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A history of low taxes catches up to Johnstown

A history of low taxes catches up to Johnstown

District points to history of small levy increases as forging budget crisis
A history of low taxes catches up to Johnstown
Residents arrive to vote at Johnstown High School on May 21.
Photographer: Erica Miller

If Johnstown school district voters this month approve a 14.5 percent levy increase on the district's budget revote, the tax levy will have grown 55 percent since 2003 – rising from $6.3 million to $9.8 million.

During that same time frame, Cobleskill-Richmondville grew its levy by more than 86 percent; the Mechanicville tax levy grew by more than 100 percent; and Broadalbin-Perth's levy, which in 2003 was less than $6 million, smaller than Johnstown's levy at the time, has grown by more than 160 percent, now topping $15.6 million.

As Johnstown students, teachers and administrators grappled with budget cuts that slash electives, extracurriculars and athletics, they are pointing to the district's history of small levy increases – which effectively amounted to a self-imposed 2 percent tax cap over the past 15 years – as forging the district budget crisis.

“Our school district's problem is a revenue problem, so whatever revenue we can't get, we have to continue to reduce,” Johnstown schools Superintendent Patricia Kilburn said in a recent interview. “So every time we can't gain revenue, we have to continue to reduce.”

The district has kept the financial reckoning at bay until recent years, as it has dipped into reserves and savings, and consolidated into fewer buildings over the past decade. But that reckoning has fully engulfed the district, with officials mapping out a plan to ask voters to approve three consecutive levy increases of roughly 15 percent, beginning with the June 18 budget revote.

Kilburn has tried to sell voters on a series of double-digit levy increases in a bid to raise the levy to a level that she has said can sustain the district's core programs, including athletics and extracurriculars. But voters have resisted as the district has struggled to earn the supermajority needed to pass the first budget proposed both last year and last month.

Michael Borges, executive director of the state Association of School Business Officials, said that while it may be politically appealing, limited levy growth can compound over time and force districts into budget crisis once they are hit with unexpected cost increases or other challenges.

“It's prudent to have steady increases in your levy every year,” Borges said. “That way, when you face a financial bump in the road down the line, you have the resources to address it and not resort to catastrophic cuts to programs.”

Borges said districts in financial distress present unique circumstances, making it difficult to draw conclusions about the broader education finance landscape by looking at Johnstown's specific situation.

Borges also said the education community is concerned that the state tax cap – which Gov. Andrew Cuomo succeeded in getting made permanent this year – limits districts' revenue growth. But that tax cap doesn't address burgeoning growth in health, retirement and special-education expenses that are driving nearly all school district budgets higher each year. Borges has pointed out that in recent years the state's overall education aid increases have only covered line-item health care cost increases in the state.

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“There will be more of these kinds of Johnstown issues as the tax cap continues to suppress districts' ability to raise taxes locally and state aid remains flat for the most part,” Borges said. “There is an indication that rising costs will outstrip the local ability to raise revenue and state aid increases. Something is going to have to give going forward, and this is just the tip of the iceberg.”

Tuitioning out?

Throughout New York state, a handful of school districts meet their mandate to provide students a high school education by paying to send them to nearby districts -- “tuitioning out,” in education policy parlance.

State education law and regulations empower district school boards to enter a contract with other schools districts – including nonadjacent districts – to pay tuition to send students to the other district's high school.

If the contract covers more than just one year of a tuition arrangement, the district proposing to send its students to another district's high school must earn voter approval for the contract, under state law. The district set to receive students would only need the school board to approve the contract.

Johnstown officials have alluded to a dramatic drawdown of the district's high school as the potential consequence of voters continuing to reject the proposed levy increases. But Kilburn recently said the discussion has not progressed beyond a preliminary stage; she has yet to broach the subject with any other districts, she said.

A lot of questions remain unanswered on what a plan of this sort would look like in Johnstown: What district or districts would they send students to? How much would those districts charge in tuition? To what extent could another district accommodate an influx of Johnstown students?

“It would be premature,” Kilburn said of considering options to contract the students to other districts for high school. “I think we are good this year, for 2019-2020 [school year], and I think we will be good for next year, 2020-2021 school year,” she said. “So if this budget [revote] passes, but the next one doesn't – I have to start having those conversations.”

Gazette reporter Jason Subik contributed to this article.

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