Thursday, April 12, 2012

Tax Cap Ramifications

All four spending plan scenarios that administration at Potsdam Central proposed to the District's Finance Committee included a 2.9% increase to the tax levy, exceeding the 2% which the Business Manager has said is allowed.  This means that at least 60% of the voters must approve the spending plan in May.  What happens if the budget is not approved by voters?  I read through a document that is posted on the school's website regarding the tax cap and found this information.  It is quoted verbatim because I think it is very well written:

If a proposed budget is defeated by voters, a school district—as in the past—has the option of putting the same or a revised budget up for a revote, or adopting a contingent budget. If a proposed budget is defeated twice by voters, a district must adopt a contingent budget. Certain existing contingent budget requirements remain in effect that prohibit spending in specific areas including community use of buildings, certain salary increases and new equipment purchases.

More significantly, under the new law, a district that adopts a contingent budget may not increase its current tax levy by any amountwhich would impose, in effect, a zero percent cap. As of this writing, it is unclear if exemptions will apply.

To read the rest of the Tax Cap Questions and Answers, go to Understanding New York's Property Tax Levy Cap

I still don't understand why it is believed that the public will support exceeding the tax cap.  Have there been assurances by large special interest employee groups directly associated with the school district that they will get the vote out?  Maybe the five Board of Education members who were not at the Finance Committee meeting have a plan that has not yet been shared.  The Finance Committee is recommending a spending plan with most of the cuts added back.  This is unlikely to be the choice of administration which seemed to be prepared to cut at least one million dollars from the budget. 

The final act is planned for Monday, April 16th.  On that day, the Finance Committee's budget calendar states that a spending plan will be adopted.  By law, the Board has until Friday, the 20th to adopt its plan.  It will be an interesting outcome.

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