Usually, at the August Board of Education Tax Levy meeting, the percentage of increase in the school budget to homeowners that was approved by the voters in the May budget vote remains fairly close to the figure initially estimated during the preparation of the budget. This year, however, because of the failure of the county attorney and assessor's office to notify local school districts of a decision to appeal the previous equalization rate, which compelled school districts to shift some of the school tax burden from business, condo and apartment owners to owners of traditional one, two and three family homes, school districts inaccurately estimated what residents would pay in school taxes for the coming school year. For Port homeowners (Class One residential taxpayer), the new tax equalization rate set by the county would translate into a 7.58 percent increase for the '98 school year rather than a 4.6 percent one, as approved last May. However, by voting to appropriate $700,000 from the unappropriated $1 million fund balance from '98, the school board, at its Aug. 11 meeting, managed to reduce the increase to 6.32 percent. Dollarwise, for the average home in Port Washington with an assessed valuation of $10,000, this means an additional $79 annual increase over the amount of increase approved in May, which was $220, bringing the total increase to $299 for 1998.
Initially, school board members asked if it was possible to go back and reduce the '98 budget. Assistant Superintendent for Business Larry Blake advised the board that this was not possible because the voters had already approved the budget for the '98 school year. He suggested that the best approach would be to spread the 3 percent increase out over the next two years.
One suggestion mentioned by Mr. Blake was a possible reduction in capital spending, which is a discretionary budget item, in next year's budget. (This item has been at $1.5 to $l.7 million for the past few years.) If this and other discretionary items could be decreased, less monies would have to be raised through taxes.
Also mentioned as a way of adjusting to the increase was prudent spending of the already budgeted monies for this year, which could result in a larger unencumbered fund balance at the end of the '98 year. This could then be appropriated to further reduce the revenues needed from the homeowner tax base for the '99 budget.
Superintendent of Schools Dr. Al Inserra commented, "This sets us up for a difficult budget cycle next year. But it's the best course of action we can take with the bad choices we have." He added, "The step taken by the board of education was dramatic in that it almost ensures a reduction in spending in the '98-'99 year."
County Legislator Barbara Johnson (D-Port Washington) is outraged that the taxpayers "have to bear the brunt of this...especially since they already approved school budgets that had indicated school taxes far lower than what they'll ultimately be paying. The school district and, in the end, the taxpayers are the losers in this fiasco," says the legislator. Ultimately, Legislator Johnson voted against approving the new tax equalization rate.
Explaining the genesis of this, in her words, "avoidable fiasco," Legislator Johnson notes, "The problem began in December, when the County Assessor's Office, without the Legislature's knowledge, decided to appeal the tax equalization rates it received from the state, which determines the apportionment of total taxes to be paid by different classes of property. (Johnson further explains, however, that the actual amount of taxes that needs to be raised is determined by local taxing authorities...such as villages, towns, school districts and the county.)
Continuing, she says, "Because of what the Assessor's Office called a computer error, the equalization rates it received from the state for Class Two properties (apartments and condos) and Class Four properties (offices, factories and stores) in Nassau were proportionally too high. Appealing the equalization rates, the Assessor's Office said, would avoid costly challenges from condo owners and business, potentially saving the county millions of dollars in legal fees.
She further notes that the Legislature only learned of the appeal, and that schools would need to adjust tax rates, when the County Attorney's Office sought approval for paying the private law firm that handled the appeal. "This was additionally problematic since the approval of a legislative committee should be sought prior to any personal-service contract with the county for more than $25,000, a regulation that has been flouted by some county governmental departments, much to the chagrin of county legislators---Democrats and Republicans alike," adds Legislator Johnson.
Further commenting, she says, "Regardless of how noble their intentions in filing the appeal, the County Assessor's and County Attorney's offices hoarded information that was vital to the schools and taxpayers of this county, a move that will ultimately cost citizens additional taxes. Having an open government requires disseminating information to interested parties and seeking the legally required approvals."
She has since co-sponsored legislation requiring that schools be notified about tax appeals.