News
Tax cap law changes school budget landscape
Sept. 13, 2011
As Mohonasen leaders continue to analyze the tax cap legislation signed into law by the Governor in June, Superintendent Dr. Kathleen Spring is projecting that significant budget cuts will again be necessary for next year.
At this time, Spring said it is unclear what the exact allowable tax levy increase will be for Mohonasen next year. While the cap has been touted by state leaders as 2 percent, it actually includes a number of provisions and exemptions that mean districts could exceed the 2 percent and still be under the cap. As a result, the actual allowable tax levy increase will vary by district.
While it’s still early, Spring expects Mohonasen’s allowable increase will be between 2 and 3 percent.
To get there, Spring is projecting that the level of cuts necessary for 2012-13—the first year to be affected by the cap—will be similar to the $2.7 million made in the current year’s budget.
“Looking ahead, there are a number of factors set to affect our budget planning—and now we will add a property tax levy cap to the mix,” Spring said. “I continue to be frustrated about the lack of serious mandate relief from our state leaders. While this bill includes some first steps, it does not address pension costs, health insurance or the other mandated items that have the largest impact on school cost increases.”
“These are difficult fiscal times for our taxpayers and moving ahead we will continue to focus on balancing the needs of our students with our community’s ability to pay,” she added.
The exemptions from the cap include pension contributions beyond a certain level and spending for voter-approved capital projects.
Voters will still decide on school budgets in New York.
Furthermore, the allowable tax levy increase more accurately refers to the figure that determines what level of voter support is needed for a school budget to pass. If the tax levy increase is above the cap, the support of a supermajority (60 percent) of voters would be required for budget passage. If it is within the cap, a simple majority is needed for budget approval.
If a proposed budget is defeated twice by voters, the district would be forced to adopt a budget that does not increase the tax levy over the current year. This provision has prompted some school leaders to refer to the tax cap as an actual 0 percent cap.
Mandate Relief?
The tax cap legislation was approved with a package of changes intended to help school districts and local governments control costs. These included the creation of a Mandate Relief Council to review laws and regulations that lead to escalating expenses for school districts and local government; allowing smaller districts to share superintendents; and changes to bus routing. Mohonasen officials say that at this point they don’t believe any elements of this relief will help the district bring down costs substantially.
Even with a 2.5 percent tax levy increase, the 2011-12 budget—which was approved by voters in May before the tax cap was put into place— included $2.7 million in cuts and the elimination of 34.5 FTE positions. This came after the third year of reduced state aid for education.
The level of cuts in the budget for the upcoming school year would have been even deeper had officials not used $1 million of the district’s fund balance (or “rainy day” fund) or received more than $525,000 in concessions from the teachers, support staff, supervisors and administrators.
Other budget factors
Aside from the tax cap legislation, there are a number of factors set to affect Mohonasen’s 2012-13 budget. These include:
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The loss of $800,000 in Federal Education Jobs money that is being used to fund a number of current positions within the district.
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Increases in the state-mandated district retirement contributions.
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Contractual salary increases.
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Increases in other contractual areas, such as health insurance.
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Increasing energy costs.
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Limited availability of fund balance after it has been spent down in the recent years of declining state aid.
State aid? At this point school leaders are not planning for an increase in state aid for 2012-2013.
While Mohonasen leaders understand the level of tax fatigue and frustration with ever-increasing tax bills, Spring said they also know that the best economic stimulus is a solid education and high school diploma.
Because of the number of challenges faced by the district, Spring is urging all members of the Mohonasen community to stay engaged in the budget development process.
“Together, as a community, we will face the challenges in front of us and work to maintain quality schools for our children,” she said.
The district hopes to hold a community forum this fall with local legislators to discuss the challenges of the tax cap. Look for more information regarding the forum at www.mohonasen.org.
Contact your elected leaders
As always, parents, staff, students and taxpayers are urged to voice their opinions on these matters to our elected leaders. To do so, please visit our Contact Your Elected Leaders Page.
