Averill Park projects $1.6 million budget shortfall as state aid rise offsets by health‑care cost spikes

Averill Park Central School District officials told the board Feb. 24 the district expects a notable increase in state foundation aid for 2025–26, but that nearly all of that gain will be offset by rising health‑insurance costs and other mandatory expenses, leaving the district with a continuing budget shortfall.

The superintendent and district finance staff presented initial budget numbers for 2025–26 and walked the board through changes in the foundation aid formula and the district’s tax levy limit. “Under the current law, we’re about $5,600 per pupil for foundation aid. Under the governor’s proposal, that jumps about to $5,900, increase of $250 per student,” said Carrie (staff member), who led the finance presentation. The district’s pupil count used in the formula is 3,229; Carrie said the governor’s proposal would increase the district’s foundation aid by about $1.1 million compared with current law.

Why that matters: the superintendent and staff said health‑insurance premium increases alone are projected to add roughly $1.3 million to next year’s costs. “Our spend right now for health insurance is about $11,000,000 for the district,” Carrie said; she added that commonly quoted carrier rate increases for the district are near 10 percent, and district average costs per plan run about $12,000 for an individual and $31,000 for a family plan. The district projects roughly $1,300,000 in additional health‑insurance spending for 2025–26, which staff said largely offsets the projected foundation aid gain.

Other drivers include a roughly 1 percentage point increase in employer retirement rates for state pension systems (ERS/TRS) that the presentation showed would cost about $162,000 next year. Carrie walked the board through tax‑cap mechanics and the financial effect of the ongoing capital project, noting the district is mid‑project on a roughly $28.5 million capital program and must choose whether to issue a bond or a short‑term BAN (bond anticipation note) for permanent financing. The staff recommended issuing another BAN for 2025–26 and seeking permanent bonding in 2026–27; the district’s analysis shows a bond next year would add about $1,000,000 in principal/interest versus a one‑year BAN because permanent financing spreads principal and interest over 15 years.

The recommendation on reserves: staff proposed keeping the same strategic use of fund balance and reserves as in the current year — roughly $2.6 million — rather than increasing reliance on one‑time funds. The superintendent emphasized that even with the governor’s proposed formula changes the district remains in a multi‑year structural position that depends on choices about the tax levy, capital financing and use of reserves. “If we were to get more state aid, the in general, the recommendation would be don’t spend as much as our reserves,” Carrie said, describing how any extra aid would be used primarily to reduce dependence on reserves rather than to expand recurring costs.

What’s next: finance staff will return with a recommended budget and a list of proposed reductions and options. Staff framed the presentation as an early look at numbers and emphasized the budget calendar: recommended budget, a public discussion meeting, and then formal adoption at the statutory adoption meeting.

Clarifying details in the presentation included: the district’s projected pupil count of 3,229 used in the foundation aid formula; the projected foundation‑aid increase of about $1,100,000 under the governor’s proposal; a projected health‑insurance increase of roughly $1,300,000; and a proposed continued reliance on $2,600,000 in reserves.

Ending: Board members asked for updated scenarios as numbers are refined. Staff cautioned that the final state budget and timing can change the district’s picture and said they are planning to present a recommended budget at the next scheduled meeting so the board can consider cuts, levy choices and reserve use.