Dear Editor,
Compliments to and appreciation for our OACSD Board of Education and Superintendent for managing 0% property tax increases for the past two years. Perhaps every other New York State school district increased property taxes despite floating in COVID stimulus money.
The herd mentality of filling the bucket did not prevail at OACSD; more cheers and accolades. Despite exercising stewardship and frugality, OACSD’s savings accounts remain flush. Relative to the past 13 years, the fiscal year 2023 budget grew more than any year in the past. The Draft Fiscal Year 2024 Budget proposal shall grow even more.
These are the largest increases ever. These increases are funded by Federal COVID / stimulus money redistributed as NYS school funding. NYS State Aid to schools increased 14% and 12% for FY 2023 and FY 2024, respectively. Even if discounted for inflation, these increases are far greater than any before.
With very rare exception, all annual budget proposals contain a “Budget Gap”. Expenditures will exceed Revenues, hence a deficit. This averages one half of 1% or rounding error.
This will present our BOE with the dire choices of denying our children resources, dipping into reserves, and/or raising taxes. With great gnashing of teeth and torment, the BOE will have to make hard choices.
However, there is magic in the numbers. A 1% increase in property taxes is $179,000. This year’s Budget Gap is $351,790; $351,790 / $179,000 = 1.96% increase in property taxes. Really? A 1.96% property tax increase, one, is politically acceptable due to the common person’s understanding of the so-called 2% property tax cap and, two, will ensure taxpayers do not become accustomed to 0% or low property tax increases, and, three, credits the BOE with solving self-created funding gaps.
In accordance with government accounting practices, the NYS 2% property tax cap is convoluted and so complicated that 99% of the public can’t understand it. Nor have time to ferret it out. With this creative accounting, our 2% cap permits an allowable property tax increase of 5.37% or $960,584. Fortunately, our BOE perceives that any increase greater than 2% is unpalatable. With emphasis, the 2% property tax cap formula is not a 2% limit, and is misleading.
Even though FY 2024 State Aid increased by $3,300,000, the BOE is proposing an addition of $351,790 (1.96% property tax increase) to fund new requirements. What requirements? Would taxpayers agree with this? Perhaps that should be disclosed when presenting the budget? Inflation is not germane.
Nearly 80% of OACSD expenditures are set by contractual rates of between 4% and 5%. Prior to creating the Draft Budget there were no identified requirements or needs for FY 2024. Only magic or a 1/3,300,000 possibility could account for existing requirements = increase in State Aid. It appears this year OACSD is conforming to the NYS public school paradigm of filling the bucket of available spending.
High praise, OACSD hasn’t been part of the herd for two years.
Examination of the Budget shows increases of operating costs (salaries, contractual expenses, materials) are huge. At first glance it appears the budget is increasing 6.7%. This really isn’t the case. When non-operating costs are properly accounted for, the FY 2024 budget is increasing 8.8% or 11% when debt service is accounted for.
These increases are unsustainable. When the Draft FY 2024 budget was presented, no BOE member asked any question whatsoever. For emphasis, no requirement or need for the increase was provided in the presentation and no BOE member asked why. The public was not permitted to ask questions or make comments on the presentation.
There is magic in the numbers; one, Total FY 2024 Budget increase = $3,538,029, two, Increase in State Aid = $3,263,893, and three, Budget Gap = $351,790. 4) Budget increase – Budget Gap = State Aid or $3,538,029 – $351,709 = $3,186,239. The difference between State Aid and Budget increase is 0.099%.
Too much magic? In some vernaculars this is known as filling the bucket or backing into your number.
Prediction – The BOE shall approve the 1.96% or 2% property tax increase. It is too dangerous to allow taxpayer expectations to solidify around 0% or very low property tax increases. Less than 2% is politically doable. This will happen even though no connection will be made between pre-existing or presently existing needs for which this funding is used.
Question – Is the increase required to fund the highest teacher salaries and benefits in the Southern Tier?
Opinion – Unless the case can be made for additional resources, there should be no property tax increase. Money not needed for new resources should go to reserves. Unnecessary increases in operating costs will forever remain a component of a bloated budget. Save the money for a rainy day. As illustrated by recent bank failures, we may be going into another 2008 recession.
Suggestions – One, respect taxpayers and articulate specifically what more money is for. That is the purpose of the Budget Newsletter. Taxpayers are smarter than they look. BOE members are elected to act with diligence on their behalf. A few questions would be appropriate! BOE membership is not an honorary position.
Two, per NYS law include the comparative academic performance assessment, State District goals of academic performance, and per NYS law, include salaries and benefits of $150,000-plus district employees.
The public needs to tender several candidates for the school year 2024.
Concerned,
Haig McNamee
Owego, N.Y.
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