THE QUESTION:

Steve:

I am a little confused about the current purposed school tax increase, the mailing I received from the NRSD explains a budget increase of less than 2 percent.  The last school board meeting talked about a 6.9 percent increase in taxes collected. If I vote against the budget and the budget vote fails, does that reflect the less than 2 percent budget increase or the 6.9 percent taxes collected increase, forcing the district to the aut. budget, which may be more than current purposed budget. this issue is confusing to most people I talk to about it.....I'm just a concern tax payer, trying to get the facts straight....

Thanks for your time and efforts !

Paul

MY RESPONSE:

Hi Paul.  You are confused most likely because this is the most confusing situation I can imagine.  At this moment we do not know what the tax increase is going to be for a number of reasons.  Let me see if I can summarize in a somewhat clear manner.

There are TWO issues we as taxpayers must consider regarding school taxes.  The first problem is the actual school budget, which is about $197 million (!!).  Obviously the more the budget goes up the more we pay in taxes.  That problem is in the hands of the School Board.

However, the second, more direct problem we face relating to our school tax payments is how much of that school budget is paid by our property taxes.  The portion of that total budget we pay through property taxes is known as the “tax levy”.  The tax levy is less than the total budget because there are other sources of income for the School District such as State and Federal grants.  If I recall correctly, last year even though the budget was around $194 million, the tax levy was about $125 million – IE: the amount raised in taxes was $125 million.

Now here is where it really gets confusing.  That total tax levy is split between residential and commercial property owners.  Then, those totals are further split between Haverstraw and Stony Point taxpayers.  With all of this going on, that means there are FOUR ways our residential taxes can go up REGARDLESS of how much the budget changes.  They are:

1)       how much the budget is going UP;

2)       how much money from other sources (State and Federal aid) we are LOSING;

3)       how much LESS commercial properties will pay compared to the prior year; and

4)       what percentage of the tax levy will Haverstraw and Stony Point taxpayers will each pay this year as compared to last year.

As you can see, making even an educated guess as to how much our residential taxes are going to increase is nearly impossible.  All we really know is that the total budget is going up this year 1.65% ($3.2 million).  But, as indicated here, that does NOT mean our taxes are only going up 1.65%.  Remember, as I said above our taxes are based on the TAX LEVY, not the total budget. Thus, based on the above four items, as regarding this year:

1)       the budget is going up $3.2 million;

2)       at this point I am estimating that we are losing about $4 million in State and Federal funds;

3)       I am also estimating (actually guessing) that the Haverstraw Bowline plant will pay about $6 million less in commercial property taxes this year than they paid last year; and

4)       The Haverstraw/Stony Point percentage split is based on State issued “equalization rates” which will not be finalized until mid-summer.

I realize this isn’t much to go on.  The budget increase and loss of State and Federal aid (items #1 and #2) means the tax levy is going UP about $7.2 million.  Assuming the tax levy was about $125 million last year, that means for STARTERS the total tax levy is going up about 6.5%.  Then, residential taxpayers will have to pick up some portion of the Haverstraw Bowline plant reduction (item #3), so that is a further residential increase.  Although we do not have enough information to even estimate this Bowline effect, my guess would be another 3% or 4% increase to residential property owners.  So, item #1, #2, and #3 above could result in a total residential increase of 9% or 10% (or more).

This does not mean both Stony Point and Haverstraw School taxes will go up 9 or 10%.  The split between Haverstraw and Stony Point should change this year based on the actions of three of the five Stony Point Town Board members authorizing the Town’s attorneys, tax experts and tax assessor to fight to reduce Stony Point’s portion of the School tax bill.  If that effort is even partly successful, which we believe it will be, Haverstraw may be facing a 10% or more increase, while Stony Point may be looking at something more like 3% or 4% increase.

I hope this helps clarify somewhat the manner in which the four items mentioned above affect our school taxes, and especially why the budget increase is not the same as our tax increase.  Also, I am sure it shows why we really don’t know what tax increase we are voting on next Tuesday.

Now for the final caveat:  I don’t believe the budget vote on the 17^th doesn’t much matter as relating to our taxes.  If the budget is voted down, the School Board can pass an “austerity budget” which will have to be based on State guidelines and spending limits.  According to the District this year the proposed budget we are voting on is identical to the austerity budget.  This means that even if the budget is voted down, it could still be adopted by the Board.

As always, if you have any questions or comments drop me an email or phone call.

STEVE