Taxes for the average homeowner in the Niskayuna Central School District would rise by about $226 if voters approve a $76.3 million budget the Board of Education adopted late Tuesday night.
The proposed 2013-14 budget would increase spending by $1 million from this year’s budget and increase the tax levy by 5.76 percent. Because the levy would increase by more than the district’s 4.66 percent state-mandated limit, it would require approval by 60 percent of voters at the polls on May 21.
Factoring in a $30,000 basic STAR exemption, a Niskayuna homeowner with a house assessed at $250,000 would see taxes increase to about $4,146.
The district had started with a $6 million gap between revenues and expenditures, but officials cut $2.5 million in spending. The equivalent of nearly 22 full-time positions would be eliminated under this budget, including about 10 teachers, eight administrators and four support staff. Actual layoffs will be lower because of attrition.
All department heads will be teaching 40 percent of the time as part of their duties, saving the district about $90,000, according to district spokesman Matt Leon.
After months of deliberations, all these cuts brought the tax levy down to 7.16 percent. However, the board was able to trim the levy increase by using more surplus.
Matthew Bourgeois, assistant superintendent for business, said each year the district underestimates revenue by $1.25 million and overestimates spending by $1.25 million. The district is going to reduce each amount by $355,000, which will bring the tax levy increase down to 5.76 percent. This will lower the amount of surplus the district would have available to use for the 2014-2015 to $1.8 million.
Some board members had concerns about class size under this budget. Barbara Mauro said kindergarten class size should be kept low and there shouldn’t be any combination-grade classes.
“There always has to be something that’s attractive to elementary parents,” she said.
Board President Deb Oriola said it becomes an equity issue if the class size varies greatly among the different elementary schools.
Mauro said she was concerned also about the number of layoffs. She is particularly concerned that 1.6 positions were going to be cut in the math department, which would limit the number of sections of elective math courses.
The board decided not to participate in the so-called pension “smoothing” plan included in the state budget, which allows school districts to contribute less to the Teachers Retirement System now and lock in that rate for two years.
The state has set this year’s TRS contribution rate as 16.25 percent of a district’s teacher salaries. That would have dropped to 14 percent under the stable rate option, according to Bourgeois.
However, the rate could increase up to 16 percent in the third and fourth years of the program and up to 18 percent in the fifth year and beyond if the state decides the pension system needs the money.
After five years, the district would begin to pay back with interest the money it deferred putting into the pension fund. School districts would have five years to pay back all the money.
The catch is that if the entire pension system becomes only 80 percent funded, then the smoothing option is automatically canceled and districts go back to paying the regular rate, according to Bourgeois.
Bourgeois said this would be very risky. In Niskayuna’s case, the district would be deferring $700,000 of its pension payment in the first year and $1.2 million in the second year. This would knock 1.4 percent off the levy in the first year.
“It kind of looks attractive in he first year but it increases your levy in the later years when you have to pay back what you deferred,” he said.
In Niskayuna’s case, that would be another 4 percent increase in the tax levy during that five-year period.
Another downside is it would have changed Niskayuna’s tax levy limit calculation from 4.66 percent to 3.26 percent, according to Bourgeois.
A few board members seemed interested in the idea to save some money.
Oriola said it would help get the district through the next couple of years.
“We will have protected programs,” she said.
Board member Deb Gordon said she was more comfortable with the option of using the reserves rather than the pension smoothing.
“As much as a I’d like to preserve programs, it’s too risky,” she said.