Q & A's about Mohonasen's 2007-08 budget

It is even more complicated than that though. Rotterdam’s town board established a homestead tax option — which allows one tax rate for residential property owners (homestead) and another for non-residential property owners (non-homestead). Because the town adopted this dual tax-rate option, both the Mohonasen and Schalmont school districts were required to consider the same option. Both districts held public hearings to obtain feedback from the community. Mohonasen also held an additional public hearing in the event that people could not make it to the first hearing, and provided information on the district Web site.

Based on data and feedback provided, the Mohonasen Central School District did NOT adopt the homestead tax option, instead choosing to retain a single tax rate, which is the way the district has always calculated taxes. Mohonasen did not adopt the homestead tax option for a number of reasons, including:

• The data that was provided by the New York State Office of Real Property Services (ORPS) and the town were rough estimates and did not seem to match. Therefore, it was difficult to determine the exact impact on both residents and non-residents;
• If adopted, the dual tax rates would have caused the towns of Guilderland and Colonie to see a significant impact based on the estimates given; and
• Under the dual-tax system, residents would have seen a small reduction in their tax rate, leaving the non-homestead properties in the town to shoulder a very large share of the burden. These are the same residents that our schools often approach to support fundraisers. Because many of the non-homestead properties are small businesses, this option might have forced them out of the area.

“Mohonasen had to weigh this issue very carefully in order to make a decision we felt was best in the long run for the entire community,” said Spring. “The decision was not an easy one and was made only after a great deal of discussion and thought. We were very aware of the frustration people were feeling with the reassessment and wanted to be sensitive to the concerns of all our taxpayers while balancing what we felt would be best for our community moving forward to the future.”

“The district adopted all possible tax exemptions and with the additional state aid that we’re getting, we tried to offset the tax burden by being conservative with our budget,” adds Spring.

One common mistake
Reassessment does not increase the amount of money that the school district collects (i.e. the school tax levy); it merely redistributes who pays the levy in an effort to distribute the tax burden more fairly (see chart below).

Specific individual tax calculations cannot be made with certainty until late August, which is when the district will receive final assessment figures from the town. The assessment amounts will then be used in coordination with equalization rates from the Office of Real Property Services (ORPS) to determine tax rates.

Q. How will STAR exemptions affect school taxes?
A. All New Yorkers who own their own homes can significantly reduce their school taxes through a School TAx Relief (STAR) exemption on their primary residences, regardless of age or income. STAR exemptions must be applied for through the town assessor’s office.

The Basic STAR exemption is available for owner-occupied, primary residencies regardless of the owners’ ages or incomes. The Enhanced STAR exemption is available on the primary residence of residents age 65 and up with yearly household incomes below the state standard.

Call your town assessor if you have questions about this program, about income limitations, or wish to apply for STAR. For a direct link to exemption application forms and deadlines, go to the ORPS Web site at www.orps.state.ny.us/ref/forms/subjects/exempt.htm.

Q. I’ve heard that the state budget increases STAR exemptions, is that true?
A. Yes. Gov. Eliot Spitzer advocated for an additional benefit for middle class taxpayers as well as senior citizens. You will see the increase in the rebate check you receive in the fall. The timing is not a coincidence, rebate checks are purposefully sent out around the time taxes are due to offset that payment.

Q. What other exemptions can Mohonasen residents receive?
A. In an effort to respond to the concerns of fixed-income senior citizens and people with disabilities, the Mohonasen Board of Education passed maximum Real Property Tax Exemptions in February (see chart at right).

Residents over the age of 65 and qualifying residents of any age with disabilities who have an annual income of $37,000 or less can be exempted from paying 5-50 percent of their home’s assessed value, translating to a reduction in school taxes. These exemptions are in addition to the basic STAR exemption. Applications for either exemption must be filed with the town assessor’s office and must be renewed annually. The phone number for the Rotterdam Town Assessor’s Office is 355-7363.

Q. Why are taxes rising more than spending?
A. Several factors are contributing to the gap between next year’s spending increase (4.09%) and the estimated increase in school taxes (4.25%). These include:

• A stagnant tax base. Many area school districts enjoy a 3 to 4 percent growth in their tax base every year. The construction of new homes and businesses in those districts usually generates enough new tax revenue to offset the modest increase in state aid or to fund proposed increases in spending. That is not the case at Mohonasen where the tax base has seen only minimal growth and there is very little space for future development.
• Limited commercial property. Mohonasen serves an almost entirely residential community with none of the large malls, large businesses and industrial complexes that other schools draw taxes from. In fact, this limited commercial wealth is one of the main reasons why Mohonasen is defined by the state as a district with less than average property wealth. As a result, Mohonasen relies on the state for more aid than school districts with greater property wealth, and is therefore more vulnerable when state aid does not keep pace with rising costs.
• Reliance on state aid. This year, Gov. Spitzer saw Mohonasen’s need and the formula gave us more state aid than in previous years. Because of this, the district is able to begin building back the positions and programs it had to cut last year, use a portion of the money to help lower the tax rate, and build back some of its reserves (fund balance) for the future.
• A nearly depleted fund balance. By regulation districts can have what amounts to 2 percent of the approved budget amount in fund balance, which is similar to a savings account. Other districts in the region have built surpluses that they can tap in years of tight finances. However, years of bare-bones budgeting — driven by the district’s limited resources — have taken their toll on reserves leaving Mohonasen’s “rainy day” savings at a very low level.

Q. How does Mohonasen involve residents as the budget is being developed?
A. Each year, Mohonasen officials work with a citizens’ Budget Review Committee to review every area of the budget as it is developed. This committee is comprised of volunteers from the community and from within the school who devote many long hours to the review process. The committee listens, asks questions and ultimately makes recommendations to the Board of Education pertaining to the annual budget. All Budget Review Committee meetings are open to the public. This process starts in December and runs concurrently with administrative discussions that begin in October.

Sincere appreciation is extended to the following members of this year’s Budget Review Committee, who were very active in participation: Co-chairs Vernon Aldershoff and Judy Kazakavich, Peter August, Dominic Cafarelli, Kathy DeSousa, Mark DiCocco, William Efner, Tracie Knutti, Deb Male, Paula Marshman, Jim Prendergast, Craig Radliff, Joe Salamone, Sr., Margaret Shutten, Joshua Whipple and Denise Zimmerman.

Q. What happens if the school budget is defeated?
A. Under New York State law, if a school budget is defeated, the Board of Education can either put the same or revised budget up for another vote or move directly to a contingency budget. The Mohonasen Board of Education’s philosophy has always been to put forth the best possible, bottom-line budget for the first vote. Therefore, if defeated the district would go immediately to a contingency budget.

Q. What would happen under a contingency budget?
A. Under a contingency budget, Mohonasen would be required to make more than $350,000 in cuts for 2007-08. A contingent budget would impact the district’s ability to help all students meet standards and graduation requirements, and would affect its programs. Other cuts would have to be considered, including athletics, field trips, equipment and student supplies.

Q. When does the community vote on the school budget?
A. The statewide school budget vote date is Tuesday, May 15. Polls will be open from 7 a.m. to 9 p.m. in the Mohonasen High School gymnasium. Voters will also elect two members to Mohonasen's Board of Education for three-year terms, and consider a proposition to replace five school buses.