Facing budgetary challenges fueled by the loss of revenue from the LIPA power plant, the North Shore School District is looking to find avenues to balance budget deficits in 2024-2025 which it says will require hard decisions to be made.
“We will continue to need to find efficiencies,” Superintendent Christopher Zublionis said. “We think this year we will have to have some hard conversations about class sizes and sections.”
He said the district’s class sizes are smaller than in other districts, but even if class sizes do decrease, the district still wants to maintain its quality of education.
The North Shore Board of Education began its discussion on priorities and challenges in formulating the 2024-2025 budget Thursday night, which will continue during its next meeting on Oct. 12.
Zublionis said there is one big question that is driving the district’s budget: “How do we create the best possible experience for students while balancing the pressures of revenue loss, rising costs and the impact on taxpayers?”
“Last year we tried really hard to make sure that any cuts weren’t seen by students,” Trustee Lisa Colacioppo said.
Zublionis said that at the center of the budget decisions are the students and ensuring that these decisions do not negatively affect their learning opportunities and experiences in the district.
“We want to make changes in a very surgical, precise way so that the students don’t even notice,” Zublionis said.
He said that last year’s budget discussions were about conquering the “mountains” ahead, whether those were mountains of clarity or mountains of costs and reaching those mountain tops.
“And then we learn that there are more mountains and there is more road in the distance,” Zublionis said. “And that’s always the case, but I can say that it is nice to start this year with a greater amount of predictability.”
The biggest budgetary impact the district has been experiencing is the LIPA settlement, which began in June 2022 when LIPA properties were taken off the tax rolls. Since then the district has been receiving direct assessments that decrease over time.
Zublionis said the first few years of decreases are rapid, but it will plateau during the 2024-2025 school year.
He said the LIPA direct assessment for next year’s budget will decrease by $2,388,670. The total loss in revenue for the district due to the LIPA settlement through 2028 is $38 million.
“That is a challenge,” Zublionis said. “But you can see the years after, that step down is much less and we would say it’s a virtual plateauing.”
When the district began its budget process for the 2023-2024 budget, Zublionis said it had a projected deficit of $10.7 million due to the LIPA revenue loss and inflation. He said this year the deficit projection looks “slightly better” but the district does not know everything yet.
He said the total deficit the district is projecting at the moment for 2024-2025 is $5.638 million.
Zublionis said based on last year’s tax levy of 2%, the tax revenue increase would cover $1.78 million of that deficit. This would mean the district would have to find an additional $4 million through cuts, new revenue and/or through the use of reserves, he said.
He said homeowners in the district have also had nearly a 30% increase in taxes over the past two decades. Due to this, the district is also sensitive about the impacts of its budget on district residents.
Zublionis said a steady increase in state aid has helped the district over the past few years, and he is hoping to continue the increase despite not anticipating it from the state.
He said one difficulty in applying for state grants is that applicants are rated on economic need and the district has about a 12% student poverty rate. He said district officials believe it is underrecorded and is actually higher, and the district auditor is looking into a more accurate figure.
Zublionis said the district is also looking to increase its revenues, which has already begun through its expansion of tuition-bearing programs like special education. This also includes students from outside the school district who pay tuition in order to participate in the school’s specialized programs.
He said the district is also considering leasing or renting spaces and facilities in the district to increase revenues.
Trustee Marianne Russo suggested that the district hire a consultant to help determine staff efficiencies and look at revenue sources and grants.
Colacioppo said that she is hesitant for the district to use a consultant, as Russo suggested, because she worries their suggestions for saving money may jeopardize the district’s educational opportunities and offerings.
“I think we can always improve, obviously,” Colacioppo said. “And I’m not sure if a consultant is the right way to go about doing it or if there are other ways that might not be as expensive to the district but might still save us money or generate revenue.”
Trustee Rich Galati said he does not see a downside to hiring a consultant as it is only advisory and does not force the district to abide by any of the suggestions.
Trustee Lisa Cashman said that external help is always useful, but that there may be other approaches that are more beneficial than a consultant.
No decision was made on the direction the district will take in consulting external budget assistance.
Despite the challenges, Galati said he is confident that the district will be able to work through it.
The board also adopted its goals for the 2023-2024 school year Thursday night, which encompasses three goals: critical analysis of instructional programs, strategic budget and financial planning, and community outreach with a focus on community engagement.
The North Shore Board of Education will convene again on Oct. 12 where it will continue discussing its budget priorities and challenges for the 2024-2025 school year.