What is a contingent budget?
If residents vote down a budget in May, the board of education has two options — resubmit the same budget or a revised version for a revote on the third Tuesday in June (date set statewide); OR adopt a contingent budget.
If residents vote down a resubmitted budget, the district MUST adopt a contingent budget.
The new Tax Levy law changes contingent budgets
Under the new law, if a school budget is voted down the district is prohibited from raising the tax levy by ANY amount. In the past, school districts had to reduce expenses to meet the spending cap of a contingency budget, yet they could still raise the tax levy.
Last year, the BKW district adopted a contingency budget after two unsuccessful attempts to receive voter approval for its spending plan. Despite making significant cuts to meet the spending cap, the tax levy still increased three percent under the contingency budget.
These new rules for contingent budgets create an even more difficult circumstance for districts who must adopt a contingent budget.
Rules for contingent budgets
• Total tax levy cannot exceed total tax levy raised in prior year—a ZERO percent increase!
• All non-contingent expenses [PDF] must be cut from budget.
• The spending cap NO LONGER applies.
• The administrative cap IS STILL IN EFFECT. "The administrative component of a contingent budget may not comprise a greater percentage of the contingency budget, exclusive of the capital component, than the lesser of: (1) that percentage which the administrative component had comprised in the prior year's budget; or (2) that percentage which the administrative component had comprised in the last defeated budget presented for the subsequent year."
Here's what it means:
Contingent Admin Component divided by (Contingent Admin + Program Components) = X%
That percentage (X%) MUST be less than or equal to the percentage you get when you do the same calculation for the defeated proposal AND the 08-09 adopted budget. [It must be less than or equal to BOTH.]