(March 5, 2012) Our District is dangerously close to a
financial precipice. Beginning next September, we may not be able to provide
the quality education we have provided in past years. We may only be able to
offer programs and services that are required by the state or federal
government. If our budget is voted down on May 15, 2012, we may even have a
difficult time meeting the mandates.
As a result of the new legislation limiting the tax levy, when a budget is voted down on the second try, we cannot raise taxes above the previous year’s levy. In other words, there must be a zero-percent tax levy increase. This would require cutting our budget by more than three million dollars. This would devastate RCS.
Why are we in this dire situation? Our revenues (money we take in from taxes and other non-tax sources such as state and federal aid, interest on investments etc.) have decreased from last year. Over the last two years we have benefited from the federal American Recovery and Reinvestment Act (ARRA) fund. Last year’s amount was $775,804. These funds, designed to save jobs, have reached their predetermined end. More significantly, we will lose approximately 1.2 million dollars ($1,290,000.) from the termination of a Payment in Lieu of Taxes (PILOT) agreement between COGEN and the Town of Bethlehem. Together these losses amount to over 2 million dollars ($2,065,804.).
Why are we losing tax revenue from COGEN? A municipality follows the calendar year and a school district begins a fiscal year on July 1st and ends June 30th of the next year. As a result, RCS will only receive half of the expected tax revenue. Let me explain.
A twenty year PILOT agreement between COGEN and the Town of Bethlehem ends December 2012.
COGEN makes a payment to the RCS School District twice during each year of the agreement.
In 2012 we receive one more payment in November 2012 and this will cover the first half of the 2012-13 school year.
For the last twenty years, COGEN made the 2nd payment in February for that same school year. However, in February, 2013, there will be no second payment because the PILOT will no longer be in effect.
In 2013 COGEN will be added to the Town of Bethlehem’s tax roll, but not until March 2013 and the first tax payment will not be paid until the fall of 2013, which is the 2013-14 school year. Therefore, RCS will not receive a second payment during the 2012-13 school year. We will only receive half of the expected tax revenue.
We are reviewing the contractual agreement between COGEN and the Town of Bethlehem and we have been in contact with the Bethlehem Town Supervisor and the tax assessor’s office in the Town of Bethlehem. However, it is doubtful that any changes will occur to offset this predicament.
Our Board of Education is forced to make difficult decisions about educational programs and employee positions. You can help by talking to neighbors and friends about our financial crisis and encouraging them to vote for the budget, once it is adopted by the Board of Education. Remember, if the budget is voted down twice, we are required by law to adopt a zero-percent tax levy increase, forcing even more drastic reductions in staff.
Thank you for taking time to understand our financial situation. Our children deserve the best education we can offer.
Superintendent of Schools