Keene Central School District’s proposed 2022-2023 budget would increase spending and raise school taxes, largely because of debt payments for the district’s capital project.

The district is proposing a $7,680,182 budget for the 2022-2023 school year, a 13.2% increase from $6,785,500 last year. The proposed budget would levy, or collect, $6,151,543 in school taxes — an increase from $5,695,040 last year — to pay for the majority of the district’s expenses.

Keene Central School District Superintendent Daniel Mayberry estimated that district taxpayers would have a tax rate of $11.26 per $1,000 in assessed value with the proposed budget. These rates could change after Essex County releases updated tax rolls later this year.

Last year the tax rate was $10.41 for school district taxpayers in Keene and $9.25 for district taxpayers in Jay, according to Mayberry. He said the tax rate has been similar in both towns for the last few years, but the tax rate in Jay dropped last year to make up for a miscalculation in equalization rates for the towns.

Each town assesses its properties differently, and the state has something called an equalization rate to ensure that each town’s taxpayers pay their fair share in school taxes. The equalization rate brings each towns’ assessments to full market value to make up for any differences in how properties are assessed. Jay’s equalization rate is 100% and Keene’s rate is 91.7%, according to Mayberry. Those rates were both calculated at 100% prior to the 2021-2022 budget, so last year the district had to lower its tax rate for Jay and raise its rate for Keene to make up for the $1,322 in taxes district voters in Jay payed in 2019-2020, which should have been paid by Keene taxpayers.

The district’s tax cap set by the state — which limits how much a school district can increase its tax levy — is set at 8.02% for 2022-2023. That’s higher than in most other local districts, which usually have tax caps around 2%. Mayberry said the district’s tax cap is higher than average in part because of increased payments on the districts capital project, which accounts for $610,000 of the proposed budget. He said that capital expenses aren’t included in the state comptroller’s tax cap calculation for school districts.

“When all was said and done, we were allowed (a) 1.43% levy increase for general expenses and (a) 6.59% excludable capital expense levy increase, which combined to 8.02%,” Mayberry wrote in an email Thursday.

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Capital project

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District voters approved the Keene Central School’s capital project in 2019, and the district started making payments on the project in the 2021-2022 budget. This year, the district wants to increase its annual payments on the capital project — which Mayberry said is estimated to cost a total of $7.8 million — from $325,000 last year to $610,000 moving forward.

Mayberry said the district wanted to spread out the increase in capital payments over two budget years to lessen the financial blow to district taxpayers. If the 2022-2023 budget is approved, Mayberry said annual capital project payments wouldn’t increase in the following years. He added that people probably won’t see as big of a budget increase after this year since the district won’t have to increase its payments on the capital project again.

The capital project includes new classrooms for STEAM (science, technology, engineering, arts and math) courses and fitness, an addition to the main offices, plus infrastructure improvements, security upgrades and reconstruction of the athletic fields. Construction started in April last year, and the majority of the project is expected to be done by September.

The proposed budget also allocates $40,000 for a new minivan and $50,000 for a new buildings and grounds shed to store equipment acquired throughout the capital project, which are contributing to the budget increase this year. Mayberry said costs for special education programming and health insurance rose in this year’s proposed budget, too.

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Funding the budget

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In addition to taxes collected from people living in the district, the district would use its reserves to help pay for the more than $7 million budget. Mayberry said the district traditionally budgets $275,000 in revenue every year from its reserves, and that’s increasing by $300,000 this year to create a total of $575,000 in fund balance use for the district.

Mayberry said a “good chunk” of that increase is coming from money the district has saved during pandemic-related school closures and restrictions, so using that much from the fund balance wouldn’t be sustainable year after year. Mayberry said the district got a slight increase in state aid this year, which would also offset the district’s spending.

Mayberry estimated that the district would distribute a total of $84,000 in STAR exemption savings.

A public hearing on Keene Central School District’s proposed budget is slated for 6:30 p.m. on Monday, May 9 in the Keene Central School auditorium. People can also attend the hearing virtually at https://tinyurl.com/mpa7kyeu. Mayberry said he planned to record the budget presentation and post the recording on the school district’s website after the hearing.

The budget will go before district voters from noon to 8 p.m. on Tuesday, May 17 at Keene Central School’s main entrance.

Also on the district’s ballot are two seats for the Keene Central School District Board of Education. Incumbent board members Jen Kazmierczak and Molly Jacobson are both running for another three-year term.

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A challenging budget

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Mayberry said this year’s budget process was “extremely challenging” because of the cost increases for budget items, along with general inflation. The state allows levy increases equal to a school district’s Consumer Price Index or up to 2%, whichever is less, according to Mayberry, though a school district can override the state-issued tax cap if a 60% majority of district voters approves the school budget. Mayberry thinks most school districts want to be fiscally responsible to taxpayers and stay within the 2% cap, but he said he doesn’t think the cap would be sustainable without some “major funding changes” or without districts regularly going over their state-issued tax caps. Having to stay within the tax cap presents a dilemma for school districts already strapped for cash and resources, Mayberry added.

“There’s only so long you can go down that road before something needs to change, and you need to change the conversation in the development of the budget,” he said. “I think the longer the tax cap is in place, the closer we’re all going to get to the crossroads of having those conversations — where do you draw the line between cuts that you make and having to go over our tax cap?”

Mayberry said that dilemma is especially true for New York school districts that are seen as fully funded in the eyes of the state, like Keene Central School District. Mayberry said that Keene’s school district didn’t receive as much of an increase in state aid this year as other districts, and the district only received around $30,000 across a series of federal stimulus packages that were funneled to school districts during the coronavirus pandemic.

Many area school districts got a more significant boost from the federal aid — Tupper Lake Central School District received $2.4 million, and Saranac Lake Central School District got $5 million in total — and Mayberry said there’s a common misconception that Keene’s school district did, too. While that federal funding might have made budgeting easier this year for districts that got a lot of federal aid, Mayberry said those districts might run into problems like Keene after their federal aid runs out at the end of 2024.

“I think what you’re going to see moving forward in the next few years is a number of schools in the same boat that we’re in,” Mayberry said.

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CORRECTION: A previous version of this article omitted the first name of Superintendent Daniel Mayberry and incorrectly said the tax rate was $11.26 per $100,000 in assessed value; it’s $11.26 per $1,000 in assessed value. The Enterprise regrets the errors.