Monday, May 20, 2019

With all of New York State's School District's Budget Votes occurring on Tuesday, May 21st -- many folks throughout Central New York communities are engaged in discussions and conversations about the appropriations and expenditures dedicated to the children of their respective communities.

Liverpool Central School District is not dissimilar . . . including questions and inquiries being posed to better understand the school budgeting process; how the NYS Tax Cap is uniquely positioned in the mathematical equation; how PILOT (Payments in Lieu to Taxes) Agreements impact or effect the Tax Levy; and ultimately how all of this has a direct outcome for homeowners and their respective Tax Rate.  All great questions and . . . given the process is similar in all school districts - the outcome is often very different -- based on a uniques set of circumstances.

So, for the Liverpool Central School District, we start with a strict set of values:  Maintain of existing programs; Provide resources to support the strategic plan; Support facility improvements; and, Support areas such as social-emotional, socio-economic students, innovative initiatives, and alternatives to traditional discipline.  With the discussion following that philosophy - the Budget Advisory Team spends many weeks (November to March) working through the local budget codes and incorporating in any details forthcoming from the New York State Education Department, the Governor, and the Legislature.  Those details are not typically provided until around April 1st.

Our Story:  Budget to Budget (2018-2019 Current Budget to the Proposed 2019-2020 Budget), the increase is approximately 1.85% increase.  When we look at the components that make up the budget development process, given we are in a "people" business - the majority of our costs are people.  Salaries and benefits make up over 80% of our entire budget.  With that, typically our annual increase in costs for salaries is slightly under 3%; and, health insurance increases is around 8%.  With that, it's nearly impossible to balance the budget without significant budget reductions (either reducing staffing or reducing program costs).  This year, we focused our efforts on the benefit costs (rather than reducing people - which would often result in a negative affect on class size).

But, there are other factors that tell the entire story . . . I have published the budget details in a couple different formats - including the Public Hearing, Web Site Video, and the School Budget Bell.  Even with these documents, the mathematics of the budget is still an elusive concept.  Here are  some of the more important details:  The Tax Levy is set at 3.9%.  To most - this appears to be significantly higher than acceptable.  But - let's look at the details of the Levy . . . The Levy is broken down like this:  TOTAL LEVY - 3.9011%; Community Growth - 0.53% (New construction in Liverpool); C.P.I. (Consumer Price Index - basically economic growth in NYS) is 1.9401; Debt Service (Cost of District Facility Upgrades) is 0.0087%; and, PILOTs being moved to the Tax Rolls is 1.4223%.  Here is the "long and short" of it . . . As a homeowner, you are only responsible for the CPI and Debt Service portion of the Levy (approximately 1.9488%).  New construction pays all of the Growth % (0.53%) and the businesses that are being moved from the PILOTs to the Tax Rolls pays all of the % (1.4223%).  So, understanding how the Tax Cap mathematics works - it looks like the Tax Levy is 3.9% for everyone - absolutely not true!

The other factor in calculating the Homeowners property taxes is the tax rate.  For Liverpool, the proposed tax rate is an increase of approximately 75 cents per $1,000 of assessed property value (or $75 per $100,000).  A big impact on this calculation is the assessment adjustment for the Great Northern Mall - based on the recent sale.  A portion of the tax rate adjustment is attributable to the reduction in mall property value.  The tax rate is an approximate - given the assessments are not finalized until August each year.  Quite often the tax rate is slightly lower in August after the adjustments have been finalized by the Town of Clay and the Town of Salina.

Keep in mind, the Liverpool Budget Vote has been moved over to the Wetzel Road Gymnasium (while the LHS Gym is under construction).  The Vote date is: Tuesday, May 21st from 6am until 9pm.