The Board of Education (BOE) held a work session Wednesday to discuss tax cap legislation and its effects on the 2012-2013 budget.
Superintendent Dr. Robert Feirsen does not believe that the cap offers meaningful solutions to address the biggest cost drivers.
“It's a misguided attempt to control expenditures,” he said. “It will have a significant impact this year and for future budgets. It will significantly alter the rules by which we have constructed and presented budgets. We’re restricted by how much revenue we can raise while expenses continue to rise significantly, jeopardizing what our community has come to expect.”
The growth in the property tax levy, that is, the total amount to be raised through property taxes charged on the school’s district’s taxable assessed value of property, will be capped at 2 percent or the rate of inflation, whichever is less.
The state has provided some exceptions although most provide minimal relief while others ares still unconfirmed.
Additionally, districts may soon be responsible for tax certiorari payments which are not excluded from the cap.
A budget vote will be held and the BOE can propose a budget that exceeds the cap. Passage requires a supermajority of 60 percent or more of votes.
BOE options include proposing a budget requiring a tax levy before exemptions at or below the tax levy cap which requires a majority vote or providing a budget requiring a tax levy before exemptions that exceeds the cap requiring a supermajority for passage.
A contingency budget may not include a tax levy higher than the prior year’s levy.
“If we go to a contingent budget the most we can raise is the same amount we raised this year, which is why it’s really a 0 percent tax cap,” said Feirsen.
If this tax cap was in effect over the last five years, $20,000,000 less in available resources would have been available.
State aid is the only other source of significant revenue besides property taxes. Garden City is a low need district resulting in negligible state aid.
To compensate for deficits, parents cannot “pay for play” to make up deficits for activities since the state does not allow this option.
Preliminary budget numbers indicate that Employee Retirement System, Teachers Retirement System and health insurance premiums total $3,150,000 while the dollar value of maximum allowable tax levy increase is $3,800,000.
“There isn’t a lot of room for anything else,” advised Feirsen. “If you have a child in this district now and a child entering, I’m not confident we’ll deliver the same program.”
Trustee Angela Heineman expressed frustration that pension reform has not been enacted and she encouraged residents to lobby legislators.
“If every employee contributed the same 3 percent, we would reduce this obligation substantially and that would make a difference," she said.