School District Eyes Revenues, Reserves, Tax Cap Definition

An education funding formula released by the state shows the so-called "2 percent tax cap" is actually closer to a threshold of 3 percent for Three Village, due in large part to the reduction in state aid that could hit the district in Gov. Andrew Cuomo's proposed budget.

That's why it's not really a true cap, according to Jeff Carlson, Three Village's assistant superintendent for business services. In a presentation on Tuesday, Carlson said it is actually a threshold that determines the percentage of voter approval needed to pass a budget that includes a tax levy increase greater than the percentage dictated by the formula.

In Three Village's case, he said, only a simple majority is needed for a 2.97 percent tax levy increase – a number which he updated to 2.99 percent on Thursday following a meeting with the state comptroller's office – rather than the 60 percent voter approval that going above the "2 percent" commonly associated with the legislation would require.

That definition of the "tax cap" was part of a presentation Tuesday night in which Carlson focused on the district's revenue sources.

"There’s not a whole lot that can be done about revenues but it’s something that we need to talk about," he said.

In terms of revenue, the district could lose $853,000 in state aid in Gov. Andrew Cuomo's proposed 2013 budget, along with $1.2 million in federal jobs funding the district received this year that won't be renewed.

Besides state aid, Three Village's primary sources of revenue come from property taxes and the use of reserves, Carlson said.

Carlson said the school district is on track to have an operating surplus of about $2.5 million. That fund balance amounts to about 1.5 percent of the school's 2011-12 budget, which will leave the district with approximately $14.2 million in reserves and fund balance come June 30, 2012, down from $18 million in June of 2011.

But he said he recommends against relying on reserves to make up for lost revenue, saying the district would exhaust that resource within five years.

"Sometimes people see these numbers and say, 'Wow, we have so much, we should use more of it,'" Carlson said. "It’s not so much that we have a tremendous amount. In a district this size it’s not a whole lot to have for emergency use and for all the different reserves we do need to have."

The district is actively seeking other revenue sources, including finding a tenant for its Nicolls Road property and charging community groups fees to use school facilities, according to board president John Diviney.

"Due to the budget restraints, we do need to be as zealous as we can be in trying to increase revenue," Diviney said.