Superintendent Susan Swartz presented the first glimpse of the 2017-18 budget to the Board of Education tonight, a "rollover" budget would total $53.8 million and raise taxes by 5.58 percent, above the state's maximum tax levy increase for Scotia-Glenville of 3.66 percent.
The budget proposal would increase spending by $1.752 million (3.37 percent) over the current school year's budget ($52.048 million).
"I am relentlessly optimistic, as always," said Swartz, noting that she would hope to avoid budget reductions. "We have certainly been in worse shape over the years. While reductions are never welcome news, we will survive if we have to make a few."
The "rollover" budget assumes that all current program are continued into the 2017-18 school year. The "rollover" budget does not include retirements - at least 10 staff members have already indicated that they will retire next year. While they would all be replaced, their replacements would most likely be paid less.
She said the retirements may potentially reduce the budget shortfall and she has ideas to fill the remaining gap that don't necessarily include budget cuts. That would leave the budget at the maximum tax levy cap of 3.66 percent for 2017-18.
Board members have some decisions to make
She is hopeful that board members would approve the budget by March 26 or April 3.
At this point, she said board members have to decide a few things:
▪ What tax levy increase would they want? The maximum of 3.66 or something less. The majority said they would not seek to exceed the state's cap.
▪ If the board wanted to make reductions in the budget proposal, to reduce the potential tax increase, where would those come from? Swartz said she could develop a list of possible reductions, if asked to do so.
▪ Do they want to include new initiatives? Swartz did not present any but has some ideas of possible new initiatives if the funding were available.
Overall budget information
Among departments, transportation would increase by 6.8 percent and instructional costs would climb by 3.56 percent. Debt service would increase by 17.5 percent as new school buses and the 2015 capital project result in $600,000 in repayments beginning in 2017-18.
Swartz pointed to these factors as influencing the budget proposal:
▪ Step and Contractual Agreements, $850,000 budget increase
▪ Migration to New Minimum wage - $9.75 in January 2017 to $10.40 in January 2018
▪ Decrease in Pension Rates, $717,000 budget savings
▪ Debt Service Increase of $600,000 (Capital Project and 2016 Bus Purchases)
She noted that Gov. Andrew Cuomo has presented a state budget that would include a 1.33 percent increase in Foundation Aid for Scotia-Glenville. Total state aid - including reimbursed funding for money already spent like transportation and BOCES aid - would increase by $410,099 or 2.09 percent. The state Legislature may increase those figures as the state budget is developed up to the April 1 state budget adoption deadline.
The budget gap of $531,000 was created by these factors:
▪ Increased Spending $1,752,000
▪ Increased Revenues ($465,000)
▪ Tax Levy Increase ($1,006,000)
▪ Fund Balance Decrease $250,000
Budget Gap $531,000
Maximum tax levy limit
The state's “maximum tax levy limit or cap” is the highest allowable tax levy a school district can propose as part of its annual budget requiring approval by a simple majority of voters.
Certain exemptions don’t count against the cap. These include voter-approved local capital expenditures, increases in state mandated employer contributions to employee pensions, and some court orders or judgments. In 2017-18, Scotia-Glenville is taking a capital levy exclusion, which is from the capital project repayments. That exclusion raises the district's maximum allowable tax levy limit to 3.66 percent.
Each school district determines its “tax levy limit” using an eight step formula. The formula adjusts a district’s tax levy to reflect growth in the local tax base (if any) and the rate of inflation or 2% (whichever is lower - 1.26 percent in 2017-18).
The law, though referred to as a "2 percent tax cap," does not
cap property taxes at 2%. The law applies to the
tax levy, not to tax rates or individual tax bills.
A frugal history on tax rates
Tax rates declined in the 2009-10 school year (-1.68 percent) as the district receive federal stimulus money and returned part of that in the form of lower taxes; the 2015-16 school year (-2.51 percent) as the state dramatically returned Gap Elimination Adjustment (GEA) funding that had been withheld; and in the current year (-0.74 percent), thanks in large part of an elimination of the GEA and overall increases in state aid.
The community - with a 73.2 percent approval vote - supported an override of the state's maximum tax levy cap in May 2014 for the 2014-15 budget. The state required a 60 percent voter approval rate for the override. That year, the state said the maximum tax levy increase for Scotia-Glenville was a paltry 0.27 percent (less than 1 percent). At the time of the vote, the school district told voters the tax levy would increase by a maximum of 1.76 percent; when approved in August 2014, the levy actually increased by 1.12 percent.
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