By JEFF MORRIS
At meetings on Jan. 16 and Feb. 13, the Katonah-Lewisboro Board of Education was presented with an overview of the proposed 2025-26 budget.
In the January presentation, Lisa Herlihy, assistant superintendent for business, had provided an initial look at budget conditions upon which the 2025-26 budget would be built. At that point, she noted that the district’s primary revenue source, real property taxes, comprised 85.27 percent of funding for the 2024-25 budget; it had been 85.44 percent of the 2023-24 budget. State aid was 9.3 percent of revenue for 2024-25 and had been 9.18 percent in 2023-24; use of reserves and fund balance had gone down, from 2.67 percent in 2023-24 to 2.57 percent in 2024-25, while “other” revenue, including interest earnings, sales tax and rent, had increased from 2.67 percent in 2023-24 to 2.86 percent in 2024-25.
Herlihy also noted that interest rates were expected to decrease in the coming year, though they would still be appreciably higher than they had been through 2021, so interest on the district’s money market accounts would still be a significant source of revenue.
By the Feb. 13 meeting, Herlihy had revised revenue projections based on state aid numbers included in the governor’s proposed budget. She said the district experienced a decline in enrollment from year to year, coupled with an increase in assessed value. This led to higher wealth ratios and lower state aid ratios, so expense-based aid decreased. After going through a number of other factors included in the calculations the state uses, Herlihy concluded that there will be a total reduction in state aid of $850,000, “so that will be a major hole in our revenue budget that we will have to make up.”
The Feb. 13 presentation focused on the non-instructional portions of the budget. Each of the non-instructional expense areas was discussed in some detail, including central administrative services, operations and maintenance, technology, transportation, employee benefits, and debt.
Technology was the center of a lot of attention, because the technology services budget is projected to increase 13.53 percent, going from $3,279,815 to $3,723,554. That is a considerably larger percentage increase than the other budget areas mentioned, though Herlihy pointed out that technology encompasses both instructional and non-instructional functions; she said it was decided to include it here in order to balance out the presentations. The non-instructional portion is to increase by $52,507, or 6.77 percent; the instructional portion is to increase $391,232, or 15.62 percent.
Among the components of the technology budget cited by Herlihy are over 5,000 computers, including 2,800 student devices, 1,200 faculty devices, and another 1,000 devices used in offices, labs, and as servers. She noted the department maintains a 1:1 device program in grades K-12, ensuring equal access to digital learning; specialized technology to support all learners; and over 50 different software programs. Their responsibilities also include assistive technology for special education.
Superintendent Raymond Blanch said that historically, the district had waited until the end of the year to see what fund balance was available to decide what to purchase; now, “everything is getting tighter and tighter as we go along,” so the approach is to build it into the district budget proper. “It’s just going to continue to be more of something we have to make sure is updated for our children,” he said, calling it a material change in a very unstable environment. “The technology team knows that our children and our faculty need their technology to be up and working and current. This will help us do a better job of ensuring that.”
Trustee Marjorie Schiff asked for clarification that the increase is for purchase of computers for kids as part of the computer replacement cycle. Herlihy confirmed that, noting the increase would have actually been more like $500,000, but director of technology Christopher Nelson had found ways to trim back so the increase was not as large as it could have been; she also pointed out they purchase devices and software through BOCES and receive aid for those purchases.
Employee benefits comprise a large part of the budget. Herlihy noted the NYS Teachers Retirement System is projecting a 9.59 percent employer contribution rate, which is a decrease, but because salaries are increasing, there is an overall increase of 2.09 percent, going from $5,046,698 to $5,152,100.
“We’re only able to really manage increasing the budget by a limited amount because our health insurance increased by such a small amount, by roughly 2.76 percent, for the calendar year of 2025, but we do not know what the 2026 increases are going to be,” Herlihy said. Hospital and medical insurance is budgeted for $22,449,485, up from $22,070,405 for 2024-25, a 1.72 percent increase.
Trustee Rory Burke pointed out employee benefits is, from a dollar point of view, the largest year-on-year percentage increase they’ve looked at, and most of it is attributable to health care. He asked where the district was in trying to flatten out the volatility in that area. Herlihy said there is a group that is looking at finding an alternative to NYSHIP, the current health care consortium. Blanch said he anticipated they should have an update on the potential of the new plan coming in the summer.
“This isn’t just us, it’s a statewide plan,” Blanch said. If it comes to fruition, it will more than likely start with the new calendar year in January. He confirmed that while the increase had dropped over the past six months, over a three-year period health care costs had increased about 35 percent.
Upcoming budget sessions are scheduled to include the instructional portion of the budget Thursday, Feb. 27; an overall budget presentation March 13; possible adoption of the budget March 20 or 27; a public hearing May 8; and the annual budget vote May 20.