Tax cap misunderstood, making it difficult for school boards
SHERBURNE – The public’s perception that their property taxes can’t increase by more than 2 percent is making it difficult for at least one school district in Chenango County.
During budget-setting meetings this quarter, the Sherburne-Earlville Board of Education asked administrators to keep any budget increase to a maximum of $130,000, or just under the New York State imposed 2 percent cap. For the current school year, taxpayers agreed to a $29.5 million spending plan that called for an average tax levy increase of 1.9 percent. The board expended $1 million from set-aside reserves to stay under the cap, which went into effect for the first time in June 2011.
But spending down set-aside reserves to stay within what is being perceived as state law is not necessary, said SECSD Assistant Superintendent Todd Griffin. “No board nor administration wants to put an excess burden on their taxpayers, nor do they want to do it to themselves, but the public’s perception that government entities must keep increases within the 2 percent cap is inaccurate,” he said.
Chenango County Real Property Tax Services Director Steve Harris explains that Albany’s historic new law is not actually a directive. Communities may raise or lower property taxes according to the needs of the locality. If the taxpayers want to pay more taxes they can, and they can override the cap with a 60 percent vote for schools and by a 60 percent vote of the governing body for local governments. Towns, counties and villages can even pass local laws saying they want to exceed the cap. Or, they could just exceed it and roll over the amount into a reserve account and apply the amount plus interest to the next year’s budgets before determining the levy.
Harris said taxpayers expect to pay less than a 2 percent increase now. Many have come to his office at the County Office Building to protest their bills that are more. He said the comptroller’s formula for coming up with property taxes is difficult to explain.
“There are different adjustments, PILOTs (Payment In Lieu of Taxes agreements) taken out and added back in, growth factors, the way equalization rates are proportioned ... a lot of items that adjust the level so some towns could be under and come could be over the 2 percent,” he said.
Griffin said he is in the midst of plugging in numbers released with the New York State budget last week. He said the district could receive as much as $150,000 more in foundation aid this year, but funds for special education services, hardware and technology, software, library and textbooks are down. He laughed when revealing $23 more alloted for transportation.
Like last year, it’s possible more teachers and or programs will be cut. Thirteen jobs were eliminated, including one administrator, with last year’s budget.
“We are coming through and identifying areas where we can cut back and reduce and try to save positions. We are trying to get as creative as possible,” he said. “I don’t really understand what good it does to consistently, year after year, cut all of your core teachers. They are the people teaching the kids.”
Griffin characterized fringe benefit increases as “major, major dollars” and “frustrating.” The problem is the nearly 19 percent hike required to afford the district’s contract for the 2012/2013 school year with the Employees’ Retirement System will eat up the board’s spending goal all by itself. The Teacher’s Retirement System contract is estimated to increase by 12 percent and employees’ health insurance plans by at least six percent.
“The retirement system increases are controlled by Albany. This isn’t some magic thing, they set the rates. Then, they set limits on what type of money you can raise and then set the limit on what kind of aid you can get,” he said.
Thankfully, fuel prices were locked in a last year before prices sprung up, he said.
Acting school board President Tom Morris pointed to another budgeting difficulty facing the district. The board is currently in the midst of negotiations with all three labor unions. “Unfortunately the state and local entities have to practice some sort of restraint and fiscal responsibility. While the 2 percent increase can be altered, it will be unwise. The future is uncertain, especially next year,” he said.
During budget-setting meetings this quarter, the Sherburne-Earlville Board of Education asked administrators to keep any budget increase to a maximum of $130,000, or just under the New York State imposed 2 percent cap. For the current school year, taxpayers agreed to a $29.5 million spending plan that called for an average tax levy increase of 1.9 percent. The board expended $1 million from set-aside reserves to stay under the cap, which went into effect for the first time in June 2011.
But spending down set-aside reserves to stay within what is being perceived as state law is not necessary, said SECSD Assistant Superintendent Todd Griffin. “No board nor administration wants to put an excess burden on their taxpayers, nor do they want to do it to themselves, but the public’s perception that government entities must keep increases within the 2 percent cap is inaccurate,” he said.
Chenango County Real Property Tax Services Director Steve Harris explains that Albany’s historic new law is not actually a directive. Communities may raise or lower property taxes according to the needs of the locality. If the taxpayers want to pay more taxes they can, and they can override the cap with a 60 percent vote for schools and by a 60 percent vote of the governing body for local governments. Towns, counties and villages can even pass local laws saying they want to exceed the cap. Or, they could just exceed it and roll over the amount into a reserve account and apply the amount plus interest to the next year’s budgets before determining the levy.
Harris said taxpayers expect to pay less than a 2 percent increase now. Many have come to his office at the County Office Building to protest their bills that are more. He said the comptroller’s formula for coming up with property taxes is difficult to explain.
“There are different adjustments, PILOTs (Payment In Lieu of Taxes agreements) taken out and added back in, growth factors, the way equalization rates are proportioned ... a lot of items that adjust the level so some towns could be under and come could be over the 2 percent,” he said.
Griffin said he is in the midst of plugging in numbers released with the New York State budget last week. He said the district could receive as much as $150,000 more in foundation aid this year, but funds for special education services, hardware and technology, software, library and textbooks are down. He laughed when revealing $23 more alloted for transportation.
Like last year, it’s possible more teachers and or programs will be cut. Thirteen jobs were eliminated, including one administrator, with last year’s budget.
“We are coming through and identifying areas where we can cut back and reduce and try to save positions. We are trying to get as creative as possible,” he said. “I don’t really understand what good it does to consistently, year after year, cut all of your core teachers. They are the people teaching the kids.”
Griffin characterized fringe benefit increases as “major, major dollars” and “frustrating.” The problem is the nearly 19 percent hike required to afford the district’s contract for the 2012/2013 school year with the Employees’ Retirement System will eat up the board’s spending goal all by itself. The Teacher’s Retirement System contract is estimated to increase by 12 percent and employees’ health insurance plans by at least six percent.
“The retirement system increases are controlled by Albany. This isn’t some magic thing, they set the rates. Then, they set limits on what type of money you can raise and then set the limit on what kind of aid you can get,” he said.
Thankfully, fuel prices were locked in a last year before prices sprung up, he said.
Acting school board President Tom Morris pointed to another budgeting difficulty facing the district. The board is currently in the midst of negotiations with all three labor unions. “Unfortunately the state and local entities have to practice some sort of restraint and fiscal responsibility. While the 2 percent increase can be altered, it will be unwise. The future is uncertain, especially next year,” he said.
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