). Michelle warned the tax-cap calculation is driven by numerous inputs outside the district’s control and said, “we don't have an expenditure problem. We have a revenue problem.”

Board members asked specific questions about interest and earnings—the district’s other revenues line—and staff said they are conservatively projecting roughly $2,000,000 in investment income during July 2025–June 2026, down from earlier estimates because interest-rate forecasts have begun to fall. The presentation also noted a projected $1,000,000 reduction in interest earnings compared with recent levels, which directly affects the available fund balance.

Board discussion produced two agreed next steps: (1) draft a board letter asking state officials to increase the fixed UPK allocation or to allow districts greater flexibility to use UPK aid in the general fund, and (2) send a second board letter urging the governor and state legislature not to adopt an executive budget that leaves districts with insufficient funding. Board members discussed rallies and coordinated advocacy with other districts and urged a rapid schedule for lobbying before the state adopts its executive budget.

District staff will return to the board with capital-project recommendations and with updated revenue runs after state aid second runs are released (state guidance places the next main update in early April). The board’s next budget meeting is scheduled for Feb. 5.

Ending

The presentation emphasized the district’s constraint: most school spending is formula-driven and the administration urged public engagement and elected-official outreach if the community wants to change the gap between rising costs and available revenue.