The Watertown Daily Times reports that New York State Schools will be working with a much more restrictive contingency budget cap this year. It will not allow for 3 or 4 percent growth as it did in recent years...

Contingency budgets face stark limits for 2010-11
By Jamie Munks
Thursday, February 25, 2010

Public school officials warn voters every year that if they vote down the budget, a contingency budget will be adopted that could eliminate or reduce equipment purchases and free community use of buildings.

But the warnings usually are hollow: the state's formula for school budgets --using the U.S. Consumer Price Index -- has in the past allowed contingency budgets to almost mirror defeated budgets because the index has risen most years.

Not this year. The index declined from 3.8 percent in 2008 to minus 0.4 percent in 2009. That means contingency budget constraints will be tighter than usual, and school districts will have to face making reductions in programs, staffing and equipment purchases if budgets are defeated.

"This is the first time in a long time that the CPI has been a negative number or zero; it's always been a little bit of an increase year to year," said Barbara O. Greene, director of finance for the Jefferson-Lewis Board of Cooperative Educational Services.

"It will become challenging for schools."
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For additional details on how the contingency cap is based on the CPI see this post at the EdVANTAGE Blog.

This situation was anticipated by Governor Paterson. The 2010-2011 Executive Budget Briefing Book proposed preventing the cap from being less than the previous year's spending:

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Contingency Budget Calculation. This proposal would prevent mandatory negative spending growth for school districts that are operating under a contingency budget by limiting the spending cap calculation to no less than the previous year's spending levels. The current statutory provisions for the calculation of the contingency budget cap does not account for a period of deflation, which may apply to the 2009 calendar year.
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