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North Tonawanda School Board rejects utility tax proposal, but plans property tax hike, staff cuts

The North Tonawanda School Board is considering cutting six teachers and an administrator and raising taxes by 1.48 percent after it rejected creating a 3 percent utility tax to balance its budget.

The utility tax on cellphone bills and gas and electric bills for residents and businesses in the North Tonawanda zip code had been discussed by the board for the past few months as a way to raise approximately $1 million.

The outcry in the community prompted the School Board to discuss other options to plug a $1.3 million budget gap, said Alan Getter, assistant superintendent of administrative services, following the Tuesday night budget workshop.

The district had proposed a $74.26 million budget for 2017-18, up $1.9 million from the current budget. But after discarding the utility tax proposal, it plans to cut staff, raise taxes and transfer $300,000 from its fund balance to balance a proposed final budget of $73.6 million for 2017-18.

Getter said that the proposed tax levy of $28.1 million for 2017-18, up from the current levy of $27.7 million, would require an additional $410,000 raised from a tax rate increase of 33 cents per $1,000 of assessed valuation. The rate would go from $22.25 to $22.58. The average homeowner with a home assessed at $100,000 would see the school tax bill increase by $33 per year.

The final budget will be presented to the public and adopted by the board at 7:30 p.m. April 5 at the Board of Education meeting room, 176 Walck Road.

Getter, who originally proposed the option of a utility tax to the school board, said that the state-approved method for small city schools to raise additional funds has been discussed in North Tonawanda for a number of years, but this is the first year it got some traction. He said both Niagara Falls and Lackawanna school boards have adopted utility taxes.

Unlike property taxes, a utility tax would affect anyone who resides in the City of North Tonawanda zip code, not just homeowners.

Getter noted that someone with a gas and electric bill of $100 would have had to pay the district $3 a month. The tax on a single cellphone bill of $45 to $80 would be another $1 to $2 a month. But Getter admitted the tax could be much more "significant" for families who have larger cellphone bills with several lines.

Board Member Barbara McCarthy, who has been an outspoken opponent of the tax, said businesses would be especially hard hit by this tax. She said she made calls to other board members to convince them to change their minds.

"I was worried about the senior citizens on a fixed income and I was very worried about our businesses here in North Tonawanda," McCarthy said of the utility tax. She said high taxes would discourage residents and businesses from moving into North Tonawanda.

She said the alternative staffing cuts should not affect students in the classroom.

Getter said North Tonawanda doesn't have the growth in property assessments to cover increasing costs. He said without any additional state aid, for the budget to stay under the 1.48 percent tax cap, the district must make cuts in staff, supplies and equipment.

He said the district had already planned to cut three elementary teaching positions due to decreasing enrollment, but will now cut three more teachers. That would include a total of four teachers at the elementary school and two at the high school, plus an administrator. The total savings in staffing would be $430,000.

Additional cuts would be made in BOCES programming, supplies and equipment and $300,000 would be transferred from the district's fund balance, said Getter.

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