As the adoption of a new budget nears, Peekskill school officials are emphasizing to taxpayers that the state’s new 2 percent cap on the district’s tax levy increase will not translate into a 2 percent cap on the tax increase for a particular property.
The cap is computed through a complex eight-step process, and certain expenditures are excluded from its calculation. Therefore, Gregory Sullivan, assistant superintendent for business, told the Board of Education during a special meeting Thursday, the district’s actual tax levy for the 2012-13 school year will exceed the current levy by 3.3 percent while complying with the 2 percent limit.
The new school year begins July 1. Please click here, here and here for more information about the cap.
As an example of expenses excluded from cap calculations, Sullivan cited spending associated with bonds issued for capital improvements. Peekskill’s exclusions total about $691,000, meaning the schools can levy a total of $36,188,501 in taxes on the district for 2012-13, an increase of $1,167,798, or 3.3 percent, over the 2011-12 levy of $35,020,703.
The board is scheduled to adopt the budget Tuesday, April 17. District residents will vote on the spending plan and fill two seats on the Board of Education May 15.
The tax on a particular property is determined by the fluctuating numbers of the assessment process and will not be finalized until specific information is received from city officials after the election. The current tax rate is $603.94 per $1,000 of assessed value; a home assessed at $10,000, the district average, will pay $6,039 in taxes this year.
Homeowners benefiting from the STAR tax relief program will benefit more in 2012-13. The basic exemption is increasing from $3,050 this year to $3,480 while the enhanced exemption is increasing from $5,790 this year to $7,210.
The district is still trying to close a $731,260 gap between estimated revenue of $73,595,291 in 2012-13 and estimated expenditures of $74,326,551, up 2.2 percent and 3.2 percent, respectively. The current budget is $72,013,090. Officials are looking at a combination of eliminating jobs and drawing from reserve funds to meet the tax levy cap and close the gap.
The transportation segment of the new budget will not see the substantial savings anticipated from a new busing contract that will include billing parameters more favorable to the district than those in the current contract. Sullivan said the three bids received were “about as expected” while the cost of fuel remained unpredictable.
Looking beyond 2012-13, Sullivan said the district could save $1.5 million a year by eliminating regular bus transportation. A city school district is allowed to eliminate such busing if voters in a referendum approve doing so, Superintendent of Schools James Willis said.
“It’s something to think about,” Sullivan told the board.
Should voters defeat the budget and force adoption of a contingency spending plan, the district would not be allowed to increase the tax levy and would have to eliminate an additional $1,167,798 – the current increase – in spending. Taxes would still rise because of increases in assessed property value, Sullivan said.
