Schalmont Central School District officials are worried that their budget could take a $13 million hit if GE is successful in lowering its assessment.
The company has filed a lawsuit in state Supreme Court asking for a reduction in its property tax assessments for a five-year period beginning in 2007. The company is currently assessed by the town at $141.5 million and GE officials are seeking to lower that to $30 million.
Superintendent Valerie Kelsey said she could not determine exactly what impact the reduction would have on educational programs. The district cut more than $2 million from its budget last year, mostly by closing Mariaville and Woestina elementary schools, to make up for reductions in state aid. It also cut 24 full-time equivalent teaching, support staff and administrative positions.
“Anything like this is going to have a detrimental effect in a fiscal crisis that we’re in,” Kelsey said.
This is the third such assessment challenge in the past decade. After a lengthy court battle, GE’s 325 acres in Rotterdam was set at $126.4 million in 2003 and $129 million in 2004. After the ruling was upheld by the court’s Appellate Division, that assessment was locked in for 2005 to 2007.
As a result, the district had to pay the company $1.1 million. In 2002, after another successful GE challenge, the district had to pay about $11.6 million, which it borrowed and is continuing to pay back with interest.
Kelsey said she hoped a settlement could be reached before the case goes to trial, which would not happen until sometime next year. A trial conference has been set for August. The town of Rotterdam and Schenectady County would also be required to refund taxes if GE is successful.
In addition to the one-time expense of refunding the taxes, the lower tax base would require other taxpayers to make up the difference in next year’s school tax levy, Kelsey said.
GE spokeswoman Chris Horne said the company believes Rotterdam’s assessment is excessive. “We hope to reach an amicable agreement with them just as we have done in the city of Schenectady and we’re working toward that end,” she said.
“GE has always been a strong advocate of paying our fair share of taxes,” she added. “We paid more than $18 million in property taxes in the Capital Region in 2010.”
Horne also questioned the amount of money Schalmont said it could lose. “We have no idea where that number came from and it’s too early to speculate on the impact of our negotiations.”
Rotterdam Supervisor Frank Del Gallo could not be reached for comment.
Ray Gillen, commissioner of Schenectady County economic development and planning, said it is beneficial to get long-term deals to set assessments. He hoped that an amicable resolution could be reached.
“It provides long-term stability and also invites the company to consider the community for more investments,” he said.
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