Pearl River Schools Project 2.15% Tax Levy Cap for 2012-13

School districts are dealing with the state's new 2% tax cap for the first time as they plan their 2012-13 budgets, but the actual levy increases will be above that number in most cases. 

The new law allows for exceptions, so most districts will be working with a cap above two percent. Districts can also override the cap with 60% approval from voters. 

"All the publicity and headlines were about the two percent tax levy cap," said Pearl River Director of Operations Quinton Van Wynen. "But they included certain exclusions. In order to know exactly where things were, they set March 1 as the date where school districts had to submit what their tax levy increase is going to be, including the exclusions."

Van Wynen reported to the state last week that Pearl River Schools will actually work with a 2.15% cap and will not be asking the voters to approve an override. He had initially projected a 2.51% cap at the last board of education meeting Feb. 22, but changes made in the interpretation of the cap since then lowered the number. 

The current projection will be part of a presentation regarding the 2012-13 budget during the board of education meeting 7:30 p.m. Tuesday at the district administration offices on Crooked Hill Road. The full agenda and supporting materials for Tuesday's meeting are attached to this report.  

The presentation will also focus on transportation and athletics. This is the third consecutive meeting that has included a presentation on the 2012-13 budget. Van Wynen said he hopes to wrap up this part of the process tonight.

Van Wynen said he found out late last week that districts will be able to continue to adjust the numbers they sent in to the state until April 21.

"Being the first year, nobody had really worked through the exclusions and how to calculate them, what numbers to use," Van Wynen said. "They are still arguing how to allocate certain capital numbers.

"If you are a small cap company that is trying to bring a product to market, maybe you operate like this. But when you are dealing with an entire state, it is impossible. It's like trying to turn a battleship around in a bath tub."

Van Wynen explained that the two percent cap is based on the CPI (Consumer Price Index). If it is above two percent, that is the starting point. If the CPI falls below two percent, the cap drops to the CPI.

One of the exclusions is local growth rate, a number the state calculates. Van Wynen said it is 0.0022 for Pearl River.

Another exclusion is the two retirement plans, the TRS (Teacher Retirement System) and ERS (Employee Retirement System). If either increases from one year to the next, districts can exclude the difference. Because the ERS is going up by 2.7 percent, that allows a 0.7% increase.

The allowable exclusions bring Pearl River's cap to 2.15%, but Van Wynen said many other districts will have a higher cap. He expects most districts to try to stay under the cap at least for the first year, but eventually many will have to ask voters to go over it.

"We will do that some day," Van Wynen said. "I'm not sure when that day will be. Many districts will be faced with it this year."

The tax levy is not the actual tax rate increase, which will be closer to three percent for Pearl River.

"Our taxpayers are smart enough to know that's the number that matters," Van Wynen said.

Among other items on Tuesday's agenda:

• Presentation "Changes in Matter" by sixth graders from Pearl River Middle School.
• Nomination of Robert Davis to Rockland BOCES Board. 
• Personnel items including the appointment of spring sports coaches.