Fulton Schools Plan to Hold Tax Increase Below State Cap

Later this week, the Fulton City School District will tell the state that it plans to ask for an increase in the tax levy that will be at or below the state’s new property tax cap limit.

Tuesday night, the Board of Education signed off on Superintendent Bill Lynch’s recommendation that the district will commit now to a tax hike of no more than 3.06%.

That 3.06% is the limit for Fulton under the state’s so-called 2% property tax cap law.  That’s because the law excludes certain costs from the cap, such as the costs of construction projects, very large lawsuit settlements, large increases in pension costs, and new additions to the tax base.

Tax increases can be higher than the cap if the budget is approved by 60% of voters.

Each district’s actual tax cap number is likely to be different.

Lynch has said that because Governor Cuomo’s heavy promotion of the law has set up the expectation that the tax increase limit is 2%, he’s unlikely to recommend an increase higher than that.

But the new law requires districts to report this week whether they plan to exceed the cap or not — even though they won’t know how much state aid they will get for at least six more weeks and won’t approve a budget until after that.

Whatever the tax levy increase is, it won’t come close to covering the deficit in the budget for 2012-13.

A 2% increase in the levy will provide about $387,000 of a deficit estimated to be at least $2.8 million to keep all programs and services as they are this year.

The district has cut more than 50 positions in staff and administration in the last few years and has reduced spending by more than $5 million.

“We are struggling to keep ourselves whole,” Lynch said. “We have curtailed some supports we need for our students.”

Lynch said districts are pressing state lawmakers to release $250 million in aid that Governor Cuomo has withheld, intending to give it to districts that meet certain criteria.  Upstate schools have argued that the competition is unfair because wealthy downstate schools have not had to make cuts and can easily qualify for the aid, while upstate schools that have already made deep cuts will have a much harder time meeting Cuomo’s demands.

Fulton can also cover much of its gap this year by tapping reserve funds, but those reserves are running low and there’s no opportunity to refill them.

Work on next year’s budget will continue next Tuesday at 6:30 p.m. at the Education Center, during a workshop that is open to the public.