Increased State Aid Strengthens District’s Financial Position and Helps Keep Up With Costs

The final state budget that legislators adopted in early April contained a state aid increase for Niskayuna of $3.7 million and a promise that all districts in the state will receive their full amount of Foundation Aid due by law in 2023-24.

The state aid increase for next year helped the district cover growing costs, reduce its reliance on fund balance or savings, and limit the tax levy increase to 1.17 percent. The fact that spending is increasing by $2.3 million in the proposed budget while the tax levy is going up by $696,000 illustrates how critical the state aid increase was to helping the district cover projected expenses.

What about the remainder of the state aid increase? Amid other factors, the increased state aid helped the district reduce its reliance on fund balance to cover ongoing costs. In the current year, the district budgeted about $4.6 million in fund balance to close a gap between revenue and expenses. For next year, the district was able to reduce this number to $2.7 million. This is a positive development because it puts the district in a stronger financial position and increases its ability to sustain programs and services for students, especially if times get tough or future Foundation Aid increases do not come through as promised. Using too much fund balance to support recurring expenses is like using savings to support a household budget; it may be necessary in extraordinary circumstances, but they should not generally be used to fund everyday expenses.

The state aid increase and decisions made through the budget process helped the district become more sustainable in the long term and adjust to a year when the tax levy limit of 1.17% was well below what it has been in recent years.