Villages, schools face tighter caps

CHATHAM—It is budget time for the four villages and six school districts in the county. This year, the 2% tax levy cap the state imposes on municipalities and school districts means a less than 2% tax increase in most cases due to state calculations. In some districts, like Ichabod Crane, this cap means an increase of less than 1% and the budget under consideration would leave the district with a $500,000 gap in revenues.

Village budgets are approved by the village trustees and run from June through May, while school districts hold annual votes in May for district residents to approve their proposed budgets for the next school year, which starts in July.

Village boards can override the tax cap by passing a local law, but school districts cannot exceed the cap unless a budget receives the approval of a supermajority of voters, exceeding 60% of those who go to the polls. Because that’s a high hurdle, most districts must depend on the state for increases in school aid and the end of funds withheld by the state under what’s called the Gap Elimination Adjustment (GEA). The GEA is state aid for schools that was supposed to be withheld in 2008 to make up for a state budget gap created by the financial crisis. But the state has continued to hold back some promised funding every year since, although the amount withheld has diminished. School districts want it eliminated this year.

As for the villages, at a March 24 workshop meeting, Chatham Village Mayor Tom Curran presented the proposed 2016-17 budget to the Village Board with expenditures set at about $1.1 million.

He said that the due to the state tax cap, the village can only raise the tax levy by $968 this year. The mayor’s proposed budget is about $5,000 over that amount.

Although the state tax cap is frequently referred to as 2%, Village Clerk Barbara Henry said that state calculations cap the tax levy growth in the village at 1.0003%. The budget summary given out at the meeting says, “To remain within the tax cap, the tax levy should not exceed $639,141.00. The mayor’s tentative budget has a tax levy of $645,099.12. In order to not exceed the tax cap, expenses will need to be reduced or revenues will need to be increased by $5958.12.”

Ms. Henry pointed out the state calculation of the tax rate cap for villages is based on the previous year. And since the village has not increased taxes significantly in several budget cycles, and in some years the tax levy has been reduced, the tax levy used for the calculation has been low.

Mayor Curran pointed out that the tax cap could become an issue as expenses increase and the rate stays the same, but he said that this year the difference is not large enough to warrant overriding the tax cap.

“We’re not that far off, so we might as well do a little paring,” said Mayor Curran.

The state tax cap law says the cap will be set at 2% or the rate of inflation, whichever is lower. But the rate is recalculated annually based on other factors too, including previous tax levies and excluding certain expenses.

The board plans to hold budget workshops March 31, April 18 and April 25 at 6 p.m. They will hold the public hearing on the budget April 6 at 7 p.m. after the annual organizational meeting at 6 p.m. All meetings will be held at the Tracy Memorial Village Hall.

The Ichabod Crane School District will present the proposed budget at the Board of Education meeting on Tuesday, April 5 at 7 p.m. and will have a final budget presentation and board adoption of the budget on Tuesday, April 19 at 7 p.m. The annual school board vote is on May 17 from 8 a.m. to 9 p.m. in the High School Gym.

The Village of Kinderhook and Valatie have already met to review their mayors’ proposed budgets. The meeting dates are listed on their websites at and

The Chatham Central School District was recently criticized by the Office of the State Comptroller for holding too much money in reserve funds. But the district, which may only increase its tax levy by 0.89% this year, is planning to use its surplus funds to increase services and hire some additional staff this year without having to increase the levy.

To contact reporter Emilia Teasdale email


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