BOE Recap: District Faces Tough Budget Decisions with Tax Cap

Superintendent of Schools Dr. William Johnson made it clear at Tuesday's Board of Education meeting that the new two percent tax cap will have a substantial impact on the 2012-13 budget, which could result in the district cutting about 20 staff positions.

Robert Bartells, assistant superintendent of finance, explained that under the new tax cap guidelines, the district can only increase its 2012-13 budget by $1.7 million over the current one. The district, however, has $3.4 million in contractually obligated increases.

"We'll need to cut $1.7 million out of our ongoing expenses, which is a sizeable number," Bartells said. "We're not solving this by making small cuts to supplies and equipment."

Johnson said that the two percent tax cap is not in fact a cap. If the district were to stay within the two percent — or a $1.7 million increase over this year's budget — it would need 50 percent of voters to approve the budget. If the district doesn't receive the 50 percent, the budget goes to a zero percent increase.

"If 50 percent of voters decide to vote otherwise [against the budget], then the cap is zero," Johnson said.

If the district passes the 2012-13 budget within the parameters of the two percent cap, it could lose up to 20 staffing positions, Bartells said. If the budget  goes to a zero percent increase, it would have to make $3.4 million in cuts, which could result in the loss of 40 staffing positions.

Johnson added that if the district were to present a budget that has more than a two percent increase, the district would need 60 percent of voters to pass it. If it doesn't receive the 60 percent, the budget increase will again go to zero percent.

"The allowable expenses is two percent, but the cap is zero percent," he said.

Bartells added that the notion that homeowners' taxes would also be capped is a fallacy. It's the tax levy that is capped, he said, and there is no specific cap on how much homeowners' taxes will go up.

The board will begin constructing the 2012-13 budget in the end of January.