Bethlehem Central Board hears budget kickoff with $3.8M gap, limited room under state tax cap

The Bethlehem Central School District Board of Education on March 4 heard a budget kickoff presentation that left the district facing a multi‑million‑dollar shortfall for the 2026–27 fiscal year.

John McFillips, presenting the business office’s overview, said the district’s operating budget begins with roughly $116.3 million in revenue against $120.4 million in proposed expenditures, producing “The initial gap is $4,116,000,” he said. After adjustments discussed during the meeting, McFillips said the remaining gap dropped to about $3.8 million, equivalent to a tax‑levy increase of roughly 5.1 percent under the current assumptions.

The shortfall is driven by limited revenue growth and rising costs. McFillips told the board that the district’s revenue is dominated by property taxes (about 63.6 percent) and state aid (about 30 percent), with smaller amounts from pilot payments and other sources. He said foundation aid in the governor’s executive proposal would add roughly $211,000 to Bethlehem’s budget — insufficient to close the gap.

“The tax‑cap law limits the district’s allowable levy growth to 2.61 percent,” McFillips said, adding that the maximum allowable levy increase would yield about $1.98 million — roughly half the current shortfall. He warned that the district began the 2026–27 planning year “a lap behind” because the board used about $715,000 of undesignated fund balance to balance the 2025–26 budget.

Board members and administrators focused discussion on the major expenditure drivers: health‑insurance increases, retirement contributions and utility costs. McFillips cited a roughly $3.1 million year‑over‑year increase in health‑insurance expenditures and noted employer retirement contribution rates fluctuate by state estimates. He also outlined an administrative package of small additions (nursing‑office upgrades and evacuation chairs) and reductions tied to a revised retirement estimate that together resulted in a modest net administrative decrease.

Superintendent Jody Monroe and McFillips emphasized limited flexibility on the revenue side. The superintendent noted that state proposals affecting universal pre‑kindergarten could shift responsibilities to districts if community providers cannot meet capacity, a development that could alter future program and budget calculations.

The board did not vote on any levy or budget adoption at the meeting. McFillips outlined next procedural steps and deadlines: additional budget presentations on March 4 and March 18, a public hearing May 6, candidate night May 13, and the budget vote May 19. He also reminded the board that petitions for three board seats are due April 21.

The board approved routine finance and personnel action items by voice vote during the meeting and introduced Drew, the newly appointed director of athletics and wellness, who said he will begin work this spring.