BOE Recap: Trustees Discuss Tax Cap and Impact on District

The passing of a 2 percent tax cap has changed what residents will vote on during the upcoming budget season, school officials said at Tuesday's board meeting, and the shift could adversely impact the future of the school district.

Superintendent of Schools Dr. William Johnson said residents will now vote on the district's proposed tax levy rather than its expenditure plan, which is what residents voted on in the past. Under the new law, the district's expenditures can only increase by two percent over the current budget, Johnson explained, or by the cost of living, whichever is less. The current cost of living is between 1.6 and 1.8 percent, Johnson said, but it has not been determined which number will be used in the formula.

"We don't have all the detailed information at our fingertips," he said.

The tax levy is the amount of money the district raises through school taxes for its expenditure plan. The current school year's tax levy was $83 million in a $95 million expenditure plan. That number ($83 million) would be multiplied by either two percent — or anywhere from 1.6-1.8 percent — and that figure would be the maximum dollar amount added to the district's expenditures for the 2012-13 budget. If the two percent number was used, Johnson said, the district could only add $1.6 million to next year's budget.

Johnson noted that if voters don't approve the two percent increase by 50 percent, the levy increase goes to zero percent. "It's not a two percent tax cap, it's a zero percent tax cap assuming voters don't pass it," he said.

The district is allowed to exceed the two percent cap, Johnson explained, if more than 60 percent of the voters approve the levy. He said the district will know by March 1 what number it will use to apply to its expenditure plan.