2020-21 Budget FAQs

Here are the answers to some frequently asked questions about he 2019-2020 school budget:

What is the difference between the tax levy and tax rate?

The tax levy is the total amount of money a school district raises in taxes each year from all property owners in the district.

Tax rates are calculated by dividing the total amount of the levy by the total taxable assessed value in a community. Tax rates are affected by changes in both municipal assessments and state equalization rates, which are determined in the summer. The tax rate is used to calculate each individual property tax bill.

What is an equalization rate?

Equalization rates are intended to spread the tax burden across all municipalities (cities, towns and villages) within the school district as fairly as possible. In New York, each municipality determines its own level of assessment. The rates are intended to balance these differences within the same school district. For example, one municipality’s assessments may be more recently updated than others, and property values don’t change equally in all municipalities within the school district.

A municipality’s equalization rate is set by the state to reflect a municipality’s level of assessment. It is calculated by dividing total assessed value by total market value.

  • An equalization rate of 100 means that the municipality is assessing property at 100 percent of market value.
  • An equalization rate of less than 100 means that the municipality’s total market value is greater than its assessed value.
  • An equalization rate of greater than 100 means that the municipality’s total market value is less than its assessed value.

What is the tax levy limit, or tax cap?

The tax levy limit is the highest allowable tax levy (before exemptions) that a school district can propose as part of its annual budget. When staying at or below the tax levy limit, budget proposals can be approved by a simple majority of voters (50 percent + 1). Any proposed tax levy amount above this limit would require budget approval by a super majority (60 percent or more) of voters.

Is the proposed tax levy within the cap?

Yes. The proposed tax levy increase of 0 percent is within the tax levy limit that is calculated for 2020-21 through a prescribed state formula. As a result, the budget requires the support of a simple majority of voters to be approved.

Residents’ tax bills are determined by several factors that are out of the district’s control, including assessment levels and equalization rates, which are set by the New York State Office of Real Property Services.

While final tax rates for 2020-21 cannot be determined until the summer when final assessments and equalization rates become available, we estimate that there will be no tax increase or decrease for district taxpayers. Here are the anticipated tax rates (per $1,000 of assessed value) for the towns within the district:

  • Bethel
    Estimated tax rate, 2020-21: $44.02
    Tax rate, 2019-20: $44.02
    Increase: O percent
  • Fallsburg
    Estimated tax rate, 2020-21: $45.52
    Tax rate, 2019-20: $45.52
    Increase: O percent
  • Liberty
    Estimated tax rate, 2020-21: $34.73
    Tax rate, 2019-20: $34.73
    Increase: O percent
  • Neversink
    Estimated tax rate, 2020-21: $735.80
    Tax rate, 2019-20: $735.80
    Increase: O percent
  • Rockland
    Estimated tax rate, 2020-21: $39.18
    Tax rate, 2019-20: $39.18
    Increase: O percent
  • Thompson
    Estimated tax rate, 2020-21: $33.32
    Tax rate, 2019-20: $33.32
    Increase: O percent

How does a fund balance help offset my taxes?

A fund balance is created when a district receives more revenue than expected or spends less than the amount budgeted. As part of the 2020-21 budget, the Liberty Central School District allocated $750,000 from its fund balance to reduce the tax impact on district residents in the coming year.

Did the Property Tax Relief Credit expire?

Yes. Through the Property Tax Relief Credit, property owners in districts that complied with the property tax cap received a check each year. The credit expired this year and was not renewed in the recently adopted state budget.

What is a capital reserve fund?

A capital reserve fund allows the district to set aside money for future construction projects and major purchases, much like a savings account. The fund cannot be established without voter approval, and reserve funds cannot be spent without voter approval. Because capital assets have a predetermined useful life expectancy, a reserve fund reduces the need to borrow money, but still maximizes state aid, to replace those assets in the future.

What are BOCES services and aid?

Boards of Cooperative Educational Services, or BOCES, provide shared services to school districts as a way to pool resources and share costs. Sharing allows districts to provide programs and services that they might not be able to afford otherwise. A district using BOCES services for the current school year is reimbursed a portion of that cost in the following school year by New York state. The amount returned to each district varies and is based on a formula that takes into account the district’s financial resources. The Liberty Central School District receives about 60 percent reimbursement on aidable BOCES services.

What is the Pandemic Adjustment?

In an effort to deal with the financial challenges brought on by COVID-19, this year’s state budget includes a state aid reduction for all public schools, the “Pandemic Adjustment,” that totals $1.1 billion statewide. This is entirely backfilled for each district by federal stimulus funds for 2020-21. While the federal stimulus offers relief this year, it remains to be seen if and how this will be applied to state funding in future years.

What are the “look back periods” in the Enacted Budget and how might they affect schools?

The Enacted Budget authorizes the state to review its revenue and expenses on an ongoing basis so it can determine its financial state. The year will be divided into three measurement periods: April 1 – April 30; May 1 – June 30, and July 1 – Dec. 31. If the state’s revenues within these “look back periods” is less than 99 percent of the projected revenue, or its expenditures are more than 101 percent of projections, the state Division of Budget can reduce aid for schools and local governments. According to language in the budget, school districts that have their aid reduced may be repaid at a later date.

What happens if the budget is defeated?

Under New York state law, if the school budget is defeated, the board of education has two options: put the same or a modified budget up for another vote, or immediately adopt a contingent budget. If residents defeat the proposed budget during a second vote, the board must adopt a contingent budget.

What is a contingent budget?

State law mandates that under a contingent budget, a school district must adopt a budget with no tax levy increase and eliminate all non-contingent expenses, such as certain student supplies, certain equipment purchases and the free community use of school facilities (the district must charge a fee). The administrative budget would also be subject to certain restrictions.