Hudson’s schools, including Montgomery C. Smith Elementary School, above, face a multimillion-dollar budget gap for 2026-2027. The incorrect use of financial software is partially to blame, the interim superintendent said.
Roger Hannigan Gilson/Times Union
HUDSON — The Hudson school board is trying to find cuts to fill a multimillion-dollar gap before submitting its proposed budget to the state on April 24.
Without cuts, spending is expected to rise about 7.8% for the 2026-2027 school year, a figure that would require a large increase in school taxes and for the district to spend a significant amount of its unassigned fund balance — excess money that is supposed to serve as a rainy day fund.
Article continues below this ad
But the situation is worse than that. Even if the school board were to approve a budget that would raise taxes by the maximum allowable amount this year — 5.8% — and spend the maximum amount of the unassigned fund balance, the district would be $2.58 million short, or more than 4% of the total proposed budget of $63.1 million.
The situation was laid out to the school board by interim Superintendent Brian Bailey over the course of five meetings beginning Jan. 20.
Bailey described the increase in costs as a confluence of problems, some of which are being felt by schools around the state, some of which are unique to Hudson.
Make the Times Union a Preferred Source on Google to see more of our journalism when you search.
Add Preferred Source
The district started using the financial planning software WinCap, broadly used in New York and New Jersey schools, in 2016. However, the district did not do all the onboarding for the software and used it incorrectly, and failed to record some new hires using the program.
Article continues below this ad
“Every time the district created a job and didn’t speak to the (school) board for whatever reason, and hired someone and didn’t record that on WinCap … there’s the potential that (new) person has never been accounted for in a budget,” Bailey said during the Jan. 20 meeting, later adding he “can’t explain why” this happened.
Bailey, who has only been leading the district since August, said those employees were accounted for in the payroll and received paychecks, but their salaries were not reflected in the budget. These mistakes were rolled over into subsequent budgets, he said.
The total amount in salaries not accounted for in previous budgets was not immediately clear on Thursday.
Some of the district’s other financial problems are more systemic. Increases in health care costs amounted to an additional $800,000 in the proposed budget. The cost of retirement benefits also grew.
Article continues below this ad
“This is every school district,” Bailey said at a March 17 meeting. “The insurance costs and retirement benefits (are) becoming the focus of every budgetary conversation, and something that’s untenable for us, and obviously for probably any business that offers benefits to its employees.”
A $1.2 million grant will also not be available next school year. Also, state aid — which accounts for half of the budget — remains flat.
It is now up to the school board to decide how large a tax increase to propose, how much of the unassigned fund balance to use, and what cuts to make.
At the most recent meeting, on March 24, school board member Diana Howard summed up her feelings.
Article continues below this ad
“I’m just in panic mode right now,” she said.
Howard appeared to have little appetite for recommending a budget that would require a significant tax increase. She pointed out that Hudson had just completed a reassessment of city property values, which raised taxes for many, and she did not want to pile on an additional tax burden for residents.
“Retired people don’t have a lot of money, and I’m here representing those people,” Howard said.
If the board’s proposed budget requires a tax increase of the maximum allowable amount, the owner of a $200,000 home in Hudson would pay $138 more in annual taxes, while homeowners in Claverack would pay $209 more in annual taxes for a $200,000 home. (The Hudson City School District spans all or part of seven municipalities.)
Article continues below this ad
The board must consider the pocketbooks of district residents in preparing a budget, as they could reject the budget when it comes up for a vote on May 19.
School Board Vice President Matthew Mackerer said during the March 24 meeting that he did not want to spend the maximum amount of the unassigned fund balance, as that money would be unavailable the next year, when costs would still be high. He said he was more amenable to using half the max amount, or $1.8 million.
In any scenario, there will have to be cuts.
“This is the worst thing I have to say — there is no choice,” Bailey said at the latest meeting. “There’s no choice to say, ‘I think this is important, I don’t want to get rid of it.’ This is a very difficult, awkward place where there isn’t a choice — so it is, ‘which is the least harmful choice? ‘”
Article continues below this ad
The board discussed consolidating regular bus routes, decreasing school staff through attrition, and offering incentives for additional staff to retire. It also considered cutting costs by not allowing additional students to attend specialized schools, such as BOCES or the Bard Early College program, though students already in the multiyear programs would continue to attend.
Laura Bender, the president of the Hudson Teachers’ Association, said instructors’ “big concern is the continuity of programming for our students.”
Speaking of the pending cuts, she said teachers “know that those reductions are going to have an impact on classrooms across the district.” Teachers do not have a say in the budgetary process, she added.
Article continues below this ad
A spokesperson for the Hudson City School District did not answer questions by press time.
Hudson School Board President Mark DePace asked the district to prepare plans for cutting $2.5 to $4.5 million from the proposed budget, allowing for different options with tax increases and using the unassigned fund balance, before the next meeting on April 14.