District Faces Potential $2.1M Budget Shortfall

Hauppauge school officials may have to make $2.1 million in cuts from next year's budget under the new tax cap, a concept that administrative officials attempted to explain to taxpayers on Tuesday.

"One of our biggest challenges this year will be to educate the public that a 2 percent tax cap on the levy doesn't mean it's necessarily going to be 2 percent," Superintendent Patricia Sullivan-Kriss said. "It will be a little higher due to variables."

School administrators held an information session on Gov. Andrew Cuomo's new 2 percent tax cap at the start of their Jan. 10 board meeting. Their hope, to explain how the tax cap functions to residents prior to releasing the preliminary 2012-2013 budget.

"The legislation changes the approval thresholds and has very little to do with 2 percent," James Stucchio, the assistant superintendent of business and operations said.

In prior years, schools needed to get a simple majority of taxpayers, or 50 percent of the votes, to approve the budget. Under the new property tax cap, school districts who propose a budget with more than a 2 percent tax levy need to get a supermajority, or 60 percent of votes, to be approved.

The supermajority could be difficult for Hauppauge Public Schools to achieve. Since 2009, have voted in favor of the budget, narrowly meeting the supermajority requirement.

Stucchio said the 2 percent cap is a limitation on the district's tax levy, the portion of the annual budget raised through property taxes. Hauppauge's 2011-2012 budget is $97.2 million, but only $74.5 million was raised through the tax levy.

The $74.5 million is used as a base number for calculating the 2 percent tax cap. The district is allowed to increase it for any tax base growth, such as new businesses or housing developments, Stucchio said. The new Motor Parkway Plaza in Hauppauge has allowed the district to increase that number slightly. However, property tax exemptions and payments in lieu of taxes decrease it, adjusting last year's tax levy to roughly $77 million.

The district estimates they could raise the 2012-2013 school budget by $1.98 million, or 2.65 percent, and remain under the tax cap. This is because funds needed to pay back theand part of the employee's retirement funds are exempt.

Unfortunately, the superintendent said the district must figure out how to pay for $4.1 million in increasing costs. The largest increases are $2.2 million in contractual salary increases for staff and $1.2 million in step increase for teachers. The district also expects to pay $206,000 more for utilities and transportation and $150,000 more to provide health care insurance.

This could leave Hauppauge Public Schools facing a potential $2,126,000 shortfall for the 2012-2013 school budget. However, Stucchio and the superintendent said these numbers are estimates, as the district's state aid has not been determined.

Sullivan-Kriss said she and other administrative officials plans to present their full recommendation for the 2012-2013 school budget to the Board of Education on Feb. 28.

Clarification: Patch first reported that the district's Teacher's Retirement Fund contributions are exempt from the 2 percent property tax cap. While it is true those contributions are exempt when exceeding a certain percentile increase, it did not rise enough to be exempt next year. The increase in the district's Employee's Retirement Fund contribution that is large enough be exempt under state law for the 2012-2013 school year.