Rye School District Faces Tax Cap “Gap”

For the 2016-17 school year, Rye City School Superintendent Dr. Frank Alvarez’s proposed budget includes a 1% increase in the tax levy, which equates to a $73.15 increase per household.

Published March 9, 2016 12:28 AM
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For the 2016-17 school year, Rye City School Superintendent Dr. Frank Alvarez’s proposed budget includes a 1% increase in the tax levy, which equates to a $73.15 increase per household.

 

By Peter Jovanovich

 

For the 2016-17 school year, Rye City School Superintendent Dr. Frank Alvarez’s proposed budget includes a 1% increase in the tax levy, which equates to a $73.15 increase per household. His budget maintains all current programs, continues the Literacy and Stem Initiatives, and adds 1.6 teaching positions.

 

That should be cause for celebration, but these are no ordinary times in the world of tax caps. In an interview with The Rye Record, Board President Katy Glassberg and Asstistant Superintendent for Business Gabriella O’Connor explained the dilemma the District and the community face.

 

“In order to stay within the tax cap this year, which we promised to do during last year’s override vote,” explained Glassberg,” we are allowed just a 1% increase in the tax levy.” As expenses will rise by 2.6%, the District will use $2.5 million of its reserves.

 

Since 2011, the District’s reserves have declined from $15.8 million to a projected $7.7 million in school year 2016/17.

 

“This is not sustainable,” states Glassberg.

 

In effect, the School District faces two budget issues in the coming years. First, in a world of disinflation, the allowable tax increases may be way below the normal increase in District expenses. In order to sustain the District’s programs, that means asking the voters regularly to override the cap, which requires a 60% yes vote.

 

“No one expected the tax cap to be so low this year,” said O’Connor; “but, because inflation was so extraordinarily low, through the complex steps that determine the cap, it ended up at just 1%. Most people think the cap is 2%, but in fact it can be much lower, even negative.”

 

Second, as O’Conner noted, the District’s expenses, even with a flat enrollment, naturally increase by 2.5 to 3% per annum. Salaries increase by 2%, health care costs rise by at least double that amount, and there are always additional state mandates that raise the cost of teaching students. Even if the tax cap rose to 2%, the District would still have to find additional funds to simply maintain what it’s doing.

 

“We, as a Board, need to have an ongoing dialogue with the community about these long-term issues,” said Glassberg. “We know the community expected that last year’s override budget vote would solve the problem for the next several years,” acknowledges Glassberg, “but that’s not possible when the cap is just 1%.”

 

Glassberg promises to be available to meet with residents throughout the coming year to discuss the looming budget issues. “We need to think about what we really value; great schools make great communities.”

 

The budget process continues in public hearings beginning March 8. The budget will be adopted April 12 and voted on May 17.

 

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