Hampton Bays school budget includes 18.5 percent tax hike

HAMPTON BAYS­—School property taxes in Hampton Bays are expected to skyrocket 18.5 percent next year under the proposed $43.8 million budget unanimously adopted by School Board members Tuesday night, even though overall spending will only increase about 2.8 percent.

At the meeting, Business Administrator Larry Luce explained that the sharp increase in the projected tax rate—which is expected to jump from $9.21 to $10.91 per $1,000 of assessed value—is due to a number of outside factors, including a drop in state aid and other revenues, and the recent reassessment of properties in the district by Southampton Town. The town said that properties in the district will be worth about 10 percent less next year, meaning that district taxpayers’ assessments are expected to go down, according to Mr. Luce.

Mr. Luce also stressed the distinction between the tax rate and the actual tax dollars that residents will pay. Because properties in Hampton Bays will be worth less, the actual amount of taxes that residents are expected to pay will probably not increase by 18.5 percent, Mr. Luce said.

This year, a taxpayer whose home is worth $500,000, the district average, is paying around $4,605 in school property taxes. A taxpayer whose home is still assessed at that level can expect the taxes to increase by $850, to $5,455, next year.

But Mr. Luce emphasized that the assessed value of an average home in Hampton Bays will drop from $500,000 to $450,000 next year. In that scenario, a taxpayer would see the school property tax increase by about $304 next year, or 6.7 percent over the current year.

The adopted spending plan, which must still be approved by district taxpayers on Tuesday, May 18, does not call for any layoffs and will not cut any programming, according to school officials. In fact, the spending plan includes funding for a total of five new sports teams at the middle and high schools due to growing student demand.

On Wednesday morning, School Board President Doug Oakland, who is running for reelection next month, said the board made a point not to cut programs at the district’s three schools. “That’s my emphasis—keeping the programs running that we have in place, with no layoffs, and minimal budget increases from budget to budget,” Mr. Oakland said.

“That was one of the goals, actually, when we started the budget development,” Mr. Luce added in a separate interview Wednesday morning. “We didn’t want to cut programs and we didn’t want to have layoffs.”

Mr. Luce said the School Board does not yet have a backup plan if voters reject the proposed budget next month. If that happens, the district can choose to either make changes to its budget proposal and put it up for a second vote, or adopt a contingency budget. A district must automatically adopt a contingency budget the second time a spending plan is rejected.

The allowed spending increase of a contingency budget is mandated each year by the consumer price index. This year, a contingency budget would probably mean a spending increase of zero percent, Mr. Luce said. He described that option as “devastating” and said that it would probably mean layoffs and program cuts.

And factoring in the town reassessment and loss of revenue, Hampton Bays homeowners can still expect to see a 14.8-percent hike in the school property taxes next year, according to Mr. Luce.

As a result of the reassessment, the district is anticipating a 10-percent drop in payments in lieu of taxes, or PILOTs, from Southampton Town. The figure is expected to decline from $642,237 this year to $578,013 next year. State aid is also expected to fall by 11 percent, from about $5 million this year to about $4.5 million this year.

The district will also lose out on interest revenue. Last year, the district earned $632,937 in interest on capital funds for the new middle school, which opened two years ago. The last of those capital funds were spent this year, so that revenue stream has completely dried up, Mr. Luce said.

All of these developments will shift the burden further onto the taxpayers, Mr. Luce said.

“We can’t control the state cuts, we don’t control the PILOTs, we’re not the tax assessor,” Mr. Luce said. “And a lot of these things are outside our control.”

On Wednesday morning, Eve Houlihan, a Hampton Bays resident who is a member of the Hampton Bays Civic Association, sounded shocked when she learned about the steep tax rate increase.

“Unfortunately, there appears to be a growing inverse relationship between the school tax burdens, which are obviously increasing, and what appears to be an alarming downward trend in performance,” Ms. Houlihan said. She said that she was referring to statistics that show that the percentage of Hampton Bays students receiving Regents diplomas had dropped since 2007.

On Tuesday night, Mr. Luce said that while the percentage of students receiving Regents diplomas had dropped, the total number of graduates had increased dramatically since 2007, and students had been scoring higher on Advanced Placement tests.

The proposed 2010-11 budget projects a 13.8-percent increase in employee benefits spending, 
from $6.8 million this year to 
$7.7 million next year. Mr. Luce credited that spike largely to uncontrollable increases in state pension costs and health insurance premiums.

General support services, which include administrative costs, school security costs, office personnel salaries, the new Metropolitan Transportation Authority payroll tax and other fees, will increase by 4.4 percent next year, from $4.4 million to $4.6 million. Instruction costs, which include teacher salaries, academic programs and other services for students, will increase by 1.3 percent, from $23.9 million to $24.2 million.

Part of the increase in instructional costs was due to a 12.3-percent increase in athletics spending, from $589,518 this year to $661,841 next year. Mr. Luce said the district will be adding a total of five new sports teams at the high and middle schools next year.

Almost all members of the public left the School Board meeting before Mr. Luce gave a detailed presentation of the budget proposal late Tuesday night, and the one man who stayed behind did not ask a question about the proposal. District administrators and School Board members will be giving a number of budget presentations to community groups in the coming weeks, Mr. Luce said.

During the meeting, the School Board also appointed Dennis Shug to take over as the new principal of Hampton Bays Middle School on July 1, when the current principal, Lars Clemensen, is set to take over as superintendent. Mr. Shug, 35, has served as an assistant principal at Hampton Bays Elementary School for the past three years.