Thursday, March 22, 2012

Exceeding the Tax Cap in Potsdam

Well, the administrators and Board of Education members at Potsdam are finally talking about it: putting up a spending plan that will exceed the tax cap. After weeks of providing different figures for the maximum tax levy allowed by the new tax cap, the latest figures could be as low as 1.35 percent.  That figure has been getting lower and lower as the weeks have gone on.  According to the press account of the school board's Finance Committee meeting, Board member Chris Cowen was quoted as asking what was needed to pass a budget above the tax cap.  Sixty percent (60%) of the voting public has to approve a budget which exceeds the tax cap.  The question isn't surprising.  I have been expecting it since last year.

When the budget results were discussed after the 2011 budget vote, Superintendent Brady made a point of stating that the number of affirmative votes exceeded the tax cap requirements if they came to pass.  Now we are in 2012 and I have been saying since the Finance meeting on February 13th that the recommended budget cuts have been designed to convince the community that they must pass a budget with a tax levy higher than the tax cap (see my post on February 21st).  In a personal e-mail to me, Mr. Brady denied that that was a strategy, but here we are. 

It is my perception that it is a different climate now that the tax cap has actually become a reality.  It doesn't matter that last year's vote was approved by over 60% of the voters.   The economy isn't much better and the public expects municipalities to live within that cap.  The school district is still sitting on almost $5 million in reserves and fund balance.  It seems to me than instead of asking voters to approve a higher tax levy, the Board of Education should be asking the voters' approval to take money out of the capital reserve to cover the shortfall.  That money is taxpayer money paid by their school taxes in years when the fund balance was higher than it ought to have been and could have been returned to the taxpayers then.  I fear that if the Board of Education chooses to exceed the cap, there will be many more voters who show up to vote "NO" to the spending plan.  Just my opinion.

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