Northville Central School District’s Board of Education on Tuesday adopted a 10.8 percent tax levy increase for the upcoming school year in an effort to offset the loss of years of tax revenue from the Hudson River Black River Regulating District.
Although the regulating district recently approved a plan to pay back delinquent taxes to Fulton County, which would then distribute funds owed to Northville and two other school districts in the county, those funds have yet to be received.
“We’re hoping that will still come in,” said district Business Manager Bruce Ellsworth. “But at this point we can’t count on it and we really don’t know what’s going to happen. We’re hoping that will come through and replenish what we had to use in fund balance.”
Before Fulton County can distribute funds to the school districts, it must wait for HRBRRD to complete the process of liquidating its Black River Area reserve funds to cover the debt of its Hudson River operating area.
The school district struggled to adopt an official budget as it dealt with the $656,000 in taxes not paid by HRBRRD for 2009-10 and 2010-11. Voters rejected a proposed budget in May, forcing the board to adopt a contingency budget that would have increased the tax levy as much as 20.7 percent.
To avoid the steep tax hike, the district will apply $368,000 of its fund balance and $500,000 in debt service and other reserve funds to reduce the levy, which the five-member board unanimously voted to set at $5,225,513.
“We were able to rework our debt service costs, but the majority of it was just a plain use of reserves and fund balance,” Ellsworth said. “The board didn’t feel that the community could withstand such a heavy tax burden.”
Superintendent of Schools Kathy Dougherty could not be reached for comment Wednesday.
The board, its financial adviser and the Statewide School Finance Consortium executive director held a public meeting Friday to discuss the tax levy, fund balance and the overdue HRBRRD taxes.
The school district will send a tax bill for the upcoming school year to HRBRRD later this month. But it doesn’t expect it to be paid anytime soon, district officials have said.
“If we get the money for the back taxes we’re still looking at whether they will be able to pay the current year taxes and future years,” Ellsworth said.
The use of fund balance and reserves to cover the unpaid taxes leaves the district with a budget hole for future school years, he said. Officials at the Friday meeting questioned whether the district would be able to buy back enough reserves to make up the difference.
In addition, Northville and many other school districts are scrambling to come up with a plan to live within the means of the state’s recently imposed 2 percent property tax cap.
“We have a lot of issues right now,” Ellsworth said. “The biggest one for all school districts are the mandates. We need relief so that we can live within the means of this cap. There are so many variables that there’s no way we can forecast two or three years down the road what we will need.”
Official tax rates will appear on residents’ tax bills.
The towns of Bleecker, Benson and Hope will see the largest tax rate increases, at 11.44 percent. Bleecker’s unofficial tax rate is set at $10.25 per $1,000 assessed value. Benson and Hope will maintain an $11.02 tax rate. The town of Mayfield will see the next-largest tax rate increase at 9.87 percent, with a $14.43 tax rate. In the town of Northampton, residents will be dealt a 9.75 percent increase, with a tax rate of $15.52. Town of Edinburg residents will see a 7.39 percent increase, with a tax rate of $18.63.