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What Does the New School Tax Cap Mean to You?

In a series of articles to appear on Patch, members of the Communications Committee of the Citizen's Financial Advisory Committee in the Mamaroneck School District will explain the complexity of the new two percent tax cap law.

 

In 2011, with great fanfare, the state legislature enacted what was quickly termed a two percent tax cap for municipalities and school districts across the state. Sounds simple, right?  But as municipalities, school districts and taxpayers work through the first year under the new legislation, they are finding the new rules are not so self-explanatory.  The seductive idea of a limit on our taxes makes it easy to conclude that our tax bills will be “capped” at a two percent increase when that is not what this law promises. Here’ s why.

Stated simply:

*The two percent cap limits the total tax levied by the school district for certain operating expenses. 

*The two percent cap is NOT a cap of two percent on the tax levy increase.  Since some expenses of the district are not subject to the cap, the allowable tax levy for the Mamaroneck school district for the 2012-13 school year is 2.53 percent.

*The two percent cap is NOT a limit on the tax increase billed to each taxpayer. Individual tax increases can be higher or lower than the increase of the total tax levied by the district since tax certioraris and reassessments continually change the size of the aggregate assessment “pie,” changing each taxpayer’s “slice” of the tax levy accordingly. 

For example, if the taxpayer’s assessment remains the same, but several of his neighbors’ assessments were reduced, his share of the total tax would be slightly higher.  Conversely, if the taxpayer’s assessment was reduced and everyone else’s assessment remained the same, his share of the total tax would be slightly lower.

The annual school budget is comprised of three major elements:

  1. Contractual Obligations - The District has employment contracts with five separate bargaining units, including the Mamaroneck Teachers’ Association, covering many areas required by law, such as salaries, retirement benefits and health care.  The total cost of these contracts exceeds 80 percent of the annual school budget.
  2. Mandates - The state requires that districts provide a variety of services, such as transportation. Only a small portion of these costs are reimbursed.  The total combined cost of these mandates and the contractual obligations exceeds 90 percent of the annual budget.
  3. Non-mandated Programs and Services - These include such programs as kindergarten, sports, art, music and numerous high school elective classes.  Together they comprise an important element of the quality education for which the District is well known and which it has been providing for decades.

In addition to taxes, the District has partially funded its expenditures through a variety of revenues, such as state aid and facilities fees.  The world economic crisis of the past few years has adversely affected these revenues, causing all districts to look to increased tax revenues to cover the shortfall.

The District has worked diligently within its authority to control costs, including the elimination of some 56 staff positions since 2009. However, the built-in increases in mandated and contractual expenses continue to exceed the savings, causing the tax rate to increase, although at a substantially lower level than in past decades.  For this reason, the Superintendent’s Recommended Budget for next year reflects a 2.07 percent increase in the tax levy, but a 3.43 percent estimated increase in the tax rate.

This series is written by members of the Communications Committee of the Citizen’s Financial Advisory Committee (CFAC), a committee of volunteers from the community who are lending their financial expertise to the School Board and administration. As we approach the May 15 school budget vote, we will examine the new rules and explain aspects of the school budget process that we have come to understand through our work on this committee.

BG7 March 27, 2012 at 05:42 PM
The mandated costs are the main problem - its Albany commanding ther School District to spend money in specific ways, when the money raised in taxes should really be spent how the School District decides (ie non-mandated). Tell your representative to stop unfunded NYS mandates, let Schools take control of their finances.
Jonathan Sacks March 28, 2012 at 11:33 AM
Come to a CFAC meeting and you can see for yourself the level of challenge that the group gives the District. After that you can comment if a group of dedicated community members are assisting the district (and taxpayers) in reducing expense or simply spreading propaganda. You will be pleasantly surprised.
John March 28, 2012 at 01:03 PM
@JS. Without doubting teh work done so far, there still nees to be a zero increase mentality. That means looking beyond cuts and plugs to a serious review of just what the school district should provide. The cost of educating 2 students exceeds the after tax income of the many residents, and certainly could not be afforded by a majority if they had to pay directly. Clearly this is unsustainable. Radical thinking required and not just at the school district level. We need to get much more value for our money
Chari Topol-Allison March 28, 2012 at 01:47 PM
Art and music IS mandated by the NYS Education Dept., as is phys. ed. PART 100 REGULATIONS: "The arts, including visual arts, music, dance and theatre"-PreK-6, "the arts, including one half unit of study in the visual arts, and one half unit of study in music;"-grades 7/8. While Kindergarten is not mandated in NYS, public education is mandated once the child turns 6 yrs old. Many kindergarteners turn 6 during the school year, so how would schools deal with that?
Kevin March 30, 2012 at 11:26 AM
The last time I checked, 1 credit of art or music is also mandated for high school graduation from New York State Public Schools.

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