The answer is still no. While our school officials have talked about reasons (or excuses) for the past inaccurate financial projections, these reasons don’t begin to explain the discrepancy between the projections and the actuals. That is because they have not addressed the real issue: that the so-called long range projections are, in fact, not realistic projections at all; they are rather hyper-catostrophic worst case scenarios.

The previous Do long range plans provide accurate predictions? post and its predecessors provided 39 examples of long-range school district financial projections that predicted fiscal catastrophes that never happened. I discussed the content of that post at the April 29 combined school district meeting. My presentation did not receive any response from district officials at the meeting. Both school superintendents did, however, provide comments in a subsequent newspaper article published in the May 3 Amsterdam Recorder. (1) This post is my response to the inaccurate and misleading statements quoted from our superintendents in that article.

The superintendents did not respond to the three projections from around 1983, the two from 1993, or the 32 covered in the What happens when schools reject a proposed merger? post. Their inadequate and misleading excuses addressed only the 2011 and 2020 Fort Plain Central School long-term financial projections. Both of those projections predicted fiscal disasters, but the actual experience was growing fund balances.

The superintendents’ quoted excuse for the discrepancy in 2011 long range plan is Gap Elimination Aid restoration; and in 2020 the excuse for the discrepancy is additional federal aid related to Covid. So, let’s look to see if those claims hold true. The 2011 long range plan directly addresses the Gap Elimination Adjustment, but not the GEA restoration; that aid didn’t yet exist when the plan was written. So how much GEA restoration aid did Fort Plain receive between 2011 and the end of the 2015/2016 school year, the final year covered by that long range plan? According to data on the website budget.ny.gov, that total was less than $1 million. In other words, it was an entirely insignificant part of the $14,7 million that the projection was off. Similarly, concerning the 2020 financial plan, Fort Plain received a total of $4.2 million in Covid ARPA aid. As detailed in this Fort Plain school web page, much of that was spent on Covid-related supplies and other special, one-time purchases. But even if the entire $4.2 million contributed to ordinary operating expenses and fund balance, the projection was still pessimistic by $14.3 million, meaning Covid had very little to do with the discrepancy between the projections and the actuals. That is because the real reason for the discrepancy has little to do with Covid or with GEA restoration. The real reason is structural and systemic, and is built in to the projection methodology.

School budgets almost always contain underestimated revenue and over-estimated expenses. This is built in structurally by law and by comptroller’s regulations dictating that, ordinarily, schools can not spend more than the total approved expenditure budget. (2) This phenomenon is documented by the comptroller’s office, (3) and by school research. (4) (5) Because of that budgeting anomaly, schools nearly always end their fiscal year with more net gain (or less net loss) than was projected. Long range financial plans amplify that built in annual discrepancy. So school district long range projections are virtually always profoundly pessimistic. I would like Dr. Timbs to publish a paper comparing all of his projections to the eventual actual data. There is no doubt whatsoever as to what the results would be. They would be the same as for the 2011 and 2020 plans done for Fort Plain.

The excuses shared by our superintendents in the Recorder as to why the past financial projects were so profoundly wrong are simply false. The data indicates that the past financial projections were entirely inaccurate even when the inadequate excuses are factored in. The current long-range projection, like all of the past projections, is entirely unreliable. In fact, all of the school district provided information on the proposed merger is profoundly misleading and inaccurate. This website is full of documented, peer reviewed data showing the falsehoods in the pro-merger propaganda.

The conclusion of the previous analysis holds. There is no valid financial reason to merge schools. Our school districts’ future financial predictions have no credibility at all.