Tax Cap. These two words have been on the minds of every superintendent and Board of Education member in New York State for the past few months. Under the new tax cap law, revenues raised by school districts through property tax, known as the tax levy, can increase no more than approximately 2%, plus exempt items, year after year. The law exempts certain items from the calculation, including capital costs and some pension costs, and the law also factors in local tax base growth in a complicated formula done for each district, but for the most part, a school district cannot increase its levy by more than 2%. (The law also states that if 60% of the voters permit it, the levy can grow by more than 2% plus exemptions.)
Taxpayers should be aware that the law only caps the total amount of taxes collected from the property owners at 2% plus exemptions, and does not cap an individual homeowner’s tax bill. How the tax affects each individual homeowner is determined by the town through a calculation called the tax rate and a value called the assessment. If the value of your home, known as its assessment, is changed by your town, your final tax bill could be more or less than the percentage growth of the levy. The school district is not empowered to assess your home; that is the sole domain of your town. We are only permitted to ask the towns in the school district to collect enough tax to support district operations.
Here in Riverhead, we know that if we take this year’s budget and simply adjusted it for next year’s costs, preserving all current programs, our levy needs would rise by approximately $5 million dollars. However, after doing all of the mandated calculations in the tax cap formula, we have determined that our levy can rise by no more than $1.815 million, meaning that we have to find ways to trim about $3.2 million out of our budget next year.
The Board of Education has adopted four budget goals for the 2012-2013 budget, including designing a budget that does not require an increase of more than 2% plus exemptions. In seeking to meet this goal, we have spent a great deal of time working to create a budget that preserves our programs and prioritizes our operations. Each class we offer our students is important and every one of our employees brings a unique gift to our district overall. The cuts have not yet been finalized, but each one is difficult and not taken lightly.
Recently the governor proposed an increase in state aid to school districts. The proposal for increased state aid is certainly welcome. The governor’s proposal however shifts certain costs to school districts that are now borne by the state. Once we know the impact of potential additional costs, we will be in a better position to determine how the increase in aid will affect our budget. We are hopeful that the state’s budget will help us in our endeavor to preserve programs and positions to the greatest extent possible while remaining within the cap.
Please join the Board of Education at any of its public meetings in February, March or April to discuss the budget choices that are being made. As always, I am available by phone or e-mail to listen to your suggestions and concerns.
Superintendent of Schools
Editor’s note: This letter was published on the schol district’s website: www.riverhead.net