The Chappaqua Central School District will make an effort to stay within the newly imposed 2-percent property tax levy cap, according to Assistant Superintendent for Business John Chow.
“So, what we talked about is that we are going to try our best to come within 2 percent tax cap legislation, and we are going to try our best not to go for the super majority," Chow told attendees at a budget planning info session, held Wednesday at Robert E. Bell Middle School.
The district would need to win a 60-percent majority in the budget vote next May in order to override the cap, according to state law.
The budget event was the latest installment in a series of community meetings organized by Superintendent Lyn McKay, which she calls Knowledge Cafés. During the event, McKay and Chow gave a recap of how the budget process works and outlined the major terminology.
To comply with the cap, the district is projecting that about $1.8 million in spending will have to be cut, Chow explained. This early estimate does not include final figures for the teacher pension fund contribution rate, health insurance and state aid. All of the major numbers will be in by February, Chow said.
The decision not to override the cap was partly in response to results from a recently released survey, in which a large majority of voters were wary about tax increases but also agreed that not investing in education would harm property values.
On the spending side, however, projections show a small increase. Chow expects a budget increase of about 2.76 percent or lower. This is lower than previously anticipated by Chow, based on factors such as the district refinancing debt and with a bond having recently been paid off.
Because of the tax cap's complicated formula and its slew of exemptions, Chow spoke extensively about how it works. In a nutshell, the process for staying within the cap is similar in its town budget planning. First, the tax levy from the previous year is multiplied by a number called the "growth factor," a figure that accounts for changes in the tax assessment base. The resulting number from that equation becomes the new "base" levy from which to mark an increase that is acceptable under the cap. Before the cap percentage is added, however, a series of exempted items are subtracted from the levy. The cap is added by multiplying 1.02 in the case of a 2-percent limit. The resulting number is the highest "allowable" levy, which districts can choose to stay under.
Exemptions include large awards in lawsuits, as well as pension contributions above a certain initial amount.
Chow also emphasized that the cap only covers the tax levy, which is the total amount of money to be raised, and not the tax rate, which is the amount of money that people pay per $1,000 of their property's assessed valuation. Because New Castle and Mount Pleasant, the district's two towns, assess their properties at different rates of market value, a forumla called the equalization rate is used to determine how to apportion the tax bills. This results in residents of the towns getting different tax rates for their properties.
As officials have repeatedly noted in recent years, the largest drivers of costs are employee salaries and benefits (about three quarters), with property taxes making up most of the revenue (89 percent). These costs are driven primarily by state mandates governing several areas, including pension contributions and continuation of expired union contracts before they are replaced with new agreements.
With these fiscal obstacles and the cap in mind, McKay asked for folks to brainstorm what to cut, ways to raise new revenue and what to do about the long term.
A large number of ideas were brought up by participants, ranging from converting Robert E. Bell Middle School into condos, to improving the district's commercial tax base, to more coordination with New Castle.
Roger Klepper suggested leasing out extra classroom space to outside groups, such as a preschool.
Some participants expressed interest in making activities pay to play as a condition for kids doing them. Others were interested in the educational value of certain classes being offered.
One major structural item that a number of participants raised was the topic of mandate reform, whether it involves changing the district's pension contribution requirements or the seniority system for teachers.
“We can’t hire the best teachers and we can’t fire the worst," said resident Larry Smith.
According to McKay, the suggestions will be gathered and organized by the district's finance committee and posted onto the district's website.