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Projected budget shortfalls in Potsdam, Canton exceed $2.5 million

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CANTON - Neighboring school districts Potsdam and Canton have something in common that neither community will be celebrating.

Both school districts face budget shortfalls next year of more than $2.5 million, according to Canton School Superintendent William A. Gregory, who shared the dismal news Thursday evening with his school board.

The Canton and Potsdam communities are in the midst of an extensive merger study to explore the feasibility of combining the two districts. As an incentive to merge, the state would provide an extra $35 million to the two districts over the next 14 years.

Based on state aid revenues allocated by Gov. Andrew M. Cuomo in his proposed 2014 state budget, Canton faces a $2,588,842 shortfall next school year, while Potsdam is looking at a $2,501,671 gap, Mr. Gregory said.

“We will be forced to decimate our program,” he said. “I wish I had a better picture, but that’s the fiscal reality.”

Since the state implemented the gap elimination adjustment in 2009-10, Canton has lost $10.5 million in state aid while Potsdam’s aid has decreased by $10.7 million.

Statewide, the average per-pupil cut is $2,895. In Canton, the per-pupil cut is $7,910 and in Potsdam, it’s $8,023, based on Mr. Gregory’s figures.

“The impacts have been direct and significant,” he said.

Unless state lawmakers allocate more money to public schools as they haggle over the budget, Canton school district may be forced to consider borrowing money to cover expenses, he said.

During public comment, former school board member Phillip J. Burnett Sr. said it’s disturbing that the state doesn’t have a game plan for when school districts are near bankruptcy.

“It might be time to call their bluff and say we can’t pay our bills,” Mr. Burnett said.

Mr. Gregory said the other revenue options — raising property taxes, cutting staff and programs, and commiting significant money from reserve funds — are no longer viable options.

They’ve been used in the past to close budget gaps, but reserves are down and a total of 100 jobs have been cut at the two districts. Erasing the projected gap at Canton with property taxes alone would require a tax increase of 30.8 percent, while Potsdam would require a 21.2 percent hike.

“Obviously, this won’t work,” Mr. Gregory said.

As of June 30, Canton’s unreserved fund balance was $782,104 while Potsdam’s was $1,366,239.

Staying within the state’s 1.46 percent cap on tax increases would generate a maximum of $122,640 for Canton and $172,280 for Potsdam.

Costs for Canton are projected to increase by $1.4 million, according to a preliminary $25.7 million budget for 2014-15 school year. The largest hike is a $687,123 increase for employee benefits including retirement and health insurance, followed by $402,753 more for St. Lawrence-Lewis Board of Cooperative Educational Services contributions and $151,090 for salary hikes.

Depending on the outcome of the state budget, Mr. Gregory said Canton may be forced to make cuts in non-mandated programs, beginning with its entire athletic program, followed by kindergarten and pre-kindergarten. Class sizes could swell to the 30s and 40s in all schools.

He predicted the district would see an increased number of at-risk students and a higher dropout rate and would be out of compliance in providing special education, Title I, academic intervention and other mandatory services.

Non-mandated programs and services now offered in Canton include: athletics, extracurriculars, prekindergarten, kindergarten, art, music, guidance service for elementary students, information and technology sciences, one of the two foreign languages, family consumer science, agriculture, school pool, and transportation within a specified distance from school.

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