Niagara Gazette

March 7, 2013

Falls school officials look at tax hike

by Timothy Chipp
Niagara Gazette

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.

Still, Superintendent Cynthia Bianco said indications she's been given show both appear likely in the near horizon, in time to prevent the district from making costly reductions from staff and programing.

"The governor and the legislators promised they'd have a budget done by March 28, which is ahead of the April 1 deadline," she said. "I think scenario A" — the best-case scenario — "is the most likely. There's been no indication anyone's going to buck what the governor proposed ... and we've heard there could be a resolution of the casino issue could be soon."

Even though there's a tax increase in the plans, there's a healthy dose of cuts in the district's best-case to accompany it. About $2 million would need to be eliminated from this year's spending, with more than $1 million coming from pulling Orleans-Niagara Board of Cooperative Educational Services programs back into the district's buildings.

Officials are also proposing cutting the equivalent of five full-time teachers — though none would actually lose a job, Bianco said — and one administrator, who is retiring.

But, assuming the worst case and none of the district's solutions are realized, the picture becomes a lot more bleak. Gone would be the district's funding of summer school, as would modified sports, as it tries to close a $5.5 million gap. The district would also cut 26.5 teacher positions – which would include layoffs – and 35.1 total people.

"We're not likely to do (the worst case)," Bianco said. "But we have them just in case. We do have a plan just in case."