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‘Convoluted’ tax cap creates confusion; ECS elementary school principal search to begin

February 1, 2012

Through most of the past year, the Eldred Central School (ECS) District has been grappling with the impacts of a contingency budget and making deep cuts in preparing the upcoming budget. Now school officials must address the impacts of the New York Tax Levy Cap approved in June 2010—and the false perception that it limits tax levy increases to two percent.

A detailed review of the new Tax Levy Cap Worksheet—by all accounts a complex calculation—took place at the ECS school board meeting on January 12. School business administrator, William Thornton estimated ECS district’s actual tax cap to be 2.69%.

Thornton explained that public perception that the new law prohibits tax levy increases greater than two percent is flawed. Eight factors, such as that which ECS is facing, included in the calculation produce varying results that are closer to a 2-3/4% tax cap. “As you can see, Governor Cuomo’s 2% tax cap, in Eldred, means 2.69%, which requires a simple majority to pass,” said Thornton. “Anything above that would require a super majority.”

Members of the public in attendance expressed their concerns that community members would not understand the implementation of the tax cap nor the importance of passing the stripped-down budget on its first round.

“People are going to see that 2.69%, and they’re going to say—that’s not the 2% that was specified,” said one woman. “The 2% is only a calculation within the larger calculation of the property tax cap,” said Thornton.

“The budget we’re presenting is within the allowable limits of the tax cap legislation,” added ECS superintendent Robert Dufour.

“I think the important thing to emphasize community wide is that last year’s spending plan versus next year’s spending plan is significantly lower,” said faculty association second vice president Robert Bliefernich. “That’s a result of all the work that’s been done in preparation so that the amount of the tax increase is necessary to support virtually a bare-bones educational process for Eldred next year. To not pass this on first round is just not tenable. It’s not going to be good for the community if it doesn’t.”

Upcoming budget workshops are scheduled for February 9 and 23, March 8 and, if necessary, March 22 at the high school in Eldred.

In other matters, Dufour announced that the search for a permanent principal for the George Ross Mackenzie Elementary School is anticipated to begin in February. A community input survey will be circulated to determine the desirable qualities for the position.

Key points to understand

• The tax levy is the total amount of property taxes a school district must collect to balance its budget, after accounting for all other revenue sources including state aid. The tax levy is the basis for determining the tax rate for each of the cities, towns or villages that make up a school district.

• The new law does not prohibit tax levy increases greater than two percent. Although the new law has been referred to as a “2% tax cap,” it does not, in fact, restrict any proposed tax levy increase to 2%. Every district must calculate its own “tax levy limit.” Two percent (or the rate of inflation, if less) is just one of eight factors in this calculation.

• The law also establishes a higher threshold of voter approval for a budget to pass if a district’s proposed tax levy increase (before exemptions outlined in the law) exceeds its individual “tax levy limit.”

• The new law applies to the tax levy, not to tax rates or individual tax bills.

• Visit http://ecs.schoolwires.com/site/default.aspx?PageID=1 to see three informative documents covering the tax cap on the ECS website. For additional information provided by the Sullivan County Board of Cooperative Educational Services, click here.