Niagara Gazette

Local News

March 7, 2013

Falls school officials look at tax hike

Niagara Gazette — Ready or not, a tax levy increase may be headed to the Niagara Falls School District.

A perfect storm of increasing costs and stagnant revenues has led district business officials to propose a jump in the levy for the first time in 20 years. It will be up to the nine-member school board to determine if it's going to become reality.

Administrator for School Business Services Timothy Hyland, previously critical of the board's 19 years of keeping the tax levy unchanged, said the district's finances make it imperative a small increase is included heading into 2013-14.

"Failure to increase the tax levy now could risk the long-term stability of the district's general operating funds required to continue paying for the needed level of services and programs currently provided by the district," he said. "Last year, we could have raised the levy 5.5 percent. We raised it zero."

District officials are proposing an increase of either 3 percent or 3.77 percent – the maximum the state's tax levy cap would permit – depending on whether some of the district's ongoing cost issues and revenue losses can be fixed. 

With a 3 percent increase, it would affect the average household valued at $55,200 by $30.91 additional next year. The worst case of 3.77 percent would cause the same property to pay an additional $38.64 next year.

Even with the increase, casino money – $750,000 annually, that’s not paid for two years – has disappeared and, if not resolved soon, could force the district to empty its $3.8 million savings account entirely. New York state and the Seneca Nation of Indians, in arbitration right now over exclusive gambling rights, would need to end a stalemate in order for the district to receive its money, which sits in an escrow account unable to aid the district.

There's also the issue of teacher retirement system payments, which could rise $2 million locally next year. Gov. Andrew Cuomo has presented a controversial solution in his executive budget to cap district contributions, effectively eliminating the increase. But opponents believe this reform defies the state's constitution, which requires the pension be fully funded every year.

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