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Frequently Asked Questions – Budget 2020-21

Filed in Archive, Budget News by on May 12, 2020

Q: What is the difference between the tax levy and tax rate and how do they impact my tax bill?

A: Your tax bill is determined by the tax rate. The tax rate is calculated each year based on a set of factors that include the tax levy, property values, and equalization rates.

The tax levy is the total amount of money a school district raises in taxes each year from all property owners in the district. In the proposed 2020-21 budget, the tax levy is $68,718,000. It is the only part of the tax rate calculation the school district controls.

Tax rates are calculated by dividing the total amount of the levy by the total taxable assessed property value in a community. The tax rate is used to calculate each individual property tax bill. Equalization rates that fluctuate from year to year in the town of Bethlehem and the town of New Scotland can impact the final tax rate in each community.

If the proposed 2020-21 budget is approved, the estimated tax rate increase for homeowners in the town of Bethlehem is 1.1%. The estimated tax rate increase for homeowners in the town of New Scotland is 2.2%. Final tax rates are set in August each year.

Q: Why is there a difference between the tax rate increases in Bethlehem and New Scotland this year?

A: Tax rate changes fluctuate from year to year. Some years they are higher in Bethlehem than in New Scotland, or vice versa. Occasionally, the tax rate changes are the same. The difference in the tax rates between the two towns is due to the total assessed value of property in each. When these assessed property values create an imbalance within a municipality like a school district, New York state applies an equalization rate for each community that impacts the resulting tax rates in each community. A visual representation of equalization rates and the impact on estimated 2020-21 tax rates can be found here.

Q: What is the tax levy limit, or tax cap?

A: For Bethlehem, in 2020-21, the tax levy limit is 2.34%. 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 (known as “the cap) would require budget approval by a supermajority (60 percent or more) of voters. The tax levy limit sets a threshold requiring districts to obtain a higher level of community support for a proposed tax levy above a certain amount.

Q:  What is a “fund balance” and how does it help Bethlehem balance its budget?

A: A fund balance is an accumulation of surpluses, created when a district receives more revenue than expected and/or spends less than the amount budgeted. These surpluses can be tapped as a source of funds in the development of a budget (called “appropriated fund balance”). The district is allocating $3 million in fund balance in the proposed 2020-21 district budget.

When the school buildings were closed due to COVID-19 and instruction moved online, unspent funds on things like electricity, fuel and the costs of hiring substitute teachers contributed to a higher than anticipated end-of-the-year fund balance. A portion of this fund balance in the proposed budget is being used to offset anticipated reductions in state aid to the district and to keep the property tax levy within the cap.

Q: What happens if the budget is defeated?

A: If the budget is defeated on June 9, the district would be required to adopt a contingency budget, where at least $1,573,000 in expenditures would be removed from the budget. This figure is the amount needed to keep the tax levy at the 2019-20 level. In addition to reductions in items deemed non-essential such as equipment, certain supplies and funding for enrichment activities, there would also be reductions in faculty. A Special Education teacher, EXCEL program staff, and 1-2 elementary teachers would be reduced. This will affect the extent of resources available to supplement instruction for students who are struggling academically and will result in some larger class sizes. Given that resources may also be affected by mid-year reductions in state aid, the final extent of program reductions could be even higher.

Q: How do I make sure I can vote?

A: By executive order of the governor, all school district voting this year will be by absentee ballot only. Due to the COVID-19 public health emergency, there will be no in-person voting. Qualified district voters (U.S. citizen, 18 or older, and a resident of the district for at least 30 days) should visit to ensure their name appears on the district poll list and to find out how to add or change their information if needed. All voters on this list will receive an absentee ballot by mail. A postcard with the voting information is also being mailed to all district residents. 

Please note that due to the condensed timeframe allowed by the executive order, it is important that voters return their mail-in ballot as soon as possible to meet the deadline for the return of the ballot: 5 p.m. on Tuesday, June 9. A secure, locked dropbox will also be available at the high school for residents to hand-deliver their ballots.