CLIFTON PARK, N.Y. — Since it was established in 2012 New York’s property tax cap limit hasn’t had a major effect on the Shenendehowa School District budget but that may soon change.

In an extended discussion with the Board of Education last week on how the administration has put together the proposal for next year’s budget, Superintendent L. Oliver Robinson focused directly on the tax cap. Unlike years past, this budget and in particular its tax levy (the total amount the district receives from taxpayers) is under intense pressure from the tax cap maximum.

This year the state formula will only allow Shen a two percent increase in expenditures from last year’s budget. Some years the formula allows for more. Not this year.

Noting that the state budget had not been finalized as of the March 23 meeting and that aid formulas could change, Robinson pointed out that despite conservative budgeting and looking at many different options, the preliminary budget’s levy figure was coming in $971,561 more than the maximum allowed.

“The tax cap is focused on the tax levy, not necessarily the budget,” he said. “As we sit here now there is a good likelihood we’ll be slightly above the tax cap calculation.”

Though preliminary budget figures were not the central point of the night’s discussion, the full 2021-2022 district budget has a total figure of approximately $185 million, an increase in expenditures of less than two percent. Unfortunately, with that budget, the tax levy is above the maximum allowed under the rules of the state’s property tax cap limit.

Asked by Board of Education Vice President Todd Gilbert if there was any scenario where the tax levy came in under the cap Robinson said after running many calculations there was not.

With the understanding more state aid might be forthcoming, Robinson said the options came down to getting more revenue into district coffers from the growth the area is experiencing or asking voters for the required override of the tax cap. An override requires 60 percent of voters giving their approval to the budget rather than the usual simple majority.

Robinson said he believes additional state aid will be enough to cover the difference between the desired tax levy and the tax cap’s maximum and prevent the need for an override.

In discussing the tightness the tax cap is having, he said the district may need to build into the budget some expenditure flexibility “for things we can’t effectively predict right now because we have no idea what’s going to be our allowance from a COVID restriction perspective come September."

As he continued his discussion of predicted expenditures Robinson said an expected 10 percent increase to the district in the cost of health benefits for employees was not going to help things financially.

“It’s not that we are doing anything differently, it’s that now the market is going through a recalibration,” he said. “While we think the increase is a worst-case scenario, we are hoping they will recalibrate, and come January we’ll have a new rate change again and we’ll see some adjustment.”

The preliminary budget includes increases per contracts for instructional and non-instructional employees as well as increases for the Teacher Retirement System and the Employee Retirement System.

Staring the Board of Education in the face is the reality that any additional monies the district may get this year coming from the federal government’s COVID-19 relief bill is a one-time-only payment. Building budgets around aid like that is a good way to get to the edge of a structural deficit, always a major concern for Robinson.

“The budget process is a technical process but it’s a very logical process because it has to make sense; that we deliver what we say we’re going to deliver and do what we say we’re going to do,” he said.

The Board of Education will adopt next year’s budget in the coming weeks. A public hearing on it is scheduled for May 11. The public vote on the budget is scheduled for May 18.

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