SUPERINTENDENT RECOMMENDS FURTHER CUTS TO BUDGET PROPOSAL AND A TAX LEVY WELL BELOW THE CAP
March 23, 2014 -- With more than $1,000,000 having already been shaved from the initial budget draft over the past month, Schools Superintendent Dr. Ed Melnick, has recommended trimming an additional $200,000 from next year's spending plan, and reducing the tax levy to a level well below the cap imposed by New York State.
The recommendations came at this past Thursday's Board of Education meeting, and if adopted by the Board would result in a budget proposal of $95,855,828, representing an increase of 1.98% over last year’s spending plan. The tax levy would be $88,083,212, 1.76% greater than last year and $119,548 below the 1.898% increase allowed under New York's property tax cap law.
The $200,000 that was trimmed Thursday evening came about through a reduction to the teaching staff at Sea Cliff School by one, as four fifth grade classes will be graduating in June and three Kindergarten classes entering in September; and, by cutting $123,000 from BOCES special education tuition costs, and adding $23,000 to the miscellaneous special education budget line, as one student will now be educated in the district's schools rather than off-site.
At the request of Board President Herman Berliner, $28,000 was added to the security budget line in case the district should decide to install six blue light phones, three each at the Middle School and High School. Board members then asked Dr. Melnick to reduce other budget lines to keep the spending plan under 2% over this year. He replied that he could do so by reducing expenditures for “Central Services/Facilities and Operations.”
Trustee Michael Nightingale questioned why the district was not using more of the $2.5 million grant received through the efforts of State Senator Carl Marcellino and Assemblyman Charles Lavine to offset a potential tax shift from the decommissioning of the Glenwood Landing power plant.
Dr. Melnick replied that about $200,000 would be used, and then explained that the District has been assured verbally by county and state officials, that the shift would not be more than 1% next year as a result of the protection offered by sections 1803 and 1803a of New York State Real Property tax law. The remaining grant money will be held in reserve, for future use, he said, since the District does not know whether Albany will continue to provide similar grants in the future, or whether 1803a, which limits the shift from one property tax class to another to 1%, will continue to be annually renewed. He also cautioned that using more of the funds to artificially deflate this year's levy, would bring down next year's levy limit.
Trustee Amy Beyer concurred, saying the "responsible way to use the money is to gradually phase it in so that you don't artificially reduce your levy limit, so that next year it spikes." She said that the district did not know whether it would get more money from the state, but that the district "certainly would try" through lobbying efforts.
Trustee Maryanne Russo added that the district was trying to get legislation enacted that would exempt the funds from the tax cap, so that any amount used to lower the levy, would not result in the district being handcuffed in subsequent years with a lower limit.
A resident commented that he understood that the $2.5 million grant could be spread out over several years, but wondered if the district would ever consider using a larger portion when the district goes through the budget process in future years. Dr. Melnick replied that districts “have gotten into trouble” using a "large chunk" of reserves in any one year as it artificially inflates the budget while reducing the tax levy. Making up for a loss in revenue from reserves the following year, he explained, would require a large jump in the tax levy to make up the difference, which could only be done with a 60% majority vote. He recommended gradually phasing in the grant funds.
Another resident questioned why the board would support a tax levy $120,000 below the limit, since that would effectively reduce future years' caps by that amount, thereby putting a "$120,000 hole in every budget for perpetuity," while the "average taxpayer would only be saving approximately $1 per month." He suggested taking less from reserves and increasing the levy from 1.76% to the legal limit of 1.898%.
Dr. Melnick asked the board to consider the suggestion. Trustee Beyer stated that by having the lower levy, the District was sending a message to the community that it was not “padding the budget.” The Superintendent added that in "today's political climate" it sent the right message to keep the levy below the allowable amount. Trustee Tom Knierim agreed, saying that he believed that the tax levy was fiscally responsible, and that using some funds from reserves was a “good compromise. “
The board also discussed what the consequences would be if the budget proposal were to be rejected by voters in May. Dr. Melnick, in response to a request made by Dr. Berliner back in January, distributed to the trustees an outline of the cuts that would be made in case of such a scenario.
With a 0% change in the tax levy, and a revenue increase of .41%, coming from reserves, the budget would total $94,362,754, about $1.5 million below the current proposal, the Superintendent said. Cuts would include several teaching positions - with enrichment, the libraries, and third grade instrumental instruction being hardest hit at the elementary schools; science and math labs and enrichment at the middle school; and, business, technology, English, and social studies at the high school. In addition about half of all clubs and extra-curricular activities at the middle and elementary schools would be eliminated, and most sports teams at the middle school would be cut and replaced with a single combined seventh and eighth grade team for each sport, thereby eliminating 60% of the spots available for participation.
On April 4, the Board will adopt the budget proposal and tax levy that will be put before voters on May 20.
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