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Low tax cap has school districts considering overrides in coming budgets

Zero sounds pretty good if you’re talking about a school tax increase.

But maybe not so good if you want your teenager in a math class with less than 30 other students, or your middle schooler to join the modified baseball team, and your kindergartner to have more library time.

And definitely not so good if you’re a school administrator, trying to figure out how to run a district without a tax increase to pay for the things that parents want.

For the first time in the five-year history of the tax cap, it’s looking like the cap for school districts next year will be zero, based on this year’s consumer price index. That means taxes can’t go up at all, unless 60 percent of voters say so.

“I don’t know what rabbit they’re going to pull out their hat, because they’re out of creative options in lieu of reductions,” Clark J. Godshall, superintendent of Orleans/Niagara BOCES, said of districts.

The cap for each district will be different, based on a formula provided by New York State, but the starting point for the formula will be the lowest it has ever been: zero or close to it.

And while voters don’t like approving a budget over the tax cap, some school board members are talking about it today, months before the May 17 vote.

“I’d like to seriously consider that as an option now, to get the public behind it,” said Frontier Central Board Member Davis Podkulski. “I don’t want to keep pushing it down the wayside to where it’s too late.”

He’s got plenty of company around the state.

“With no growth allowed in their tax levies, we expect more school boards to attempt a tax cap override in order to meet their rising expenses,” said Timothy G. Kremer, executive director of the New York State School Boards Association.

A poll by the association of school board members found 38 percent of them would consider giving voters a budget that raises taxes above a tax cap of zero.

In recent years, going above the tax cap has been so risky most boards don’t attempt it.

Of the nine budgets around the state that failed on the first vote this year, seven of them were trying to override the tax cap, according to the school boards association. A total of 18 districts, or about 2.7 percent, sought to go over the cap in 2015. And on the revote, the only two that were defeated a second time were attempting to go over the cap and needed the supermajority of 60 percent to pass.

An average of about 4 percent of districts seek tax cap overrides each year, according to the school boards association.

Since the tax cap went into effect in 2012, the rate of budgets passing has soared from about 61 percent to more than 98 percent last spring. That’s because the penalty for failed budgets is so high. After two budget defeats a district must adopt a budget that does not raise taxes a penny.

But with the tax cap at zero or close to it for most districts next year, some may think there is not much to lose by trying an override.

Some will even have a “negative” tax cap like Niagara Falls did last spring. The cap in Niagara Falls for this year’s budget was below zero. The district had to get a supermajority to pass its budget, which kept taxes the same.

If they can’t raise taxes, districts may look to the state to come through with more aid.

The New York State Association of School Business Officials is calling for a $2.4 billion increase in school aid for the 2016-17 school year.

That includes more than $400 million to completely phase out the last remnant of the Gap Elimination Adjustment imposed in 2010, as well as $800 million to phase-in of the foundation aid formula that was frozen in 2009.

State aid was at an all time high in 2009, then it dropped during the recession as some of that aid was taken away from schools. Districts were able to use fund balance to make up the difference, but those accounts have all but dried up in many districts. Administrators have picked the low-hanging fruit like increasing class sizes or eliminating courses, and many have reduced staff.

That leaves one big option to make up the difference, said Richard Timbs, executive director of the Statewide School Financial Consortium.

“Every school district now becomes totally state aid-dependent,” Timbs said, “and we know the history of state aid.”

“It’s very stressful. Whenever you’re talking about draconian economics and the education of children in the same sentence, nothing good is going to come of it,” said Frontier Central Superintendent Bret Apthorpe. “We already have an education system that’s not meeting the needs of kids because of drastic cuts made.”

It seems like every year recently has been labeled a tough budget year.

Districts have done a lot of cutting and adjusting to declining enrollment, said Godshall of Niagara/Orleans BOCES.

“We’ve done a good job of retrenchment and weathering the storm,” he said.

He said unions are starting to understand and contributing more to health care. But he doesn’t think a lot of school boards will “bust” the cap.

In addition to asking for more money, education groups and local municipalities also are asking the state to change the tax cap legislation.

School business administrators have proposed getting rid of the consumer price index and tying the cap to a constant 2 percent.

“The CPI doesn’t have a lot to do with what we do,” Timbs said.

Districts also want the governor to provide state aid runs and distribution formulas with his executive budget proposal. Last year they never arrived. It’s always difficult for school boards to predict how much state aid they will receive, and when the runs were released they had a clue. But without the proposal, it’s like reading tea leaves without the tea.

Why the talk now of overriding the cap before budgets are finalized?

More and more school officials are coming to realize it’s too late in May to convince voters to approve a tax cap override.

“The budget doesn’t pass in May,” Timbs said. “It passes all year long.”