Since the budget calls for a zero percent increase in spending, does that mean my school tax bill will be the same as it was last year?

No. The Board of Education estimates that the tax levy will increase by approximately 1.8 percent over last year.

Tax levy is not the same as the tax rate. The tax levy is the total amount of money that the Board of Education decides is needed after state aid and any other sources of school revenue are taken into consideration. The tax levy is raised through payments from property owners within the district. The amount each property owner must pay is calculated based on the assessed value of their property multiplied by the tax rate. The town assessor determines the assessed values of properties. The school district uses that information to calculate the tax rate that will generate the required tax levy.

The total amount of all assessed property in a town can have significant impact on the tax rate. The tax rate is determined by dividing the tax levy by the total assessed value of properties:

If the tax levy AND the assessed property values were the same from 2008-09 to 2009-10, then the tax rate would be the same from year to year. If the total assessed property values increased, then the tax rate for 2009-10 would be less than the previous year.

However, for the first time in memory, the total assessed value of properties within the Warwick Valley Central School District has decreased. The town assessor recently informed the school district that he estimates a 1.5 percent decrease in total assessed value of properties within the district. This decrease is not distributed equally throughout the town. Many have had their assessed property values reduced through the appeal process to the New York Supreme Court. In addition, the town assessor’s office has reassessed approximately 900 parcels whose collective value was reduced by approximately $5 million.

As a result of this reassessment, those properties whose assessed values have decreased will pay a smaller portion of the tax levy, and will see a reduction in their school tax bill. Those properties that did not have their assessed values reduced will now pay a larger portion of the tax levy (to make up the difference of those who will now be paying a smaller portion) and will see an increase in their school tax bill.

To further complicate the process of setting a tax rate, the school district must wait for the state Office of Real Property Tax Service to establish what is known as equalization rates. Equalization rates are made known to the school district in late July or August. The significance of equalization rates is that they can shift some of the tax burden from one town to another within a school district. Residents of the town of Warwick pay the majority of the school tax levy, while those in Chester who live in the Warwick school district also pay a portion. Any small change in the equalization rates changes the amount of tax that is distributed between the two towns. Sometimes these shifts are minor, but they can have a major impact on the residents of Chester.

Another factor in determining the amount of your school tax bill is the STAR exemption – property tax relief provided by the state. The amount of the STAR exemption can be reduced by the state, as it was last year. Any reduction in the STAR exemption results in an increase of taxes to the local property taxpayer. The school district will not know about changes in STAR exemptions until August.

As you can see, many factors in determining the tax rate for a school year are not controlled by the school district – yet they greatly impact the amount an individual property owner will pay in school tax.

So how much more will I have to pay in school tax?

Even with a zero percent change in the school budget, the Board of Education has to levy a tax that is 1.8 percent more than last year due to factors including the overall state aid picture and other issues. Please note that the property tax rate is affected by the above mentioned variables and the information that is needed to determine the property tax rate will not be known until late July and August. The assumptions made at this time estimate the property tax rate will increase between 1.8 percent to approximately 3.2 percent, if factors not under the control of the school district do not change.

If the total assessed values of the district did not change, the school tax on a home assessed at $40,000 (our historic standard of comparison) would pay about $90 more than they paid last year in school taxes. The approximate $5 million reduction in assessed value of Warwick properties, however, causes an increase in the tax rate. Due to this increased rate, a home with an assessed value of $40,000 may pay as much as $160 more than last year.

How can I figure out what my OWN INDIVIDUAL school tax will be next year?

The estimated range of the 2009 tax rate is shown in the table below. Warwick residents can use this to estimate their individual school tax increase.

Didn’t the Federal stimulus bill provide more money for schools?
Is Warwick receiving some of that money?

Yes, Warwick will be receiving some Federal stimulus money, in lieu of a portion of
state aid for 2009-10.

In February, Governor Paterson decided to use Federal stimulus funds to cancel his planned reduction of state education aid (which would have meant a reduction of
$1.8 million in state aid for the Warwick Valley Central School District).

Meanwhile, initial budget requests throughout the district for 2009-10 were $2.1 million more than the 2008-09 budget. By cutting back in areas where it was possible to do so, and by reducing staff (four elementary teaching positions this year, and at least five more for 2009-10) due to declining enrollment, the district was able to eliminate the $2.1 million initial increase and achieve a zero percent increase in the spending plan. A summary of the budgets adopted by the Board of Education is presented below:

If the Federal stimulus funds were not available, the Board of Education would have had to make a very difficult decision, i.e., to make further reductions to the budget or to drastically increase the tax levy. Due to factors beyond school control, all of Warwick’s revenues (state aid, fund balance and general revenues) diminished. The Board decided against making additional reductions and adopted a modest increase in the tax levy of 1.8 percent.

A comparison of revenue budgets is presented below:

The use of Federal funds to offset large reductions in State Aid
is helping New York schools, right?

Actually, New York State school business officials are quite concerned about the Governor’s use of Federal stimulus funds to cancel his reductions in State Aid.

The Governor’s decision to use the Federal Stimulus funds in this way will result in two-year’s worth of increases in education costs (salaries, benefits, transportation, energy, supplies and other needed services) that will be offset in part, or entirely, by the Federal Stimulus funds. After two years, in 2011-12, those Federal Stimulus funds will expire. The Governor has shown that he has no provisions or plans for replacement of the Federal stimulus funds. The huge reduction in federal revenue that schools will experience in the 2011-12 school year, coupled with two-year’s worth of increases in operating costs, will produce the greatest challenge to public education in defining education program, delivery of service and the financing of those services that we have seen in the history of this state.

According to an analysis of this problem by the New York State School Board Association (NYSSBA), “…in two years federal funds will expire, local taxes will have significantly increased and no additional state operating assistance will have been provided. Were it not for this ultimate “one shot” (of federal aid), our schools would be facing wholesale cuts in programs, services and staffing.”

For this school district, it means that while the influx of federal funds has perhaps helped Warwick avoid serious cuts to its education program and keep tax rate increases fairly modest for the time being, there appears to be no good answer as to what will happen when those federal funds expire in two years. This is why school business officials across the state are so concerned for the future of public education funding in New York. They are worried this temporary fix will eventually lead to huge property tax increases for residents and damaging program cuts for students – a real problem that state legislators and New York’s Senators and congressional leaders have yet to address.

why is there a proposition for the Purchase of 'no less than five school buses'?

The Warwick Valley Central School District utilizes a bus replacement schedule to maintain a cost-effective bus fleet. The operating cost of older and higher mileage buses is not as cost-efficient as newer and lower mileage buses. To maintain a cost-efficient structure of the district's bus fleet, about 10 percent of the fleet needs to be replaced each year. This year the district is asking voter approval to replace not less than five school buses.

The estimated trade-in value of the buses being replaced is about $57,000. The remaining cost of $515,000 is split approximately 50/50 - with the State providing dollars in the form of transportation aid - and the remaining $257,000 coming from the local school tax.

What is the authorization to borrow $7 million for
phase II of the capital projects plan?
I thought that was being postponed.   

Due to the extreme uncertainty of state education aid this past fall, with the Governor even warning of mid-year cuts in aid to schools, the vote on Phase II of the Capital Projects Plan (which was to take place in December of 2008) was postponed by the Superintendent and the Board of Education. As it became more clear that this building aid would not be affected by the Governor's proposed cuts, the Board of Education has decided to move forward with the Capital Projects Plan. The vote on Phase II will take place as a proposition during the budget vote on
May 19.

The Capital Projects spending plan presented to the voters outlined the needs for capital spending to improve or replace worn out structures like roofs, boilers, windows, and masonry work. The first phase (Phase I) of the plan utilized the voter-approved Capital Reserve of $3.75 Million plus the States EXCEL Aid of $1.4 Million to fund a total of $5.15 Million in voter-approved projects. The Phase I projects have no additional cost to taxpayers; and when the projects are completed, the District will receive approximately 60 percent of the $5.15 Million as building aid from
the State.

If voters approve the $7 Million bond for Phase II projects, then the building aid from the $5.15 Million plus the building aid from the $7 Million spending (a total spending of $12.15 Million) will pay for the debt service on the $7 Million bond. Therefore, there will be no increase to the local property tax to make the “mortgage” payments on the $7 Million bond for Phase II.

Explain why the district needs to Establish a Capital Reserve fund
of $5.2 Million for Phase III Capital Projects.   

This fund would be like a “savings account” that accumulates money through annual contribution over a five-year period for use on future capital projects, as was done to help facilitate the Phase I and proposed Phase II projects.

If the voters approve the creation of this reserve, the source of funds for the reserve will come from money that may be available from additional revenue or unspent funds from the prior year.

Once the reserve is funded, the District cannot spend the money until the voters approve the requested expenditure.

has the board of education done enough to lessen the burden on Warwick taxpayers?

Members of the Board of Education, as elected officials of the school district, are entrusted by the residents to act in the best interests of the education of all students and the community. Their mission is to “encourage programs and activities that will foster excellence and raise expectations of students, staff and community.”

The Board of Education believes this proposed budget provides the necessary resources for all students to meet or exceed academic standards and graduation requirements. They believe that this budget supports the preservation of the educational quality in the schools at the lowest cost possible to taxpayers.

what will happen if the budget is defeated?

Under New York State law, if the school budget is defeated, the Board of Education can either put the budget up for another vote or move directly to a contingency budget.

The Warwick Valley Central School District Board of Education
has stated once again that it will not put the budget up
for a second Board-initiated vote.
The Board will adopt a contingency budget
if the proposed budget is rejected by Warwick taxpayers.

what is a contingency budget? how would it affect my taxes? what would be cut?

State law mandates that, with a contingency budget, a school district may not increase spending by more than 120 percent of the Consumer Price Index or 3.8 percent, whichever is less. Some items, such as debt service and costs associated with enrollment growth, are exempt from this cap.

If the proposed budget is defeated, the district must delete $181,037 in needed equipment and the appropriation for public use of district facilities. This means that a contingency budget for next year would be .23 percent lower than a passed budget would be.

If required to adopt a contingency budget for 2009-10, the district would have to charge the public for use of school facilities - something that would put further drain on groups working to offer programs/activities for the children of the community as well as organizations that use the school facilities for the benefit of the Warwick community.

In addition, each year on a contingency budget impacts on future budgets to a greater level than a non-contingent budget.

For more information on these and other important issues facing the school district
and Warwick residents, please come to the Budget Hearing on May 11 at 7 p.m.
in the Dorothy C. Wilson Education Center at the Middle School.