BOE Proposes 4.9 Percent Increase in Tax Levy

The Lacey Board of Education approved its 2013-14 preliminary school district budget, which includes a 4.9 percent increase in the local tax levy.

“As this budget is today, I’m not in support of it,” President Eric Schubiger said at Monday’s special meeting. “I know we have a lot of work to do and I know that we are all going to look at this closely in the next several weeks.”

The preliminary budget was approved by a vote of 5-2, with Schubiger and board member Frank Palino opposed. 

After boasting a zero percent tax increase for two straight years followed by a 1.7 percent increase in the levy in 2012, the board was unable to introduce its budget within the state-mandated 2 percent cap.

The proposed $65,378,595 spending plan calls for a $42,065,051 tax levy. Last year, the board adopted a $64,216,897 operating budget with a $40,090,630 tax levy.

Business Administrator James Savage could not yet say what the increase will cost the average homeowner, as the township is currently in the process of calculating Lacey’s assessment.

The district also still doesn’t know the impact of Hurricane Sandy on the town’s tax base. The board is in the process of meetihg with the township Committee to discuss the issue.

“One of the biggest reasons I voted no is because I know what our community has been through in the last year,” said Schubiger, who lives in an area of town that was decimated by the storm. “My heart’s definitely in a different place this year.”

Waivers Used to Exceed Cap

Although above the state cap, the district will not need a referendum to pass the budget since the state allows for 14 exceptions. The district will be granted two waivers — one for health benefits and the other for a banked cap.

The agenda for the special meeting included two resolutions, stating that in the proposed budget, is the increased cost of health benefits in the amount of $722,000, an increase of 13.3 percent.

Also included in the budget is an adjustment for banked cap in accordance with state statute. The second resolution states that the district has “fully exhausted” all eligible statutory spending authority and must increase the base budget by $450,608 due to the decrease of solar renewable energy credit revenue.

Savage credits the 4.9 percent tax levy increase primarily to the rise in cost of health benefits, a $500,000 increase in salaries and the decrease in SREC. With the increase in health benefits alone, the district could not stay within the cap, he said.

Over the last three years, the district has earned revenue in excess of $1 million each year. Due to the drop in SREC value, the district will earn approximately $200,000 in the upcoming year.

“I’m hearing they’ll go back up. They’ll never go back up to where they were,” Savage said. “We did not know it was going to drop that badly. But we’re still making money.”

Since the district earned more than expected the past three years, they actually are right where they should be, Schubiger said, adding that without the solar project, the district would be in a “worse financial situation.”

Monday’s agenda included a third resolution, acknowledging an allocation of $136,000 to travel and related expense reimbursements for all staff and board members. In 2012, the board approved $82,500 in travel expenses.

This expenditure includes traveling, training and professional development costs, Board Member Jack Martenak said.

The board’s Finance Committee just received state aid figures on Thursday, Martenak, said.  in state funding than they did in 2012-13. While Lacey received $20,972,424 in state aid in the 2012-13 year, the district will receive $21,059,702 in 2013-14. This is a 0.4 percent increase.

The school board didn’t receive budget figures until Friday, just three days before the special meeting.

“There are still a lot of questions that people will need answered and information they will want. But the state has got us on a tight schedule from when they give us the numbers and when we have to submit budget,” Martenak said.

‘Ongoing Process’

Schubiger commended those involved in preparing the budget for their hard work.

“It’s an ongoing process, year round that we look at and I know a lot of people put a lot of hard work into this and I thank everyone for that,” he said.

Board member Linda Downing, after voting “yes” for the budget, added, “knowing that we’re going to be tweaking some of the items.”

The preliminary budget will be sent to the County Superintendent of Schools by Thursday for approval. The budget will not be finalized until the end of the month at a public hearing.

“This budget could change by the time we get to the public hearing. The county office can change it and/or members of the board might change it,” Savage said. “I’m still working on it actually.”

Schubiger is hopeful the budget will be “more suitable” by the public hearing.

“I’m not comfortable supporting the budget as it stands at this moment,” he said. “I want the tax levy to be less. Our job is to make the tax levy less for the taxpayer.”

The preliminary budget, as is, does not include any cuts or layoffs. Although anticipated retirements should help in decreasing staff costs, Schubiger said.

“We’re not looking at cuts to areas,” he said. “But everything’s on the table at this point.”

Downing also said she is “uncomfortable” with the tax increase.

“We need to look at what’s in the budget closer,” she said, adding that some of the new initiatives included in the preliminary budget may have to wait.

There are many new initiatives that are contributing to the increase in the tax levy, including the full day kindergarten and the random drug testing programs and school security. Schubiger called the initiatives “good programs that the students deserve.”

Another new project is a student information package, an online portal in live time, Downing said.

But the board has to find a balance by offering students an opportunity to succeed while also keeping taxes down, Schubiger said.

While kindergarten and random drug testing will come at a cost, Schubiger hopes the district can partner with the police department to boost school security while taking advantage of grants, as was done with the badge system.

“Usually (the budget) is so down to the dime without cutting important programs,” Downing said. “We don’t want to do anything to hurt the kids. We don’t want to stop progress. It’s a balancing act. It’s a tough call.”

A presentation for the residents of Lacey will be done at the school board meeting at 7:30 p.m. Monday, March 18. A public hearing will be held at 6 p.m. Friday, March 22.

The proposed budget will be posted on Lacey Patch as a PDF document once available.

Below are the proposed figures for the preliminary budget:

Budget Category

2010-11

2011-12

2012-13

2013-14 (Proposed)

Local Tax Levy

38,379,406

39,413,121

40,090,630

42,065,051

Total Local Repayment of Debt

5,065,599

5,122,788

5,028,138

$4,414,550

Total Operating Budget

57,593,870

64,642,232

64,216,897

$65,378,595

Total Expenditures

65,641,245

71,095,320

70,599,335

$71,029,145