Capital Region

School districts: Too early to say how 2% tax cap will aid budgets

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The tax cap for school districts throughout New York is increasing to 2% but exactly how that will affect local school budgets is undetermined at this time as districts just begin preparing their 2022-2023 budgets.

The cap is up from 1.23% last year, according to a press release from the state Comptroller’s Office.

“The tax cap, which first applied to local governments and school districts in 2012, limits annual tax levy increases to the lesser of the rate of inflation or 2%,” said the release from DiNapoli’s office. “School districts may override the cap with 60% voter approval of their budget. DiNapoli’s office calculated the inflation factor at 4.7% for those with a June 30, 2023, fiscal year end.”

The increase to the cap was expected, said Matt Leon, spokesperson for the Niskayuna Central School District.

“The district’s individual tax cap calculation is due to the state by March 1,” Leon said. “The draft budget will be presented at the March 1 Board of Education meeting. It’s too early to say how this news will influence the overall process — we will be working toward the most responsible budget possible that meets the needs of students and is responsive to taxpayers.”

Scotia-Glenville Central School District won’t really begin dissecting its budget until the superintendent presents it in late February, said Robert Hanlon, the district spokesperson.

He said once the budget is presented, the board of education will meet every Monday until it is adopted, which is typically in late March.

“Honestly, 2% is the maximum the cap can be set at and, with inflation high in many sectors, it puts pressure on our overall budget,” he said. 

Mohonasen Central School District Superintendent Shannon Shine said the cap is just one factor in the budget. He said the pandemic has caused the budget process to become a little bit harder due to uncertainty.

“We are able to smooth the inconsistencies with the use of one-time grant funding, but that actually makes the budgeting process — something we are just beginning for 2022-2023 — more complex as you may be supporting parts of your budget with funds that, ultimately, will cease and you need to take that into account in your planning,” Shine said.

But with the restoration of Foundation Aid expected, Shine said that will help with the budgeting process.

Foundation Aid was created in 2007, and takes school district wealth and student need into account to create an equitable distribution of state funding to schools,” according to a press release from Gov. Kathy Hochul’s office from October 2021 announcing the state’s requirement to restore Foundation Aid.

“The pledged restoration of the Foundation Aid we have long been due will help us stabilize the budget moving forward,” Shine said.

He said the aid will likely also help the district stay within the cap.

A district can exceed the cap with a 60% voter approval of the budget, according to DiNapoli’s press release.

Foundation Aid will be extremely important to school district budgets, said Sen. Jim Tedisco, R,C-Glenville, a former special education teacher and guidance counselor and ranking member of the state Senate Education Committee.

“Now that we have full Foundation Aid beginning to flow, we need to maintain that state funding in this coming year’s state budget to support our schools and ease the burden on local taxpayers as well as create more autonomy for local use of education dollars because of the different needs in urban, rural and suburban districts,” Tedisco said.

Schenectady City School District declined to comment on what the 2% cap could mean for its budget.

“We are going to reserve comment as we wait for the state budget,” said Karen Corona, the director of communication and public information for the district. “We will talk about it at that time when we have more information and as we begin our budget process.”

Categories: Fulton Montgomery Schoharie, News, Saratoga County, Schenectady County

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