TONTOGANY – While Otsego Local Schools has been able to cut spending this year, deficit spending is
projected for the next five years.
Treasurer Steve Carrol said in his five-year forecast that the pandemic has created costs otherwise
unnecessary, has reduced state funding and has made income tax collections less predictable that in past
years.
Carroll is expecting a 1% drop in revenues from last year to this year and has projected slight growth
over the next five years from $16.25 million to $17.19 million.
The district gets 28% of its revenues from property taxes, 19% from income taxes and 37% in state aid.

Property tax collection is expected to drop 1% due to delinquent taxes. Carroll said the district should
eventually collect this money.
Property tax revenue is projected at $4.47 million this fiscal year (down from $4.52 million last year)
and is projected to increase to $6.65 million in fiscal year 2025.
Despite a huge swing in income tax payments in early 2020 – the first payment was down 31% from last year
but the second payment was up 46% — return to steady growth hinges on the progress of the local economy
as well as the number of new homes built in the district.
Receipt on the district’s 1% income tax is expected to be $3.08 million this year and $3.46 million in
fiscal year 2025.
Carroll is projecting an increase in state aid over the next five years from $5.33 million to $5.66
million.
Fortunately, he said, there is a large increase in open enrollment revenue with growth of over $250,000
this year to $974,414. Money lost to students leaving the district totaled $346,376 for a net gain of
$628,038.
Pipeline revenue also is less than initially expected as NEXUS has appealed its valuation and is
currently paying 35% of what the district was initially told it would receive, or $620,000 less than
expected.
NEXUS income jumped $241,555 to $939,735 this fiscal year as the county collected two payments from the
pipeline. As value depreciates, those payments will decrease to an expected $881,176 in fiscal year
2025. If the original valuation stands, Otsego is expected to receive $1.1 million annually.
Carroll said that if the appeal ends in the district’s favor, all unpaid money will be collected.
Expenses are expected to exceed revenue every year of the forecast.
Salaries make up 56% of the budget and are expected to drop nearly $200,000 this year due to pay
concessions and retirements. However, this budgeted item increases every year from $9.16 million this
year to $10.53 million in fiscal year 2025.
Twenty-two percent of the budget goes to benefits and Carroll said he expects insurance costs to increase
in coming years. Amounts expected to be paid are $2.27 million this year and $2.46 million in fiscal
year 2025.
While supplies and materials only account for 3% of the budget, there was an increase of about $90,000
this year in order to clean the buildings due to the pandemic. Grant money was used to cover many
COVID-19 related expenses. This line item jumped to $600,103 this year after years of reductions and is
expected to increase annually to $665,551 in fiscal year 2025.
Total expenses are projected to be $16.42 million in fiscal year 2021 and $18.89 million in fiscal year
2025.
Carroll expects the district to operate in the red for the next five years, from $174,828 this year to
$1.69 million in fiscal year.
Consequently, the district’s cash balance is wiped out by fiscal year 2025 after starting this fiscal
year at $3.99 million. The projected negative balance in fiscal year 2025 is $1.15 million.
The forecast was approved at the November board of education meeting.