Because of a $1 million agreement with the Target distribution center in the town of Florida, and the governor's tax cap, the Greater Amsterdam School District is proposing to decrease tax collections by $800,000.
Business manager Kim Brumley presented the school board with a second draft of the $62 million, 2014-15 budget at a board meeting Wednesday night.
They are not looking at any staff or programming reductions in the district this year.
State aid is expected to increase by 1.4 percent, but because the legislature hasn't finalized its budget, that number could change.
The Payment In Lieu of Taxes contract requires Target to make annual payments equivalent to 100 percent of the assessed value of the improvement. That payment pushes the district's budget over the state-determined $20 million tax levy limit.
To offset that, they must lower taxes by $800,000.
"Local government doesn't get to decide where that extra revenue goes," Brumley said. "You have to apply the rest of that to reduce taxes for as long as the PILOT is around."
That's a nearly 4 percent decrease in true value rates for the city of Amsterdam.
Brumley said though that may sound good to everyone, that really means the district can only collect $320,000 in revenue from the PILOT program.
"The tax levy is in place," Superintendent Thomas Perillo said. "So, we have to abide by it."
Brumley said that's $800,000 the district will never get back.
She explained they have to follow an eight-step formula that determines the amount property taxes can increase or decrease. If the levy is above the district's tax cap, the budget must be passed with a super-majority. If it's under the tax cap, it can be passed by a regular majority.
There has been one super-majority budget approval in the past five fiscal years, so Perillo said their track record isn't good.
The budget also proposes a decrease in revenue of 1 percent, but Brumley said that's because the district's interfund transfers declined significantly after they paid of a debt last year. The district expects to collect $62,290,00 million during the 2014-15 season and spend $62,880,000.
That's a gap of about $770,000.
That's not one of Brumley's concerns though. She said she is worried about getting payment from the PILOT program.
"One of the concerns when I talked to the auditors and the office of the state comptroller is that when we levy our taxes, we're guaranteed them," Brumley said. "Over the years, we always get our taxes back. If Target doesn't pay that $1 million, I have nobody to go get it from. That would not be a good thing."
The board will receive a copy of all budget documents at the next meeting. The budget presentation will be available at gasd.org.
Perillo said he is hoping the board will adopt the proposed budget at the next meeting April 16.
Also on the ballot this year will be $5,000 proposition for a Fort Hunter Library. There are also three seats on the board of education open.
Petitions are available in the district office and 100 signatures are required to qualify for the ballot. They are due back in the district by 5 p.m. April 30.
The annual budget vote and board election will be May 20.