Q: Is the proposed budget within the tax levy cap?

A: Yes. The proposed budget would result in a tax levy increase of 2.25 percent, which is at Averill Park’s “tax levy limit” under the state’s tax cap law. When New York passed a property tax cap in 2011, elected officials touted the new state law as a “2% tax cap.” However, the law does not restrict any proposed tax levy increase to 2 percent—or any other amount.

Instead, the legislation requires each school district in the state to calculate its own tax levy limit using an eight-step formula to determine how much they can increase their tax levy by. As a result, most school districts can raise their tax levies by more than 2 percent and still be within the tax cap. Under the state’s calculation for 2015-16, AP has a tax levy limit of $28,712,910 or an increase of 2.25 percent. This is the District’s maximum allowable levy limit to pass the budget with a simple majority of voters (50 percent + 1). The tax levy proposed in the adopted budget is at this amount.

Q: What is the Gap Elimination Adjustment and how is it affecting Averill Park’s school budget?

A: What was intended to be a one-year cut to state aid to fill the state’s budget deficit, the Gap Elimination Adjustment, or GEA, is heading into its sixth straight year of state aid reductions for Averill Park, and school districts across the state. School districts have been calling upon state leaders to eliminate the GEA entirely. Under the final state budget, the District will receive a restoration of $1,362,155 in GEA funding. However, Averill Park still faces a GEA loss of $804,030 for 2015-16 and an overall loss of funding of $16.5 million since the GEA went into effect.

Q: What is a fund balance? How is it used?

A: A fund balance is a reserve much like a homeowner’s savings account. Just as homeowners are careful not to use up their savings accounts, school districts also must plan carefully how they use their fund balance to ensure it does not run out. When a district’s expenses are less than what was expected or revenues are higher than expected, the money is held in the fund balance.

The money can be used for unforeseen expenses throughout the school year. AP does not have a substantial fund balance to help compensate tax increases. Currently, the District expects to end the fiscal year with an unassigned fund balance of about $2.1 million, or 4.0 percent of the proposed budget, within the four (4) percent limit allowed by state law in unassigned fund balance.

Q: If the budget is defeated on May 19, what options does the Board of Education have?

A: If the proposed budget is defeated by voters on May 19, the Board of Education will have three options: present the same budget to voters a second time, present a revised budget to voters, or adopt a contingent budget. If the budget is defeated a second time, the board must adopt a contingent budget. In addition, with property tax levy limit or “cap” law in effect, under a contingent budget the district can levy a tax no greater than that of the prior year’s budget – essentially a zero percent tax levy increase. For Averill Park, a contingent budget would be $53,274,677, which would mean the district would have to cut $631,824 from the proposed budget.