Bedford school district officials are possibly looking at filling a $2 million hole in next year's budget thanks to anticipated increases in state retirement system contributions.

The news came after state Comptroller Thomas DiNapoli's announcement last month that the contribution rates for the New York State Common Retirement Fund would increase in 2011-2012. The average contribution rate for the Employee Retirement System will increase from 11.9 percent of salaries to 16.3 percent.

For Bedford schools, that means contributions to the state retirement system could increase by more than $2 million.

"We have the estimated employee retirement rates for the next year, but not the official teacher retirement rates," said Mark Betz, the assistant superintendent for business and administrative services."We won't see those until November some time.  I believe the ERS will cost us about $700,000 more and the TRS, if those rates increase as much as the ERS rates did, will [increase] somewhere between $1.2 million to $1.4 million."

DiNapoli credited the increases to the recession that gripped the nation in 2008. Although many economists have said the recession is over, they have warned that recovery is going to be slow.

"We handled the meltdown better than most pension funds, but we're still feeling the impact, and, as I have consistently cautioned, the employer contribution rates I'm announcing today will reflect the impact of the financial crisis,"  DiNapoli said in a statement.

Although $2 million is less than two percent of this year's budget of $116,481,460, it is still represents a lot of money for the district to make up given the economic climate that has existed for school districts locally and across the state.

The Bedford school eliminated nearly 20 teaching positions last year to craft this year's budget, which represents a 1.71 increases over last year's budget. The district had to go to a contingency budget in the 2008 school year after two budget proposals were voted down in  public vote.

In June, the school board voted to add about $1.5 million to a reserve fund for ERS. That reserve fund was set up to help pay for any sudden increases in contributions that could come up. The law precludes districts from setting up reserve fund for TRS.

"The newly proposed budget for next year will have to absorb the TRS increases," Betz said.

In addition to the retirement system, the district has also been alerted that it will see a a reduction of nearly $36,000 in regular state aid and a reduction of about $80,700 from the state's reimbursement of the STAR program.

The STAR program is a state program designed to offer homeowners assistance paying their property taxes.

The district is scheduled to receive about $6.5 million in state and other aid in this year's budget.

"We had already reduced our State Aid budget during the budget process for other pre-planned cuts," Betz said. "These cuts were not planned.  I will not be surprised if the state makes other unplanned cuts during the year.  Right now I don't expect these cuts to have a major impact. However, any further cuts might mean a reduction in what we can continue to plan in program."